The Go-Jeks of India are arriving

Traffic in Bangalore. Photo credit: Eirik Refsdal.

Product X – soap, for example – has always been used to do Y – clean things. It has managed to infiltrate the depths of the market with years of effort from a series of giant, global players who are all making a ton of money off its sales. Is there any way to take advantage of the infiltration, create another industry, and start something new – infusing the soap with nutrients to dissolve in polluted rivers, perhaps – with the same product?

Ashutosh Johri and Manu Rana, the founders of Baxi Taxi, a ride-hailing app for two-wheelers, would say yes. In their case, the product is in a category for which India holds the second rank in the world – two-wheeler scooters.

As of December 1, 2015, the Indian state of Haryana officially allowed two-wheelers to operate as commercial vehicles in the state, making it the second state to do so after Goa. The new-found freedom has arrived partially as a result of the founders’ hard work – which, as the team explains, has nothing to do with the pace of the government.

“It was easier to make this happen than it was to raise funding,” explains Baxi co-founder Ashutosh Johri. “Imagine if you have a hundred people waiting outside your door. One has to be patient, but more importantly, one has to have legitimate reasons. For us, it was our product. We went and met them, they gave us feedback, we came back, and reworked our model, it went on and on like that.”

Baxi just announced a US$1.5 million round of funding from investors like Manish Kheterpal, partner at Canaan Partners, and Alok Mittal, CEO of Indifi Technologies. It started operations on December 1st, which is coincidentally also Gurgaon’s “Car Free Day”. The team explained in a press release that they hope to raise another round of US$25-30 million in the next few months.

Two wheelers everywhere

The market for two-wheeler services is huge. While 20 million four-wheelers have been registered in India since its independence in 1947, this number is minuscule compared to the 115 million two-wheelers registered, Ashutosh explains.

M-Taxi launched on December 1st in Haryana, India.

In parallel with the launch of Baxi, Arunabh Madhur’s M-Taxi also announced its service and flagged off its first ride on Monday with Balbir Singh, deputy commissioner of police in Gurgaon. It also announced a round of angel funding last week.

Globally, between Vietnam’s ojeks and Nigeria’s okadas, commercial two-wheeler vehicles have managed to cover the world. Indonesia’s Go-Jek is backed by Sequoia Capital.

“Motorcycle taxis are popular modes of transportation for the speed, efficiency, and company they provide,” explains Ashutosh. “I was heading an IT company on the continent of Africa before returning and it was exceedingly popular there. I’ve taken them several times.”

Still, others who have tried to enter the space in India have faced issues. In June, two-wheeler hailing app HeyTaxi! was shut down because it violated the motor vehicle regulations of the state of Maharashtra, the hometown of Mumbai.

Other aggregators – even a behemoth like Uber, with its infamous rape case, for example – have had difficulties verifying the reliability of their drivers. “We’ve partnered with a large sourcing company for that specifically,” explains Ashutosh. “Starting from sourcing to verification to deployment, we check everything. We also train our riders on managing technology and making customers feel happy.”

Sticking to customer transport