Imagine an online cab aggregator service that allows you to compare fares offered by different drivers on the platform, how fast they will arrive and also being able to pick a driver based on his rating.

Home-grown cab platform Meru has ushered in a radical new concept where the commuter can choose the ride based on the fare, expected time of arrival, the car model and the rating of each cab driver.

More significantly, it also allows its “driver-partners” to set the rate per kilometre within a price range, with the lowest price being ₹10 per km. And the upper limit will be the existing government-stipulated upper cap.

Says Nilesh Sangoi, CEO, Meru, “This model brings in a transparent pricing model to this space.” He points out that if you look at models like Airbnb or eBay, it is the seller who decides the price based on specifications of product and service.

However, in the cab aggregation space, so far it has been the intermediary that has set the price. Meru’s rivals have heavily discounted this price for the commuter with the driver being compensated for the shortfall.

By handing over the pricing decision to drivers, Sangoi says, “This model has the potential to bring the right price to the space. The driver will never sell at anything less than ₹6 a km as that is not sustainable.” On the other hand, healthy competition between driver-partners will ensure that the commuter gets the best deal.

Meru has launched the pilot in Delhi-National Capital Region (NCR) and Mumbai. Despite being one of the first to get off the block, in 2007, the cab platform has a smaller user base (12 million) compared to Ola and Uber. It has 35,000 driver-partners. Meru’s model is unique in the sense that it owns 50 per cent of the active cars on its network, and says it has a self-sustaining model that does not rely on funding (though it did get funding of ₹150 crore a couple of years ago from Brand Capital).

Asked if this pricing comparison model will help it attract more drivers, Sangoi says drivers love the feature and the adoption curve is very high. “Every driver has played with rates,” he says.

Another feature

Also, it has introduced another new feature to allow the driver to go to a specific location he wants by offering them an option of differential fares. “We find that drivers often want to go to a location near their home at night. Instead of going empty, we have given an option of a differential fare; both the driver and the customer get a good deal,” he says.

Meru’s move comes in the backdrop of Ola and Uber drivers’ protesting against lowering incentives from aggregators even as cab fares have gone up. Sangoi admits as much saying that in the last one year, fares have started going up as subsidies offered by other players have come down.

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