Friday, October 6, 2017

Start-up innovation fact of the day

I have blogged on multiple occasions lamenting the me-too nature of India's start-ups and the lack of enterprises that leverage digital and other technologies in a manner that has the potential to truly transform specific areas. 

In this context comes an article in The Economist about Rivigo, a Gurgaon-based start-up that uses technology and brick-and-mortar to provide a relay of drivers for truckers and in the process both improve the efficiency of logistics of transportation and the welfare of truck drivers,
Rivigo, a startup based in Gurgaon, an industrial city near Delhi, is using a different road map. Since its founding in 2014, it has set up a network of 70 “pitstops” across India, each around 200-300km down the road from each other. From those, it organises a pan-India relay system, where drivers ply the four- to five-hour journey from their “home” station to the next. They then drive back to their starting point in another vehicle, and clock off in time to make it home for supper most nights. Another colleague is then responsible for driving the load to the next waypoint, and so on.

Administering this logistical ballet is no simple task. Clever software predicts precisely when trucks will arrive and leave pit-stops and which petrol stations they might refuel at most cheaply. A trip from Bangalore to Delhi takes eight different legs. But by keeping the truck on the road more or less permanently, it takes a mere 44 hours to cover the distance of 2,200km, compared with the 96 hours a conventional trucker would take once rest breaks, meals and so on are factored in. Rivigo claims it has no trouble hiring drivers for the roughly 2,500 trucks it now owns and operates... Because most of Rivigo’s driving staff live near pitstops in rural areas between cities, it can pay them much less than truckers who live in cities and command an urban-dweller’s premium. Its monthly salaries are nearer the 23,000 rupee mark. In one way Rivigo’s approach is unusual for a startup. It is busy accumulating assets—those pitstop facilities and trucks—at a time when asset-light platforms matching service users with existing asset-owners are all the rage.
The success of Rivigo underlines the importance of marrying virtual technologies with physical infrastructure assets to address complex challenges. Rivigo's success has been built on painstaking work of building the 70 pit-stops and acquiring the 2500 trucks and their drivers. The IT solution that integrates them may have been the easiest part. But the demonstration effect may be compelling.   

It is impossible to predict which way the market will grow. But it is not inconceivable that Rivigo would have triggered a transformation in India's trucking industry over the next five years. A world of truck operators, pit-stop owners, and driver suppliers, anchored around relay logistics management platform providers, each specialised in their respective core competencies, is not very unrealistic. That would be real disruption and a very productive one at that. We need more such start-ups!

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