Meru Cabs: Following the Principles That Guide Innovation Opportunities
Mumbai, India has been famous for its fleets of black and yellow taxis and auto-rickshaws for short- or long-distance hauls. With people’s income beginning to rise in the last decade and Mumbai now becoming a financial stronghold, there was a sudden demand for better service. Taxi owners and co-operatives responded by making the existing options more comfortable, providing comfort in the form of cleanliness and air conditioning. But to the current market segment, this move was underwhelming. It was merely considered an improved and more expensive taxi.
In order to view how this industry took a turn, we first must look at the Job To Be Done (JTBD)—it is the fundamental need of a customer for which companies create solutions (products or services). Consider candle manufacturers. They had made constant efforts to improve the life of candles (to last longer), reduce smoke, and increase the intensity of light so that they serve the JTBD of “providing illumination when required.” The invention of the tungsten wire and light bulb created a better solution for the JTBD of illumination. Today, candles are decorative items that occupy a corner in our home but not a source of light or illumination. Several such examples (see figure) have revolutionized their respective domains by either creating a new market, or redefining the meaning of success in their industry. And we can credit their achievement to appropriately identifying the JTBD.
So for the taxi owners and cooperatives in Mumbai, they needed to figure out the JTBD in order to create a better service. In 2007, a company called Meru introduced a new concept called “radio cabs.” One may consider the services of Meru cabs—advanced booking, reliable drivers and security—as a similar upgrade to what the other taxis were providing. But the numbers tell a different story. Meru has scaled to 5,000-plus cabs in three years, across Mumbai, Delhi, Hyderabad and Bengaluru. The third-largest "radio taxi" company in the world and the largest operator in each of the cities where it operates, Meru makes 20,000 trips per day and carries over 1 million passengers a month.
The key of Meru’s success lies in identifying the job that taxi companies performed. The JTBD can be simply considered as “reach one destination from another.” Customers like to get this job done with criteria such as increased convenience, increased comfort, minimal waiting, increased safety and increased reliability. This is what Meru identified correctly, and the solution features that Meru provides satisfy these hiring criteria for the JTBD. Neeraj Gupta, founder of Meru Cabs, identified this gap when he was traveling in London and Singapore, where such services were available. Even though the concept of radio cabs existed, to adapt it to a new environment was a struggle in itself. In the case of Meru, the factors the company had to struggle with included permits, licenses, drivers, logistics, political revolt and much more. The real challenge, though, was to convince their customers that Meru could help them “reach a destination with ease” since this was a cultural as well as a behavioral shock.
Meru Cabs proved that there could be disruption in a sector which had been dormant for decades just by asking what the Job To Be Done was. In fact, we wonder if 20 years down the line we will see the black and yellow taxis only in museums. The future of any company not only relies on improving its products and services, but also in questioning what the fundamental customer need is that these products and services are fulfilling.