Dubai: Jugnoo, India’s third-largest ride-hailing app after Uber and Ola, is making its foray into the UAE to offer on-demand rides and local deliveries on its business-to-business (B2B) platform.
Jugnoo is a technology-driven on-demand auto rickshaw aggregator operating in Tier 11 and Tier 111 cities across India.
The start-up carries with it an experience of over four years in on-demand business and has come up with the opportunity to foster entrepreneurship in the global on-demand industry.
“We started using our logistics network and ventured into new verticals such as Meals, Fatafat and Jugnoo Delivery within two years in India,” Samar Singla, founder and CEO of Jugnoo, told Gulf News.
The company is now offering its technology platform for running on-demand services with partners, which means a partner will be using its platform and run the day-to-day operations.
Jugnoo is present in India, Singapore, Trinidad and Tobago, Sri Lanka, Bermuda, Panama, Mombasa, Oman, Congo, Nigeria, Indonesia, England and the US.
- Samar Singla | Founder and CEO of Jugnoo
“We realised about six months ago that the current business model is very difficult. You know about the potential merger between Uber and Careem. The same thing is pretty much happening across the world and it is not sustainable for the companies,” he said.
Himanshu Pal, principal consultant at Kantar Consulting, said that the news relating to the potential merger between Uber and Careem is not entirely unexpected, considering the wave of M&A activity the sector has seen in the last couple of years, including Uber divesting its stakes in several markets in Southeast Asia, Russia, and China.
He said that a recent Kantar TNS eCommerce panel suggested that Uber was outperforming Careem on both the number of users as well as in the number of trips.
Pal said the biggest driver of change is evolving ‘consumerism’, which has seen an increased preference for renting vs owning especially among the digitally dependent youth.
“With roughly 50 per cent of MENA population under the age of 30, it’s no surprise that the on-demand rental economy is booming with consumers willing to rent not only cabs but also fashion products and accessories. Secondly, consumers are looking to simplify choices and prefer a single vendor/app/platform that can serve various needs rather than having multiple vendors,” he said.
Jugnoo launched its services in Singapore about three months ago with a more open approach known as “reverse-bidding” model for the first time.
Singla said that they have a business partner in Singapore and have 1,000 drivers signed up and 2,000 drivers are in the pipeline.
“This shows that drivers are looking for options and there is a chance for other players to come in and do something. The idea of the new model was motivated after the proposed buyout of Uber’s south-east Asian ride-hailing and food delivery business to Grab,” he said.
Currently in a ride-hailing system, when a customer books a ride on the app, it displays the price a customer has pay at the destination.
In “reverse-bidding” process, when a customer books a ride, drivers nearby will bid their own prices for the ride and the customer can choose from the bids.
“We launched the “reverse-bidding” service in Singapore and other eight more countries where the geography is small but the GDP is high,” he said.
In Dubai, he said it will not be the “reverse-bidding” process and it will be the usual car hailing service and the partners would be taxi companies, rent car companies or private limousine companies.
“We don’t want to be in the mainstream business as Uber and Careem are competing for each other while our focus will be on the niche business. The Uber’s plan to buy other car-hailing companies will help us. The moment a big consolidation happens, the small players have a chance,” he said.
The company does not have a partner in Dubai yet but have started the marketing process.
“We have some leads in the non-taxi space such as grocery delivery, laundry services, pick up and drop off services, etc. We don’t see a lot of traction in the taxi space in Dubai but there is a lot of demand in on-demand services such as flower and medicine deliveries,” he said.
Moreover, he said that Dubai is the most open market in the Gulf and big enough from any business point of view.
“Our focus will be on Dubai for the time being and then expand to Abu Dhabi. The B2B part of our business has started making money and expect to break even by end of the year. We don’t need external capital to run the business and as a group, we have two companies. Fatafat is B2B of the business and Jugnoo is now on the B2B side,” he said.
