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BW Businessworld

Smooth Journey, So Far

The seed of the redBus idea was sown on Diwali, four years ago, when Phanindra (Phani) Sama, then a techie at Texas Instruments, desperate to buy a bus ticket to his hometown Hyderabad from Bangalore was turned down by every bus agent. Sama figured there was an immediate and glaring need to provide consumers the convenience of booking a ticket on the internet. The objective was two-fold — to ensure that bus travellers do not have to leave the confines of their comforts to book and get tickets when they need them the most.

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As Phani explains, “Your travel agent may say that the last bus for Hyderabad is at 8 pm, because that is the last bus of the operator he has tied up with. That does not mean there is no bus for the same destination at 10 or 11 pm from another operator… my two friends and I realised (the need) to build a software that aggregates all the tickets to a particular destination. And since not every bus operator can build his own IT system… we decided we would do it for them.”


On redBus, customers can take a look at availability across operators and book tickets across state lines. They can even book return bus tickets — something unheard of earlier.


“We even give a layout of the bus seats. And if you want a return ticket from the present destination, we update our inventory online at the final destination and you can get your ticket,” says Phani. The company has tied up with 450 bus operators in 15 states across India, including market leaders such as VRL Vijayanand Travels, Raj Travels and Parveen Travels.


Phani’s attempt was to find a solution that would help the operators, the agents and the customers all at once. But most operators and agents were not tech-savvy, and selling software to them was not easy — redBus had to train them. Another challenge was to reach the non-English speaking population and those without internet access. RedBus launched services such as mobile-based bookings, made possible through tie-ups with mChek and ngPay, and seven call centres across India with a staff well-versed in English as well as local languages. Travellers can also book redBus tickets at over 75,000 outlets, including those of Thomas Cook, post offices, Bangalore One and Sify.









While 60 per cent of the company’s overall bookings happen online, another 30 per cent come through its call centres, and the remaining 10 per cent through its channels. The redBus technology also powers sites such as Makemytrip.com and Yatra.com, and adds to their overall bookings.


Says Prabhu Salageri, vice-president of Vijayanand Travels and VRL Logistics, the market leader in Karnataka and Maharashtra, “We entered into a tie-up with redBus about a year ago. Now tickets for all routes on our fleet of 200 buses are available on redBus. Though we have some other online partners such as Ticketvala.com and Ticketgoose.com, it is redBus that has been most satisfactory.”





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Adds Subhash Jaweria, managing director of Done Card Utility, whose 15,000 travel agents across India work on the redBus platform, “We entered into this arrangement with redBus about two years ago. We were not doing bus tickets until then. But after using redBus, we have had a very good response… we work on a commission basis.”


In 2007-08, redBus managed only about 300-400 bookings per day at an average price of Rs 500 per ticket. That number has increased to 2,000 today. According to Bharati Jacob, partner at Seed Fund, which has invested over $1 million in the company, “It was very interesting since this was a game-changing idea. Until redBus, this space was an unchartered and unknown territory. And since we have pumped in money, the company has grown almost 100 per cent. We are extremely bullish about them.”


She adds that competition — referring to Ticketvala.com and Ticketgoose.com — is actually healthy for redBus, and so far the company is ahead of its competitors.


In an attempt to remain innovative and engage with its customers, redBus has now started customer reviews to allow them to rate the bus service they have used. “The idea is to allow customers to see what they are choosing. We are also sending the reviews back to the operators, so they can work on changing things. Unfortunately, that is still some time away,” rues Phani.

And the proof of the pudding came in March this year when redBus became the second Indian company chosen by New York-based Endeavor’s international selection panel as one of the four Endeavor Entrepreneurs.

Endeavor focuses on what they call High Impact Entrepreneurs (HIEs) or entrepreneurs with the biggest ideas, the most ambitious plans, and the largest social, economic and environmental impact.


According to industry experts, bus travel is a Rs 15,000-crore business annually in south India and Maharashtra alone. With the internet becoming the preferred medium, they expect more than 50 per cent of the bookings to happen online by 2010. RedBus is set to get a large slice of this huge pie.

dhanya dot krishnakumar at abp dot in


(Businessworld Issue Dated 24-30 March 2009)


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