Cars as taxis — Is it a raw deal?

During the course of a week, I get numerous mails from people looking to buy cars and soliciting advice for the best purchase. Often, they also get back to me with the details of their choice and an appraisal of the vehicle vis a vis the others that were being considered.

One such gentleman was Minush Patel from Surat in Gujarat. Mr Patel has a large family and wanted a vehicle that would comfortably ferry them around and make minimal fuss about it. His first mail specifically said–”8 people should sit on the car and price no bar.”

After some diligence, I wrote back saying the Toyota Innova seemed to be the best choice. It was spacious, fuel economical, reliable and sturdy. It was also, a Toyota. Over the next four mails we discussed the Innova at length and compared it to the new kid on the block — XUV5OO. Mr Patel was obviously enamoured by the looks of the Mahindra vehicle but I reminded him that the Toyota was far more reliable and for everyday family use, one may look at that more closely than anything else.

After a month or so and in his fifth mail he informed he actually went ahead and bought the Scorpio instead. And again, specifically, he mentioned his reason for not going for either the XUV or Innova. The waiting period on the XUV put him off and his family was not quite keen on the Innova as it was perceived largely to be a taxi. Which got me thinking. Does it really matter if a vehicle is used extensively as a taxi and does that turn off potential customers?

If we look around in India, we will find Patel and his family is not alone. There are legions of consumers who have side-stepped cars like Indica, Indigo, Omni and Tavera only because they are synonymous with taxis, cabs and cargo vans. It is this perception to a large extent that has stunted the growth of these models.

The Tavera for example sells under 2000 units every month. This is good if you compare it to a Xylo, another contender for the long haul taxi crown, but when you see an Ertiga doing 6,000 unit plus, you do understand the chunk of consumers that does not even look at the Chevy twice.

Or look at the Indica and Indigo cousins. For long, they sold and handsomely at that as they were the only cheap diesel cars available. But that made them attractive to the cabbies as well. Tata, happy to find a steady stream of demand in the commercial segment, did little to discourage them either. Over time though that has come back to sting them. And how. Today, the Indica and Indigo are such underperformers that it has baffled everybody. Poor technology and fit and finish are to be blamed too but Tata has shown signs of improvement in the recent past. Consumers refuse to buy it though. Once a taxi always a taxi it seems.

Globally though, it is a different story. World’s largest selling car –Toyota Corolla, is a massive example. It sold over 1 million cars worldwide, only 2 cars achieved that distinction, and the bedrock of its demand has always been the taxi segment. Hard to believe in a country like India where it is sandwiched between executive and luxury sedans but go to any big city in a developed country–New York, Tokyo, Beijing, Dubai–and you will find a fleet of Corollas ferrying people around.

And Corolla is not alone either. Hyundai’s two largest selling cars–Elantra and Sonata– that sell 1.3 million units annually between them are big on the taxi sector as well. So are the Ford Focus, Nissan Altima and Sunny, Toyota Prius and Volkswagen Jetta. Even in the luxury car industry, manufacturers often fight within themselves for fleet operations. A Mercedes Benz C Class for example is exclusively used by Emirates for airport transfers around the world. And Mercedes is far from embarassed. It is infact proud of it.

These manufacturers have no qualms in supplying their cars for taxi use. Neither are they bothered if their cars are customised and painted in different colours and go around cities as such. Instead, some offer customisation themselves.

To them, the fact that the hard nosed cabbie is buying a Toyota or a Hyundai car for a taxi is a good appraisal of the product. For one, a car needs to be spacious and durable for it to be a good taxi. Besides, no other car is driven as much and in as varied terrains as a taxi so it needs technology too.

Some of it is now visible in India too. The Etios sedan and its hatchback version Liva are now being aggressively pursued in the taxi segment. So are the Hyundai Accent, Nissan Sunny, Evalia and Swift Dzire. Maruti has infact even evolved a new brand the Dzire Tour based on the old 4 metre plus size Dzire especially for fleet use. Individual buyers will always outnumber fleet operations and these are hardcore commercial car makers but it is no longer true that a car as a taxi is a taboo.

The catch lies in which are the fleet operators are using these cars. If it is an organised chain like Hertz, Avis, Meru, EasyCabs or QuickCabs, consumers would be more likely to not mind the choice of the car. But if it is your neighbourhood friendly cabby, you may not want him to be driving people around in the same car that you bought yourself.

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