Last time we had a look at the detailed SWOT Analysis of Ola, an Indian Multinational Ridesharing company. Today we will discuss the SWOT analysis of Meru Cabs which is also an Indian ridesharing company based in India.
Meru Cabs is one of the cab services providers in India, founded by Mr Neeraj Gupta in 2000. The company focuses on providing affordable and hassle-free transportation to different companies’ employees and customers. It also provides premium-class services like a/c cars, tabs, etc. Lately, the company has started providing services in the B2C sector, but its main aim is to increase the focus on the B2B section as it contributes 40-45% of its revenue.
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This blog has been written to gain a thorough understanding of Meru Cabs company, its products, its popularity, net revenue, and to give an authentic picture of the SWOT analysis of Meru Cabs.
About Meru Cabs
(The Founder of Meru Cabs, Source: YoSuccess)
Integrated with electronic devices and GPS/GPRS systems, for the first time India was able to hire AC taxis over the phone! History was made, and so, the first nation’s modern Radio Cabs started in the market of India from the bustling streets of Mumbai.
Meru cabs are the most trusted brand in India for providing cab service to customers as well as corporates. The company provides its services across the top 4 cities of India with a fleet of 5000 taxis. The company also provides an app through which users can confirm their registration and choose where they want to go using GPS.
Meru Cab also focuses on personal rides through their app named “Meru Outstation”, which provides its services for weekends, business, outings, etc., and covers over 7000+ destinations across 100 cities.
The company also provides its services in a business called ‘Meru-biz’, which provides end-to-end mobility of resources in a structured and reliable tech-driven environment. It provides a smooth, smart, and cost-effective travel system that can be customized as per the organization’s needs or budget. Enabling access to all company rides, costs per individual, and setting up rules and regulations for all these features on one platform.
| Founder | Neerja Gupta |
|---|---|
| Year Founded | 2007 |
| Origin | Mumbai, India |
| No. of Employees | 500-1,000+ |
| Company Type | Public |
| Market Cap | N/A |
| Annual Revenue | INR 322.6 Crore (2020) |
| Net Income/ Profit | INR 2.22 Crore (2020) |
Services by Meru Cabs
- App-based Transportation Services
- City Rides
- City Rentals
- Airport Transfers
- Outstation Travel
Competitors of Meru Cabs
Meru Cabs competes on a global level the 5 competitors of Meru Cabs are:
- Uber Cabs
- Ola cabs
- Easycabs.
- Auto Rickshaws & Taxis
- Carpooling Services
Now that we understand the company’s key business, let’s look after the SWOT Analysis of Meru Cabs.
SWOT Analysis of Meru Cabs
SWOT Analysis of Meru Cabs can show how a well-established company uses its opportunities to ensure its growth. It can show how the company takes advantage of its strengths to use the opportunities while working on its weaknesses. SWOT Analysis of Meru Cabs will also reveal its expansion plans.
To better understand the SWOT analysis of Meru Cabs, refer to the infographic below:
Now first let’s begin with the strengths of the company from the SWOT analysis of Meru Cabs.
Strengths of Meru Cabs
- Market Position: Meru Cabs captures a vast market position in the industry. It works across 24 cities in India. It carries a very good brand identity along with a loyal customer base of 2 million and its geographical reach is vast which covers over 7000+ destinations across 100 cities.
- First Radio Taxi Operator: Meru Cabs was one of the first companies to start radio cabs. It has over 2 million customers and is recognized with multiple awards. It carries high awareness as a taxi operator.
- Service Quality: Meru Cabs are considered to be very secure in terms of safety and in terms of hygiene they are well maintained. It also has call centers for emergencies along with it every fare is tracked and is available 24×7 for e-bills. Meru Cabs have trained chauffeurs who get into the job after completing the training in Meru Training Academy.
- Dynamic Pricing: Meru Cabs has been using a dynamic pricing model to rate the ride according to the demand of the rides in a particular region or during bad weather conditions. This helps to manage the supply efficiently and at the same time adds to the bottom line.
- Stake of Big Company: Mahindra and Mahindra holds a majority stake in Meru Cabs because of the company offering a wide range of mobility services with a fleet of 1300+ cars to individuals as well as business houses across India. With the stake of such a big company, Meru Cabs got help to expand its service offerings and added electric vehicles in its fleet.
Weaknesses of Meru Cabs
Weaknesses are the fault or limitations which are keeping the organization away from achieving its objectives. Following are the weakness of Meru Cabs:
- Poor Management: Currently the management of Meru Cabs is not very good which leads to lower productivity and efficiency in the business. Sometimes it is difficult for the customers to contact the company if the server is down.
- Lower Market Share: Meru Cabs captures very less market share in the industry as compared to Ola and Uber, and any surge in the competition may lead to lower profitability and lower margins.
- Availability: Generally Meru cabs are available when guests call for it. So there’s a time pause between the call time and factual lift. They aren’t as fluently available as original non air-conditioned cabs are.
- High Investment: In Meru Cabs, the cabs are owned by the company, so the company is responsible for the maintenance of the cars, which indirectly increases its expenses. Whereas its competitors like Ola who is an aggregator does not have to own a fleet of cars to run its business.
- No Control over Chauffeurs: Meru Cabs has left itself with no control over the chauffeurs. Chauffeurs play an important role in making the brand name of Meru Cabs and hence any misbehaviour of the chauffeur with the customers directly reduces the brand image in the market.
- Weak Support: The customer relations services offered by Ola are not up to the mark and customers are always regretting and carping over the support they receive from the brand. Also, the person cannot book an outstation ride at a sudden moment due to Meru Cabs’ policy of pre-bookings which should be done by the customers 3 to 4 hours ago from the time of departure.
- Dependence on the Internet: Customers are only able to book rides if they are connected to the internet. As in India, connectivity is an issue and hence customers are not able to book rides. Though they have started with offline booking it is not yet very helpful and appropriate.
- Labour-Intensive Industry: Meru Cabs is dependent on people and is, therefore, a labour-intensive business. This dependence on people makes it exhausting for the company to manage regular training of delivery partners and performance-based appraisals.
- Changes in Technology: The system does experience glitches from time to time which requires frequent changes in technology as new and better technology comes up now and then. It gets both difficult to train people and an expensive affair to bring in changes in the technology used frequently.
Opportunities for Meru Cabs
Opportunities are the areas where the business can expand and take a lead in order to diversify the customer base. Following are the opportunities for Meru cabs:
- Convenience in Demand: Every customer seeks convenience, which should be provided by Meru Cabs to further create a huge demand. The company can operate through apps and make it more user-friendly for the customers.
- Increase its Business Model: Meru cabs can think of different strategies like partnerships with more recognized companies which will increase its market share. Instead of focusing on only metro cities, it should start focussing on tier-2 cities, this may lead to an increase in its market share and presence.
- Expansion in League Two Metropolises: Meru so far is feeding only to major metro metropolises. They should consider extending their services to league two metropolises because these metropolises are growing fleetly.
- Reduce its Expenses: They should try different techniques of operating their services, like, instead of giving drivers the car, providing the job to the one who owns the car would be cost-saving for Meru Cabs. Also, the huge number of staff which the company has recruited in its call centers are useless until and unless there is a surge in booking of its services.
- Unorganized Market: The unorganized market in the taxi and cab industry is huge in India, approximately 90%, and hence the potential is high for Meru Cabs to fill this gap in the market through providing first class service.
- Improper Government Transport: In Tier 2 and 3 cities, there has been a lack of proper government transport service and hence this can knock the door of opportunities for Meru Cabs to look into those cities and capitalize on the opportunity.
- Wider Market: Meru Cabs shall attract non-tech-savvy customers, Meru Cabs have to rethink its business model where such segments can also make use of their services and it will help Meru Cabs in a big breakthrough to enhance the customer base to a greater extend with good margins of profit.
Threats to Meru Cabs
Threats help us to understand the areas which can impact the business at any time. For Meru Cabs, the following are the threats:
- Increasing Competition: Rising competition has become a major threat to Meru Cabs. Companies like Ola and Uber have mainly captured the industry with 80% of the customer base. Even the absence of clear regulations of the government is acting as a threat to Meru Cabs.
- Change in Customer Preferences: The customer’s preference is very dynamic. It keeps on changing very frequently. It has become difficult for Meru Cabs to cope-up with their customers and parallelly upgrade their technology as needed.
- Lower Market Position: Although Meru was the first player in this industry; it’s now facing stiff competition from players like TabCab, Mega Taxicabs and so on. There’s a veritably lower position of Meru Cabs among all these taxicabs.
- Rising Incidents: Females in the nation frequently get assaulted by cab drivers and such incidents are increasing day on day. Incidents like these if they happen with Meru Cabs will question the safety which is guaranteed by Meru Cabs.
- Growing Safety Concerns: Meru Cabs should promote the safety benefits of its services because customers frequently switch from Meru Cabs to its competitors due to concerns about the legality and safety of cab services.
This ends our complete SWOT analysis of Meru Cabs. Let us conclude our learning below.
To Conclude
There’s no doubt that Meru has been a success story till now, but what hurts the most is the company’s No-holiday Policy. The drivers have to work every single day, in case of sickness or family emergency they still need to pay the permanent amount fixed by the company. In India, working every day is not a problem from a driver’s perspective as they are already used to it but it hurts them financially when they need to take urgent leaves.
Talking about the business, Meru Cabs is facing direct competition with Ola, Mega Cabs, Uber, etc. Meru Cabs is facing losses as it is not able to find a break-even financially. The company is still under constraints due to factors like internal inefficiencies, long cab downtime, lack of qualified drivers, driver strikes, increasing costs, expanding operations, and competition from other players.
There are factors due to which the company is unable to surpass its competitors and the biggest one plaguing them is their lack of marketing efforts. Marketing is an important function of any company’s existence and in the current scenario, the field is rapidly digitizing. If digital marketing interests you, you can enrol in IIDE’s 3 Month Advanced Online Digital Marketing Course which will help you upskill yourself in all the aspects of digital marketing.
We hope this blog on the SWOT analysis of Meru Cabs has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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