Nearly 18 months after they launched their venture, Abinav Raja and Shekhar Bhende, co-founders of mini-truck aggregation and hailing platform Lynk, are looking to expand the operatrions to all the major cities in the country. They have also got enquiries from logistics companies in South-East Asia, which are interested in the aggregator model, according to them.
Friends from when they were studying at Northwestern University in Chicago, Raja and Bhende thought of “an Uber-like” concept for small trucks. They did a Beta model of their app in October 2015, which went live in June 2016, in Chennai. Their plan was to stabilise and grow the operations in one city and then expand. They launched the app in Hyderabad in May 2017.
Ensuring a smooth ride
According to Raja, they wanted to understand the fundamentals and the economics of the business, get the business model right and ensure there were no hiccups before they expanded. “We are already unit-economics positive in Chennai. In Hyderabad too, we have been able to achieve break-even. We are breaking even as a business and starting to make money. We are growing 10 per cent month-on-month,” says Raja.
Bhende adds the company has double-digit gross margins.
Their idea when they started the business was to ensure there was better utilisation of trucks for drivers and give customers easy accessibility to trucks without having to haggle for the rates. More than 70 per cent of their business, according to Bhende, comes from small businesses, which have to move goods within the city. These could be furniture showrooms or timber merchants who want to transport goods to the customers’ locations. Lynk provides only the transportation; if customers want help in loading and unloading the goods, they will have to pay extra. Customers, after registering themselves in the app (available both in Andriod and iOS platforms), can choose the type of truck, mode of payment and opt for value-added services such as insurance and labour. “You just book a truck. The truck comes to you in 15-20 minutes. When we started, it took a lot longer — up to one hour. But as we have grown, the density of trucks on our platform has increased and we have brought the wait time down,” says Raja, 24, a scion of the promoter family of Ramco Group.
According to Bhende, the app has been downloaded more than two lakh times. Over 30,000 unique customers access the platform every month and more than 2.5 lakh transactions have been completed on the platform so far. The platform has over 1,500 registered mini-trucks, with the top drivers earning close to Rs. 45,000 a month. The drivers now do more than three trips a day now, compared with just one or two previously.
Bhende, 26, said the company has fixed tariffs as it wanted to create a predictable and curated experience for the customer. “We did a lot of analysis to understand the fair price for a truck,” he said.
Unlike other logistics and transportation companies, Lynk, he said, fixed the tariff not on the basis of the distance travelled, but on the basis of the time taken to deliver the goods.
Time-based pricing
This was because the firm found that a lot of time was taken in loading and unloading the goods, which reduced the utilisation of the trucks.
“When we came up with this time-based pricing, the idea was the faster you load, the cheaper you get it. We have seen that we have been able to drive efficiency in the way customers behave,” Bhende added.
Consequently, the drivers were able to do more trips, earn more and thus stay on the platform. The drivers are paid on a per-kilometre basis, while the customers are charged based on time. The trucks on the platform are in the 750 kg to 1.5 tonnes payload capacity.
Ramco Group and the promoter family together have invested Rs. 20 crore in the venture. Over the next 12-18 months, Raja says, they plan to expand Lynk to all the major cities in the country. “Our vision is not just in trucks, but to ensure that anything that moves within a city, moves through Lynk. In the long run, we don’t have to confine ourselves to just one asset class of trucks; we may get into bikes or even larger trucks.”
Lynk is in discussions with a few venture-capital firms and others for raising funds for the planned expansion.