Logistics services drive growth for auto-rickshaw app Jugnoo

After having started by providing ‘affordable and reliable’ auto-rickshaw rides to commuters in close to 40 cities, app-based mutli-service provider Jugnoo has clocked a sharp growth in logistics services.

Based out of Chandigarh, Jugnoo delivers raw materials and finished products to restaurants, florists, chemists and pathological laboratories, and distributes sports equipment, stationery and electronic hardware, among others.

Cargo delivery in three-wheelers is catching up so fast that in Gurgaon, where the firm launched services only a month-and-a-half ago, about 1,000 autorickshaws have already signed up, Zorawer Singh, who is driving the initiative for Jugnoo, told BusinessLine . Customers include Burger King, florists, Subway, Ferns N Petals, Baskin Robbins and many neighbourhood kirana stores

Of the over 10,000 auto-rickshaws on Jugnoo’s platform, 4,500 have signed up for delivery service. As of now, the firm offers cargo delivery in 13 cities for the business-to-business segment. The recent spurt in growth is driven by auto drivers who ferry passengers and have time to spare, and also Jugnoo’s “competitively priced” cargo transportation.

Jugnoo’s charges for cargo movement are the same as that for passenger movement. At present, the fares of auto-rickshaws hired through Jugnoo’s app are lower than those defined by a city or State’s transport regulations, said Singh.

The company, which at present offers a flat tariff level through the day, is, however, looking at dynamic pricing, Singh added. At times when it rains, there may be demand, but supply of autorickshaws may be low. This situation may call for higher tariffs, he said, adding that while Jugnoo’s tariffs are based on distance and weight of packets, the drivers get paid more if they help in loading and unloading.

Dodo, a door-to-door delivery service lead by Singh, did so well that it has been spun off as a separate segment and re-branded as Jugnoo Delivery. It is now replacing transportation services, earlier done through commercial vehicles, two-wheelers, cycle rickshaws and even auto-rickshaws that were independently hired.

From a pricing perspective, the highest delivery charges are in Bengaluru, as also Nagpur, where auto-rickshaws run on petrol as well as diesel. In cities such as Delhi and Gurgaon, autos are CNG-based and thus have lower fares.

The delivery timings also vary across cities, with the majority offering services between 8 am and 11 pm, stretching to 12-12:30 am in Chandigarh. The company is looking to extend the time to 12-12:30 am in Gurgaon, too.

The firm, which has about 350-400 people employees across 36 cities, is looking to expand to Chennai and Hyderabad in a month, and to over 20 cities cities by this year-end, Singh said.

Additionally, Jugnoo is looking at widening its services to allow multiple pick-up and delivery points, as the three-wheelers on its platform have flagged interesting patterns. For instance, demand from restaurants rises between 12 noon 3 pm in Chandigarh and florists in Bengaluru report higher demand after 11 pm. While most of the demand is intra-city, demand for inter-city delivery is also growing, as the auto-rickshaw fleet on Jugnoo’s platform has a mix of commercial and passenger vehicles.

“We never thought we will have demand from pathological labs, surgical equipment from hospitals, textiles and dry-cleaners,” Singh said, adding that the firm is already cash positive.

The delivery service has a pre-paid wallet for the merchants, who can credit the amount for Jugnoo delivery using cheque, cash, PayTM and debit or credit card. The payment gateways through debit/credit cards were added last week. The platform has over a 1,000 merchants, of which 600 are active users, with 140-150 transactions daily. On the drivers’ side, Jugnoo credits the fare twice a week into the account of each driver. Jugnoo Delivery gets a commission for each transaction.

Acquiring new customers and three-wheelers while keeping the fares competitive and fulfilling demands is a challenge for the platform, which is also in talks with FoodPanda, Ekart, Flipkart, Jabong and a national-level courier service. As of now, the company is operating in B2B, as getting into B2C delivery will be extremely challenging, Singh said.

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