Auto rickshaws have become a popular choice of commute in Indian cities these days due to their sheer speed, high availability and cheaper fares compared to cabs. Due to their high demand, especially in the urban areas, opening an auto-rickshaw business in India has become a lucrative prospect for entrepreneurs.
But what should you consider when planning to start such a business? Keep scrolling to find out!
7 Things to Implement for a Successful Auto-Rickshaw Business
Here are the 7 essential tips that can help you start a successful auto-rickshaw business and why having auto rickshaw insurance is essential before starting the business:
1. Perform Strategic Route Planning
Auto rickshaw drivers who cover popular regions within a city, such as college areas, business hotspots, or vacation destinations, tend to earn more. Additionally, you need to ensure surefire availability during peak hours of the day to capitalise on higher passenger volumes.
Finally, your drivers should be familiar with multiple routes leading to the same place to minimise travel times during traffic jams and optimise fuel efficiency. All these factors contribute to your business’s productivity.
2. Apply Effective Pricing Policies
While calculating fares, be extra careful not to overlook any functional expenses of your business. Such costs include your vehicle’s monthly maintenance charges, various permits, fees paid to drivers, etc.
Consider comparing what your competitors charge for the same routes and distances for fair pricing. Keeping your prices close to the range will help you retain clients. The main idea is to work on dynamic pricing models that allow drivers to charge based on time of day and other variables.
3. Purchase Auto-rickshaw Insurance to Protect Your Resources
One of the primary responsibilities of an auto-rickshaw business owner is to protect their vehicles and ensure the safety of passengers. A comprehensive commercial vehicle insurance policy can help achieve this goal by safeguarding your assets and providing financial protection in case of accidents, including coverage for third-party losses.
It also safeguards your investment financially, provides additional coverage through add-ons, and helps prevent legal problems.
4. If Not Comprehensive, Go for a Third-party Auto-rickshaw Insurance
Those considering starting an auto-rickshaw business should be aware that they must have at least third-party liability insurance for each of their commercial three-wheelers.
Unlike comprehensive policies, third-party liability insurance only covers damages caused to a third party or their property due to an accident. Additionally, these policies do not offer optional add-ons.
5. Prioritise Fleet Maintenance
It is essential to schedule standard servicing procedures at regular intervals. These maintenance programs ensure that your vehicle is performing at its optimal level. Additionally, by regularly monitoring the components that perform the heavy work, you can easily prevent sudden breakdowns.
To guarantee smooth operations, always try to maintain a supply of spare parts for quick repairs with minimal downtime.
6. Lay Importance on Safety and Security
You can set your services apart from other auto-rickshaw providers by introducing GPS tracking and other vital emergency communication systems. You may also impose multiple safety protocols for the drivers to ensure minimum passenger risks.
Promoting high security will guarantee repeated business as your customers will readily trust you when they need to reach somewhere quickly.
7. Give Importance to Cost Management
To efficiently manage costs, you need to monitor and control unnecessary expenses. Additionally, you should adopt various budgeting strategies that ensure comfortable rides but lower overhead costs. This will help you scale the business quickly.
Finally, encourage drivers to practice eco-friendly driving. This helps significantly reduce operational expenses.
Common Challenges Faced
Despite taking preventive measures, common challenges still exist in every auto-rickshaw business. These are:
- Common Issues: Auto-rickshaw businesses encounter fuel price fluctuations, vehicle upkeep, regulations, and uncertain demand. These factors occasionally affect profitability and make it challenging to sustain daily operations.
- Future Outlook: Urbanisation and the need for last-mile connectivity drive a promising future for the auto-rickshaw business. Yet, evolving environmental regulations and a shift towards electric vehicles will require significant adaptation.
- Concerns Over Safety: Safety issues in the auto-rickshaw industry involve vehicle crashes, driver conduct, and passenger safety. Under these circumstances, to preserve customer trust, it is vital to organise driver training and integrate cutting-edge technology to ensure the on-road safety of both the vehicle and the passengers.
You now have a clear idea of what you need to keep in mind when starting an auto-rickshaw business. Additionally, you must remember to apply for all the documents and permits required to operate your business legally. This also includes having auto-rickshaw insurance for all your vehicles to comply with legal requirements and avoid hefty fines.
