India’s retail mobility segment has witnessed significant growth over the past decade, with ride-hailing giants like Ola, Uber, Rapido, and Meru Cabs dominating the market. However, with market saturation in the B2C segment, these companies are increasingly exploring new avenues to expand their services. One such area is the corporate mobility segment, which has long been the domain of traditional corporate travel providers such as ECO Mobility, Avis, Carzonrent and the likes. Ride-hailing giants like Ola and Uber for Business have made inroads into this sector over the years, but they face several challenges.[1]
Feature Comparison: App-Based Aggregators vs PAN-India Corporate Mobility Providers
The corporate mobility landscape in India can broadly be divided into two categories: app-based aggregators and traditional PAN-India corporate mobility providers like ECO Mobility, Avis and others. Let’s examine the key differences between these two categories.
- Focus: While app-based aggregators primarily focus on the B2C segment, catering to individual consumers, traditional corporate mobility providers focus on the B2B segment. These providers are dedicated to fulfilling the specific corporate travel demands of businesses, offering a more personalized approach to corporate travel.[1]
- Resources & Service Levels: App-based aggregators typically have limited resources when compared to traditional corporate mobility providers. Their fleets are not dedicated to corporate use, and drivers may operate on a flexible, non-exclusive basis. On the other hand, traditional providers maintain extensive fleets dedicated to corporate clients. These fleets often come with experienced drivers who are well-versed in handling corporate travel requirements.[1]
- Technology: App-based aggregators have generally made less investment in fleet management systems (FMS) compared to traditional mobility providers. Established corporate mobility providers have developed comprehensive FMS for the efficient operation of their fleets, which is critical for meeting the reliability and service standards required by corporate clients.[1]
- Driver Liability: One of the primary challenges for app-based aggregators is their limited control over driver behavior and schedules. Drivers working for these companies are not exclusively committed to any one platform, meaning they may not prioritize corporate clients. In contrast, traditional corporate mobility providers employ drivers directly or have strict contractual agreements, ensuring a higher level of accountability and reliability.[1]
- Service Differentiation: While app-based aggregators offer platform management services, they struggle to provide the comprehensive service offerings that traditional providers do. These conventional services include regular vehicle maintenance, hygiene standards, and personalized service levels, which are essential for corporate clients.[1]
- Vehicle Quality: Concerns regarding the quality and maintenance of vehicles in the app-based aggregator space are common. For corporate clients who demand comfort and safety, these concerns can pose significant risks. Traditional providers, on the other hand, maintain high standards for vehicle quality and ensure regular upkeep, which is a key advantage in the corporate mobility space.[1]
- Service Consistency: Inconsistent service quality is one of the significant drawbacks of app-based aggregators. Due to the varied nature of their fleets and the occasional lack of driver professionalism, corporate clients may experience disrupted schedules or poor service quality. Traditional providers, however, offer a more consistent and reliable experience, explicitly tailored to corporate needs.[1]
- Driver Professionalism: App-based aggregators often struggle with issues of driver professionalism and conduct. Concerns about drivers’ appearance, behavior, and attitude can deter businesses from relying on ride-hailing services for their corporate travel needs. In contrast, traditional corporate mobility providers like ECO Mobility invest in the training and professionalism of their drivers, ensuring that employees experience a smooth and professional ride every time.[1]
- Cancellation Rates: Frequent driver cancellations can cause significant disruptions to employee schedules, especially for businesses that rely on timely transportation for meetings, conferences, and daily office commutes. App-based aggregators have been known for high cancellation rates, which creates an unreliable experience. Corporate mobility providers typically face minimal cancellations due to their dedicated driver networks, reducing the chances of disruptions.[1]
Challenges Faced by App-Based Aggregators in Corporate Mobility:
While app-based aggregators have made steps in entering the corporate mobility space, they are not without challenges. Here are some of the key obstacles they face:
- Shift in Branding Perception: App-based aggregators have firmly established themselves in the B2C segment, where they serve individual consumers. This strong brand association with the retail market makes it difficult for these companies to shift perceptions and position themselves as reliable service providers for businesses. Moreover, the significant cash burn associated with maintaining B2C operations means that aggregators have limited resources to focus on their B2B offerings.
- Competition with Established Employee Transportation Service Players: One of the biggest hurdles app-based aggregators face is competing with traditional corporate mobility providers. Employee Transportation Service players have a long history of providing corporate travel services with dedicated fleets, professional drivers, and consistent service standards. It will be a challenge for app-based aggregators to match the resources, experience, and reliability that incumbent employee transportation service providers offer.
- Technology Integration: App-based aggregators need to significantly enhance their investment in technology, particularly fleet management systems (FMS), to be able to serve the corporate market effectively. Without these systems, it becomes difficult to optimize operations and deliver the level of service and reliability demanded by corporate clients. Traditional corporate mobility providers already have well-established FMS that allow them to provide seamless and efficient services.
- Driver Liability and Control: One of the most critical issues for app-based aggregators is the lack of control over their drivers. Unlike traditional providers, whose drivers are employed directly or under strict contractual agreements, app-based aggregators have limited authority over drivers. Drivers can work for multiple platforms and often do not prioritize corporate clients. This lack of exclusivity can result in inconsistent service, which is not acceptable for corporate clients.
- Service Differentiation: App-based aggregators struggle to offer services beyond platform management, making it difficult to stand out in a competitive market. Corporate clients expect much more than just a ride; they demand services such as vehicle maintenance, hygiene standards, and a consistent experience. This service gap presents a significant challenge for app-based aggregators trying to enter the corporate mobility market.
- Low-Quality Vehicles and Inconsistent Service: The issue of low-quality vehicles is another concern for app-based aggregators. While these companies may offer competitive pricing, the quality and maintenance of their cars often fall short of corporate standards. Additionally, inconsistent service levels, including unprofessional drivers and poor vehicle upkeep, make it difficult for app-based aggregators to meet the needs of corporate clients.
- Frequent Cancellations: Frequent cancellations by drivers can severely disrupt the schedules of corporate clients. For businesses that rely on punctuality, such cancellations can result in delays, missed meetings, and increased operational inefficiencies. This issue further complicates the task for app-based aggregators looking to build a reliable corporate mobility offering.
- Corporate Compliance: Corporate clients have strict requirements when it comes to compliance, hygiene, and safety standards. App-based aggregators struggle to meet these stringent demands, as their business model relies on a flexible and decentralized driver network. Traditional providers, with their dedicated fleets and experienced drivers, are better equipped to meet these standards.
Since 2018, drivers for app-based aggregators have protested declining income and incentives, leading to occasional strikes. These disruptions impact corporate productivity by interfering with employee travel to the workplace. Until app-based aggregators address these issues, particularly around driver satisfaction, control, and income stability, they will face ongoing challenges in the B2B market. Without resolving these concerns, app-based platforms will continue to struggle in competing with traditional corporate mobility providers, who offer more consistent and reliable services for businesses.[1]
In conclusion, while app-based aggregators face significant challenges in the corporate mobility market, such as inconsistent service, driver liability, and branding issues, traditional providers like ECO Mobility offer a more reliable and professional solution.
ECO Mobility delivers tailored, high-quality services with dedicated fleets, trained drivers, and a focus on hygiene and safety, meeting the specific needs of corporate clients. Unlike aggregators, they maintain close relationships with drivers, ensuring professionalism and fewer cancellations. ECO Mobility also adheres to compliance and safety standards, addressing issues where app-based models fall short. As app-based aggregators struggle with high cash burn rates and fluctuating service levels, ECO Mobility’s stable approach makes it better suited for consistent corporate travel solutions.
Reference/Source (F&S Report) Page no. 26 – 8.2. Exploring the Viability of App-Based Aggregators in Corporate Mobility
