Sound Businesses: Profiles of companies and business models we are keeping an eye on.
The revenue opportunities in the rideshare boom don’t just live behind the wheel. Viraj Ratnalikar, founder of Car Quids, thought of an opportunity while watching cars drive by at lunch.
Car Quids connects advertisers with drivers who are willing to turn their personal vehicles into moving billboards. These partnerships bring eyeballs to advertisements in a unique way and put extra bucks into the pockets of drivers, while allowing Car Quids to collect valuable data on the behavior and demographics of rideshare drivers and riders. Since its founding in 2014, the U.K.-based Car Quids has secured partnerships with a number of major companies, including Pizza Hut, the delivery app Just Eat and Ola.
Ola, a leading Indian platform connecting customers to cabs, auto-rickshaws and shuttle buses, received $92 million in funding in February from Flipkart co-founder Sachin Bansal. With Uber aggressively expanding into the region, the company is expected to use the funding to continue to fight off larger competitors and expand outside of the Indian market.
In this interview, Karma Network’s Contributing Editor Michael Moran speaks with Ratnalikar about Car Quids’ growth trajectory and how he sees Ola’s recent funding is good news for both Ola and his own company.
Michael Moran: How does your revenue model work?
Viraj Ratnalikar: It’s all from the advertisers. It’s completely free to sign up. Anybody with a car can register. It takes about five minutes, and there are no fees involved at all for the consumer.
Brands will then come to us and tell us what they’re looking for. We have a lot of data on our drivers, including, obviously, what car they drive, where and when they drive, but even demographic data. So things like, do they have a family? Where do they work?
And based on what brands are looking for, in terms of what audience they are targeting, we will pick the right cars for that campaign. Once the drivers have been matched with an advertiser, they then get the car branded up and start earning money every month after that.
Michael Moran: If I had a fleet of like Rolls Royces or Bentleys or Aston Martins, could I command a higher PPM?
Ratnalikar: Absolutely. And now that we’ve established ourselves and we’ve got the basics nailed down pretty well, we are looking to do that kind of thing. As an example, we had one of the luxury hotels here in London and one of the cars in that fleet was a brand new Tesla. As we scale this, as we are able to do more with our fleet, that is one of the ways in which we’re growing. Matching luxury brands with luxury cars.
Michael Moran: Britain culturally is not a flashy place usually. Is there any resistance culturally to doing this?
Ratnalikar: There are always going to be people for whom this isn’t the right thing. You know, for whatever reason it doesn’t make sense for that individual, but ultimately on the driver side, the market we have here is so big that we need a very tiny fraction of people to be willing to do this for the business work. I mean we’ve got almost 25,000 drivers now. It’s the kind of thing which, yes, maybe one in five people wouldn’t be up for it, but that still leaves way more than we need to make this idea work.
Michael Moran: Have any competitors popped up to copy you?
Ratnalikar: We’ve had a few that have come and gone. We have a bunch of companies across the world that are starting to do what we’re doing now, both in the U.S. and beyond. And we have had some companies that are British companies, as well as foreign companies coming to the U.K., trying what we’re doing. But I think at this stage, nobody has come anywhere near our level of traction in the U.K. We’ve done over 50 campaigns. We’ve worked with publicly listed companies. One brand was Pizza Hut. There hasn’t really been anyone that’s kind of made that big of a dent in the space as we have.
Michael Moran: Ola is one of your clients. What do you think its funding from Flipkart co-founder Sachin Bansal means for them and for the larger industry?
Ratnalikar: They’re up against a couple of extremely well funded competitors. I see the reason you need to raise that sort of war chest if they are going to tackle them head on, which is what they’re doing.
I think one of the interesting ways in which Ola has grown differently is their approach not just to focus on the top largest cities in the country. They’re going pretty deep. Essentially we need taxis, or minicabs as they are called in the U.K., in any city, regardless of whether it’s London or whether it’s a small town with 30,000 people.
And I think one of the really interesting ways that they are expanding is that they are actually catering to the smaller cities and towns pretty early on. I think that’s a pretty clever way of going about it because the cost of that task is going to be low for servicing those cities. They can learn in a much smaller market, and overall I think that puts them in a very good position to make decent gains in the larger markets too.
Michael Moran: How does your relationship with Ola work, and how is it mutually beneficial?
Ratnalikar: Synergies with Ola are really strong. Go back to the basics. There are large elements of safety in numbers. For any new entrant into the market, they want to show that they’re big. They want to show that they’re credible. And by using Car Quids, they can very quickly make a big entrance into a new city, and that’s what they’ve done with us in three different cities across the U.K. Hopefully more this year as well. Essentially building trust very quickly and exceeding that initial user base really, if you like, by looking a lot bigger than they are.
Michael Moran: I’m sitting here in Denver, Colorado. Not a single car I see outside my window has an ad on it. Are you thinking about branching out overseas?
Ratnalikar: Absolutely. And I think we will. But I think there’s a lot of ground here to win in the U.K. Really our first thing is to cement our stronghold in this market before we look abroad. Now whether that’s looking at the U.S. or something more Asian, I don’t know yet, but both options are on the table.
Michael Moran: Is this a common practice overseas?
Ratnalikar: It is and it is growing as well. There are two things that are kind of providing a bit of a tailwind here. The first is that consumers’ attitudes are shifting. If you look at the success of companies like Airbnb, essentially renting out homes or rooms [in] our home to a stranger, that’s becoming a lot more accepted and socially done, which wasn’t the case in 10 years ago.
Secondly, the costs of scaling are coming down pretty rapidly for a business like this. So something that is growing across the world will be pretty mainstream within five or 10 years.