Jugnoo starts cab-hailing biz as Ola, Uber drivers go on strike

SoCoMo Technologies Pvt. Ltd, which runs on-demand delivery services startup and auto rickshaw aggregator Jugnoo, has announced its entry into the taxi aggregation business at a time when key players in the segment are facing drivers’ ire over diminishing incentives and low earnings.

“We have come up with a strategy to provide taxi services at prices where drivers do not work at artificially lower rates than their costs. It’s a capitalist world where we have to manage expectations of both customers and drivers. The existing players have not been able to balance this,” Chinmay Agarwal, co-founder, Jugnoo, said in a press note.

The rates of the firm’s cab services are likely to be higher than those of current operators, the statement added.

Jugnoo will first start operations in Gurgaon and then expand to other cities.

Founded in 2014 by IIT-Delhi alumni Agarwal and Samar Singla, the Chandigarh-based company started as an auto rickshaw aggregator and later expanded into other hyperlocal segments like food and grocery delivery. It is currently rendering its services in 40 cities in the country and claims to clock 40,000 transactions on a daily basis. It currently has over 12,000 autos on board.

India’s cab-aggregation market is dominated by US-based Uber and home-grown Ola, and Jugnoo’s entry into the sector comes at a time when the drivers of the two leading companies have gone on strike in multiple metros. While drivers went on an indefinite strike in the national capital last week to protest the “unfriendly policies” of their employers, similar strikes were staged in Bangalore and Hyderabad. Drivers across regions echo the same demands–better incentives and more bookings.

In March 2016, Jugnoo had threatened to take legal action against Ola, accusing the firm of trying to hurt its business. Jugnoo had claimed that about 20,000 cancellations were made through 800 fake accounts used by Ola employees in 10 days. The accounts had been used to book a Jugnoo ride and then cancel it after some time, at times even switching off the phone later.

The firm had launched a ready-to-eat lunch delivery service ‘Meals’ in August last year, aimed at augmenting its recently launched hyperlocal grocery delivery service Fatafat.

In June 2016, it ventured into the B2B logistics services with Dodo Deliveries.

In April last year, the startup said it had raised an additional $10 million (Rs 66.5 crore) in an extended Series B round of investment. Much of the investment came from existing investors, led by One97 Communications Ltd.

The startup had raised $5 million in May 2015 in Series A funding from Snow Leopard Technology Ventures, Paytm and other investors. Before that, it raised $1 million from Rakesh Mathur, co-founder of Junglee (which was acquired and re-launched by Amazon), Vikas Taneja, partner and managing director of BCG Group, Kirloskar Brothers and others in a seed round in early 2015.

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