Will Meru strike back?

I recall it was 2006 when Meru Cabs rolled out their air-conditioned cab services in Mumbai, a city which had existed previously solely on the services of the rickety kaali-peelis. Meru was literally a fresh breath of air in a city which was trapped in the humdrum of its highly efficient but suffocating public transport system. With the arrival of Meru, one could now seek an air-conditioned ride to their workplace at the convenience of a phone call. As Meru drilled home this convenience feature through their aggressive media campaign, it was perceived as a giant innovation in the transport sector, and made you wonder why nobody had thought of this idea before. Newspaper reporters took rides in Meru cabs and waxed eloquent about the quality, the comfort and the convenience, which did not require you to sell your body organs for payment. It was a cool time to be seen hopping on and off a cyan Mahindra Logan.

Cut to 2015, Mumbai. Meru cabs lags behind Tab Cabs and Ola Cabs in terms of both fleet size and revenue. You hardly get to see Meru Cabs on the street, but one still dutifully rumbles up to your home if you care to book one. Meru, somehow seems to have lost, if not its market share, definitely its mind share. People no longer associate the zing and freshness of a new venture with Meru. Companies like Ola and Uber seem to be the new in-things, expanding vigorously in new cities, obtaining multiple rounds of funding, each with big dollar numbers and so on. Even when Meru received any funding, there was only limited news about the same. When Ola and Uber arrived with a bang in 2013, they went all guns blazing pitching their ultra-convenient booking processes (app-based). People developed a perception that booking Meru was akin to using the old, round-dial phone.

So why did Meru, despite its early mover advantage and professional driver cadre, fail to make a lasting impact in the minds of people? I think the primary reason is that they did not market themselves to the public as aggressively as the other cab companies did. Even after witnessing the entry of market disruptors like Uber (who Ola copied later on), Meru was very slow on the uptake, hardly revising its strategy across any business function (marketing, operations, pricing). The app seemed hastily developed and froze randomly (it actually still does). It did not help that the CEO of Meru, Siddharth Pahwa kept re-iterating that ‘price cuts are not sustainable’, a move that perhaps makes sound business sense, but simply told the customer that Meru was not going to drop its fares anytime soon. Given our cherished Indian ideal of deriving the maximum value of money from everywhere, customers flocked to the competition. Leave alone customers, drivers, many of whom were fed up with Meru’s erratic payment schedules, migrated en masse to Ola and Uber (this fact derived from the countless cab rides I have taken in Bengaluru, across various services). And since the driver is the first and perhaps the only point of contact between the company and the passenger, talks like the one I used to have with ex-Meru drivers only reinforced a negative image of the company in the customer’s mind. I call this a marketing failure as these interfaces – the CEO, the phone app, the drivers – are the ones which market the company’s offerings to the public. It was important to have resolved the issues at this stage.

But being where we are right now, what can Meru do to improve its image and put up a fight to the new disruptors? I think that Meru does very little justice to the strengths it brings to the table. Ever since I have been using cabs for rides across towns, one thing that has stuck me has always been the fact that Meru featured the most reliable pre-booking service. I have had Ola and TaxiForSure cancel on me at the last second, leading me to scramble for booking new cabs. It was Meru whom I relied on to carry me to my IIM interviews in Bengaluru, and I have never been let down even once. Hence, I think Meru must push its pre-booking reliability as one of the differentiators with respect to its competitors. Meru has one of the best trained driver fleets in service – they are coached in etiquette and soft skills – and the company can sell this point as a value add. Further, Meru has its own low cost service called ‘Genie’ which is truly low cost – it never operates on a surge and has a fixed cost of Rs.10/km with no ride time charges – a boon in our traffic clogged cities. I think it is high time that Meru starts advertising about this service on a mass scale, specifically focussing on the advantages mentioned. They should take a leaf out of Uber’s book and start mailing people about indicative fares on popular routes in major cities – with the added caveat that they mention these are ‘peak-time’ fares, something that nobody else will be able to match. People in clogged markets such as Bengaluru and Mumbai will definitely appreciate the value of this statement.  Granted that price cuts will lead the industry nowhere, it is still essential to drop fares every now and then to entice customers and then offer them the best services to get them to stick on.  Meru has already embarked on a media campaign last year (‘Ab Haath Na Hilao, Bas App dabao’), but this needs to be sustained and a backbone of strong service must be built to support the above claims.

It is evident that Meru still has a considerable market-share in India. But this needs to be bolstered by a media campaign which is not shy of playing to its own strengths aggressively. Else, Meru might risk irrelevance in a market which is as cutthroat as any in the world.

Abhijit Joshi is PGP student (2015-17) in IIM Ahmedabad


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