My First Million: Rajiv Vij

Radio taxis are ubiquitous in India now. And the man who first brought them in is Rajiv Vij, whose eight-year-old firm Carzonrent,runs a fleet of

1,400 Easycabs across the country today. “This industry had unexploited potential and the ground transportation business was largely unorganised at that time,” says Vij, 50.

When he started, Vij says a senior executive at one of India’s leading banks turned down his proposal on the grounds that taxis are best run and dominated by ‘sardars’ and that he couldn’t possibly make a success of it. It took him six months to convince the gentleman to finally agree to fund his venture.

Coming from a fairly modest background—his father was a school principal while his mother was a housewife—Vij graduated from Hindu College and did his MBA from FMS, Delhi. He then worked his way up the corporate ladder, going on to serve as marketing head at Hindustan Motors and then joining ITC’s International Travel House as head of its car rental business.

This was where the seeds of his venture were sown. It was during this stint that Vij got to know car rental companies like Dollar, Europcar and Avis and radio taxi companies like Smart Cabs and Comfort Cabs, and studied their operating systems and challenges.

Finally, after nearly 20 years of employment, he realised the time was right since India’s car rental industry was poised to boom. In September 2001 he launched Carzonrent (India) Pvt Ltd with an initial investment of Rs 2 crore (of which Rs 30 lakh were his own while the rest were borrowings from ICICI Bank and HDFC Bank) and a fleet of 38 cars. In the first month Vij claims he did business worth Rs 30 lakh. Soon after, his company was appointed as a master licensee for Hertz in India. In six months it turned profitable.

Radio taxis were next in line and in June 2006, Carzonrent entered the business with a trial run of 25 taxis in Chandigarh. “The reason for choosing Chandigarh as a launch pad was that it never had a meter taxi service and it’s a much smaller city as compared to the metros, which in a way was appropriate for testing our business model,” says Vij.

Encouraged by the results, Easycabs were launched in Delhi NCR in January 2007 with an initial investment of Rs 15 crore and a fleet size of 250 cars. Last year, it expanded its fleet by adding 750 Mahindra Renault Logans.

Executives at automotive companies were stumped as no other radio taxi firm had ever placed a single order of this size before, recalls Vij. “It was a challenge negotiating the Rs 40 crore contract but after many rounds of meetings the deal was finalised,” he says. Now with a fleet of 1,400 cars Easycabs operates in Delhi, Hyderabad, Bangalore and Chandigarh, and has corporate clients such as Infosys, Microsoft, Nokia, and ISB, among others.

In nearly two years of operation the company has received investments to the tune of Rs 85 crore and it does Rs 4 crore worth business every month, informs Vij. He adds that in addition to buying new vehicles, much of this money is spent on maintenance, recruitment and training of manpower and upgradation of technology that are crucial to maintaining this service-driven business. By March 2009 he plans to grow the Easycabs fleet to 3,000 and start in Mumbai and Chennai as well. From driving an ambassador—his first car—to a BMW now, Vij sure has covered a lot of ground.

Source: Moneycontrol