Professional Documents
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Business Model 1
Business Model 1
Business Model 1
DHULIKHEL, KAVRE
Aayush Gurung(17)
Sailesh Mishra(29)
Ride-sharing platforms have not only provided an opportunity for riders to make money and commuters
hassle-free travel, they have provided an alternative to urban public transportation. Hamro Wagon aims to
be a prominent ride sharing and platform business. The app seeks to be a logistics service provider with
on-demand motorcycle and car ride and rent. With the upsurge use of smart phones, the advent of app
stores and the desire of on-demand work prognosticate the growth of the app and probably will create an
entirely new standard of consumer convenience. The Hamro Wagon has 2 groups of customers. It has
passengers and it has drivers. On one hand, the company provides rental, ride-sharing, food delivery and
courier services. To the other side of the coin, the company helps people who want to earn from their
unused vehicles by putting them to rent and also to the riders who want to earn part time or full time.
Hamro Wagon provides the platform to everyone who want to serve and also to the customers by
providing the services in very affordable and cheaper prices, yet full of quality.
One of Hamro Wagon’s goals is to reduce the need for individual vehicle ownership, thereby reducing
congestion in cities. Hamro Wagon’s key focus is to provide dependable and readily available transportation
service.
The marketing strategy of Hamro Wagon includes user referrals, promo codes, promotions, user experience,
loyalty and partnerships along with segmentation, targeting and positioning of the target market and the
services. Also, the pricing and advertisement and promotion will play the vital role in the thriving of Hamro
Wagon in the industry.
Various analysis like SWOT analysis, Competitive Profile Matrix, Porter’s five forces model and 7P’s of
marketing mix of Hamro Wagon is done to determine the position the company holds in the market and the
competitive edge it has over its core competitors.
The target mar ket of Hamr o Wagon consists of mostly young generation users who are adapt
with latest technology and are familiar with smart phones and the app features. Students, service
holders, and guardians use these s er vices on a r egular basis to travel fr om home to wor k, or
the other way ar ound. T he tar get mar ket also inclu des the p eop le who want to enjoy a
vacation with a gr oup of fr iends but do not have their p er sonal vehicle. Als o,
r estaur ants willing t o put for war d their business to a lar ger communit y also have th e
oppor tunity thr ou gh the app.
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According to the Department of Foreign Employment, the international demand for Nepali labor is
projected as many as 1.2 million jobs available in 27 countries. In 2019, the service sector accounted for
19.86 percent of total employment in the country, which had increased from 14.91 percent in 1991.
However, that sector fell to 14.3 percent of employment from 1991 to 2001 and then increased by only
2.56 percentage points from 2001 to 2011. From 1991 to 2019, the share of females in service sector
employment has almost doubled, from 8.17 in 1991 to 16.99 percent in 2019. On the other hand, male
employment in the sector has only increased to 23.48 percent, which was only a rise of 2.36 percentage
points since 1991.
The company will build a competitive advantage through efficient customer service, affordable prices and
add-on services. The alliance of restaurants, re-condition houses and customer retention through service
excellence, focusing on profit of the company and the customers will be advantage of the company. We
will also continually check in with clients and with the guards sent to client sites to learn about the
challenges they are facing.
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2. VISION AND MISSION STATEMENT:
2.1 MISSION STATEMENT:
The mission statement of Hamro Wagon is “Affordable Transportation as reliable as personal for
everyone”. In a precise way, this statement draws attention to what the company is all about-treating the
customers to memorable and alleviated. The following components can be linked to our mission
statement:
Hamro Wagon recognizes the unprecedented challenges faced by the contemporary communities as
enshrined in this component of its mission statement. To leave an impact while addressing these
issues, the company strives to promote the right application of technology alongside good partnership
to create an environment that promotes both individual and communal thriving.
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there. To be in motion is the core thing to go ahead. If the nation gets stuck, we will lag behind. We
are trying to keep the nation in motion means nobody is lagging behind and wasting time to go to a
destination because of traffic jam and vehicle crisis.
Ride-sharing platforms have become popular in a comparatively short time. They have not only brought
about a significant change in the modality of urban public transportation but have also offered an
opportunity to the riders to make a decent income at their convenience. These platforms are, however, yet
to be regulated and address safety concerns raised at times by the stakeholders. Considering the
drawbacks of the giants of the industry like Pathao and Tootle, Hamro Wagon is careful about the
dissatisfaction of the customers towards them. Also, the rental feature is completely new to the industry
which creates a wide opportunity for the people to rent vehicles as per their convenience. This feature is a
add-on to the wide services Hamro Wagon aims to provide.
All-embracing the features and the opportunities the industry provides, Hamro Wagon has a lofty aptitude
in the industry.
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Above Five Forces Matrix depict that the venture we’re pressing with has very high rivalry among the
companies competing in the industry while bargaining power of the users are very null which might be a
high threat to the venture. Since the weighted score of 25 means very attractive business module and the
weighted score of 125 means very unattractive business module, the weighted score of ‘HAMRO
WAGON’ as 47 is up to the scratch.
Pathao and Tootle and other rideshare drivers set their own hours and can work as much or as little as
they want, local laws permitting. Hence, drivers' take-home pay depends on how much they drive. Drivers
keep the majority of each fare, and the rest goes to the rideshare company. Most rideshare companies
collect a commission as well as a booking fee. The Tootle had not charged commission with the riders
since the last 1.5 years however they have recently started charging only 10% commission now. Pathao
charges 20% commission with the drivers so in order to balance the driver’s cut, their fare is relatively on
the higher side compared to tootle. Looking into its fare policy, EDDYCAB demands an extra Rs. 16.95
which includes VAT of 13% i.e., 1.95 while the remaining amount goes to EDDYCAB’S pocket.
According to its website, an average Pathao driver can earn up-to Rs.40000 per month which is a decent
amount of money. And for an average Tootle driver can earn upto Rs1000-1500 per day. Obviously, the
income depends upon the distance traveled and the number of rides given. With hundreds of riders and
drivers waiting for the service in day-to-day life, we can say the company earns profit depending upon the
commission it takes and the quality of services it gives.
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3.4 GOALS AND IMMEDIATE OBJECTIVES:
All of us have come across terrible times at least once in our life where we have to make our way to an
event, meeting, gathering or exam but are in need of immediate means of transport. In order to overcome
such an issue ride sharing apps happen to be an amazing solution. It offers quick, reasonable, user-
friendly and convenient transport services.
3.4.1 Goals:
One of Hamro Wagon’s goals is to reduce the need for individual vehicle ownership, thereby reducing
congestion in cities. A lot of the conversation of the goals of Hamro Wagon is focused on making
transportation safe, equitable and affordable across multiple modes. Those modes include ride-hailing,
vehicle rentals, public transportation and more. The introduction of Hamro Wagon in the compact crowded
cities like Kathmandu is itself a goal towards feasible, affordable and safer approach to ride sharing and
rental industry. Hamro Wagon’s goal is to continually expand globally and bring its services to different
cities to allow riders and drivers to connect.
Hamro Wagon’s key focus is to provide dependable and readily available transportation
service.
To take over the cab and ride sharing industry by being the most cheap, easy ride all over the
nation.
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4. BUSINESS STRATEGY
Hamro Wagon aims to be a prominent ride sharing and platform business. The app seeks to be a logistics
service provider with on-demand motorcycle and car ride and rent. With the upsurge use of smart phones,
the advent of app stores and the desire of on-demand work prognosticate the growth of the app and
probably will create an entirely new standard of consumer convenience.
a. Drivers:
The drivers are on the supply side of Hamro Wagon and they can join or leave at a moment’s
notice. It is essential to have a sufficient number of them to be able to provide the customer
proposition (timely pick-up at low cost). They bring their own cars and bikes into the value
proposition for which Hamro Wagon does not have to outlay any capital costs.
b. Restaurants:
Like drivers, restaurants are essential and can join or leave at a moment’s notice. They can multi-
home using one of the many competitor meal-delivery offers. It’s an ambivalent space due to the
high commission that Hamro Wagon aims to take. The importance of Hamro Wagon Eats can be
highlighted mainly during the covid crisis when people are frantic to go outside to enjoy the
foods.
c. Technology Partners:
Generally, two types of technologies are to be exerted. The first are tech partners offering
leading-edge, proprietary technology that is essential to the value proposition. Uniqueness is
always temporary as it will be copied at some stage if successful. It still makes it unique if it plays
an important role. The second includes technology that is relatively widely available and/or non-
essential to the uniqueness of the value proposition (even if leading-edge), this includes things
like maps, GPS, payment, Cloud services, the elements of the tech stack, etc.
d. Community:
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There are state-level legislators affecting different types of laws that Hamro Wagon will be
dependent on. There are federal-level regulators for aspects of road-safety, etc. The barriers can
come from different directions. Cities / communities have become key partners. Additionally, I
have added them under the list of stakeholders within the customer relationships. This makes
sense because in the system of cities there are some stakeholders which are essential partners.
e. Commercial Partners:
Hamro Wagon partners with a multitude of corporate and commercial partners such as re-
condition houses. These types of partnerships differ and have different purposes, ease pick-
up/drop-off, creating new channels to local markets, increasing loyalty and more.
f. Investors:
Investors/venture capitalists bring the initial rounds of funding to the table. The funding helps us
to develop the functionality, apps, algorithms, their R&D, but is also used for customer
acquisition costs and other expenses. Initially, only us five group members will be investing to
the venture we chose.
g. Lobbyists:
Lobbyists are more important at the earlier stages of the company in that there is an (albeit
unlikely) risk of being banned or significantly curtailed. Lobbying work continues on a number of
fronts (including the employment status of drivers and future innovations, AVs and eVTOLS,
etc).
Other partners involved in the non-core value proposition or supporting activities are:
From a platform business model perspective, most of these activities can also be categorized into
reductions of search, transaction / post-transaction costs as well as enhancing positive network
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effects while reducing negative ones. Few of the examples of the key activities of the app are enlisted
below:
a. Remove friction (search costs) from all interactions. This includes the many improvements
around pick-up points, e.g. location accuracy, spotlight and many other (non-technological)
ways
b. Remove negative experiences (transaction costs), e.g. bad behaviours / safety needs on both
sides (rider and driver), e.g. through rating and other measures
c. Reduce safety risks which often come with the risk of negative coverage and can add to
regulatory concerns
d. Improve the technical lead on the proprietary technologies
e. Improve the App as well as the involved processes based on user feedback
f. Keep participants engaged and stimulate ongoing participation. This can include external
stimuli, such as providing rewards, promotions, notifications, etc.
g. Scale driver and customer side (in existing cities) to reduce idle times for drivers and waiting
times for riders. This also includes keeping both sides in balance. One (unpopular) way of doing
so is surge pricing
h. Expand and grow into more cities and countries (more on the growth strategies in the premium
resources)
i. Continue improving the value proposition, e.g. cheaper rides for regular commuters.
j. Develop new products: Hamro Wagon Eats, Hamro Wagon Rents and many other specific
value proposition related to Rides, Rents and Eats
k. Add complementary value propositions (e.g. car financing, new customer segments, etc)
l. Develop, add to and refine the loyalty / rewards programs
m. Reduce churn on driver and rider side
n. Analyse the data to fine-tune everything.
The most important assets of the platform business model are its network effects. It is the
resource/asset that needs to be built and the nurtured. The data, the algorithms and the capability to
analyze and gain insights are essential. The latter also grows with the size of the network. Hamro
Wagon mainly has three key resources without which the whole thing falls apart. First, it has a
platform which connects Hamro Wagon to drivers and passengers and both to each other. Pricing
algorithms are to be used to balance supply and demand in the market. It also helps ensure that there
is always enough capacity available to meet demand – fulfilling its core value proposition. The
Routing algorithm will focus on ensuring that the customer wait time is as short as possible. By
implication, it reduces the deadhead time for drivers as they’re either waiting for or driving to a new
job.
However, positive network effects can be diminished by negative customer relationships. Some of the
key assets of the business model are:
a. Network effects between the participants (drivers and riders) are essential and Hamro Wagon
keeps on pointing this out in all investor briefings
b. Active users and drivers
c. Data assets: Captured user data and other data (external)
d. Algorithms, technologies, analytic capabilities and more
e. Skilled engineering & other staff, including local staff
f. Digital assets:
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The driver section
The passenger section
The Hamro Rent section
The Hamro Wagon Eats section for customers
The Hamro Wagon Eats section for restaurants
Hamro Wagon is to be a multi-sided platform and as such it has to have a value proposition to both
sides, the riders as well as the drivers. For riders, the value propositions are that it to “always get the
ride you want”. For drivers, it’s the promise of “opportunity” to set one’s own hours, track earnings
(in real-time), ability to get support and more.
The value propositions fall into the category of search and transaction cost savings relative to other
personal transport options.
a. Custom ride: the “exact ride” that the user needs (i.e. pick-up and drop-off point without
transit on either side)
b. On-demand from the App, no need to schedule a pre-order (though possible). Uber aims to
provide reliable rides in that people don’t have to plan trips ahead of time
c. The App gives you estimated pick-up, duration and ETA of the ride
d. Affordability: typically lower prices than a comparable taxi ride (exception: surge pricing);
an estimated fare is provided prior to the ride
e. Ease and convenience: removing friction from all interactions to the extent possible, e.g.
Fast pick-ups (often 3-5 mins) and tracking the driver arriving
Choice in terms of vehicle type (economy, premium, etc)
No need to tell the driver the destination or route
Cashless transactions (exceptions exist)
a. Income generation and low idle times due to the large amount of active riders
b. Flexible and predictable work hours as well as self-determined shift durations (at least in
theory – the actual incentive system can lead to other behaviours)
c. Tracking one’s earnings (in real-time) and ability generate immediate earnings and ability
to get paid out frequently.
d. 24/7 support: ability to contact Hamro Wagon anytime, e.g. in the case of issues with a rider
as well as providing a rider rating
e. No boss (other than algorithms, I guess)
f. The driver app that helps with navigation, alerts, planning, earnings, etc
g. Ease of joining: requirements to join can be met by most driver car-owners (mainly:
identification, background check, vehicle inspection, 4-door car)
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h. No upfront investment in joining (pre-existing car or ability to source through a vehicle
marketplace for those who want to ride but have no car
i. Ability to earn above average in peak demand (the driver app shows surge areas) – often
weekend nights
j. Driver rewards program: progressive rewards based on work hours, etc
k. Ability to get customers (passengers) at no cost to the driver
l. Insurance coverage through Hamro Wagon during the ride (drivers still need to show they
are insured at other times)
m. Lesser skills required than taxi drivers (i.e. no need to know most of the streets of the city as
you can “let the app lead the way”) but sometimes that is also obvious to the rider.
The Hamro Wagon business model has 2 groups of customers. It has passengers and it has drivers. In
a traditional taxi business model canvas, the customer segment is purely passengers and drivers are
part of the company. What distinguishes Hamro Wagon’s passengers from traditional taxi passengers
most is they need a smartphone and a credit or debit card. Without these, they can’t use the platform.
Hamro Wagon’s other customer segment are drivers. Instead of employing drivers and having an
asset-heavy company, the app aims to use freelance driver – which brings many legal battles
worldwide.
As a to-be multi-sided platform business, Hamro Wagon will benefit from segmenting both sides: the
riders as well as the drivers. Depending on the purpose, the app will likely use classic market
segmentation as well as micro segmentation.
a. Rider Segmentation:
Geographic:
o Home location, destinations and frequent destinations, user location tracking
o Urban / rural
Demographic:
o Age / age range
o Gender
o Life-cycle: Bachelor, newly wed, empty/full nest, solitary, etc
o Occupation: student, employee, professional, retired, handicapped
Behavioral:
o Loyalty: switchers, soft/hard loyal
o Benefits sought: cost efficiency, sense of achievement, convenience
o Personality: Easy going, determined, ambitious
o User status: Non-user, potential user, first-time user, regular user
Psychographic:
o Social class: Struggler, mainstreamer, explorer, reformer, aspirer, succeeder, resigne
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b. Driver Segmentation:
Here are some categories that drivers could be segmented in. Again, the details of what Hamro
Wagon would use for which purpose remain confidential internal data. Here some plausible
examples:
Demographic: age, socio-economic status, family status, residency status / visa type
Geographic: by city, suburb
Geo-demographic: see above example
Behavioural: preferred work hours & patterns
Occupation: whether or not the driver has another occupation and what type of occupation
and education
Pro level: full-time driver with previous driving occupation or other
Offering part-time vs full-time job (>30h/week), etc.
4.1.6 Channels:
Channels for the initial awareness and customer acquisition can be:
a. Word of mouth is often said to be a strong driver, it may follow the typical innovation
adoption curve starting with early adopters
b. Free media coverage based on the novelty factor.
c. Campaigns: free vouchers when Uber enters a new city (e.g. handed out at public transport
stations or simply through discounts in the App)
d. Social media and virality
Youtube
Twitter
Facebook
LinkedIn
Pinterest
e. Digital ad campaigns through Google Ads and social media
f. App stores (iOS, Android) – through high ratings, ads and being featured.
a. Most transactions to be managed through the app, including ordering but also all other
aspects, including help, issues, etc
b. The webpage to allow for sign-up and address the biggest obstacles to joining (the process of
joining, how it works, any safety concerns and the collaboration with cities/communities –
see above)
c. Hamro Wagon’s help pages
d. Hamro Wagon to use emails & notifications to engage, stimulate participation;
reinvigorate/recover (special offers, reminders, etc)
e. One of the best visible customer relations channel can be Hamro Wagon’s Facebook page
with an almost instant response to most direct queries, remarkable (check for yourself)
f. Tiered customer support channels (via Zendesk)
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Automate customer support for high-volume, low severity issues (e.g. forgotten
items) to be rapid
Multi-tiered customer support (ability to contact a human) for more severe issues.
g. Also, transactions can be done after the ride has been taken.
There are important layers of relationships that Hamro Wagon needs to foster. Some of the most
important include their relationships to (1) the riders; (2) the drivers; (3) cities / communities and the
broader stakeholder environment around them; and (4) legislators / regulators. The relationships we
need to maintain are elucidated below:
a. Relationship to riders:
Manage safety risks.
Manage bad behaviors (on both sides: drivers and passengers) and improve rules
continuously.
Deal with customer issues in an appropriate manner and timelines.
Transparent pricing
Transparency around privacy
Portray the desired company image through social and other media.
b. Relationship to drivers:
The relationships to the driver will be mainly defined by what the platform does for them.
But it’s not clear cut because of the different types of drivers. Casual drivers with another
main job will care about the hourly wage more than anything else. Full-time drivers who
will use their car predominantly to drive for will look at the wider package of pay and
entitlements. The employment status (“partner” vs “employee”) matters for a subset of
drivers.
The image in the wider public is also important. It can affect demand as well as the
opinion of the legislators. One of the prevailing items is the status of the workers which
can drive significant changes to Hamro Wagon’s business model. We aim to drive public
relations by portraying a positive image, which will drive positive contribution to the
communities.
4.1.8 Revenue:
Revenue in Hamro Wagon’s business model is pretty simple. Hamro Wagon will move the traditional
taxi meter from the car to its servers – tracking via GPS technology on the phone – and then charges
the passenger based on the miles travelled and whatever surge multiplier is in effect. If the passenger
uses the renting facility, the pricing will be done regarding the re-condition houses cost.
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Hamro Wagon aims to charge a 25% service fee on all rides. Hamro Wagon’s business model will
not work if their rides were not considerably cheaper than a taxi ride such that even with the addition
of the Hamro Wagon commission it still remains noticeably cheaper than the comparable taxi ride.
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o Both taxis and Hamro Wagon drivers have much of the same costs, such as petrol,
insurance, servicing, cleaning, tires, general wear and tear, phone. It seems in some
countries, taxi drivers have higher insurance costs due to regulation
o One could argue that these costs are lower on a revenue generation basis because Hamro
Wagon vehicles will be better utilized (hence don’t drive around empty, yet consuming
fuel and generating wear & tear)
o Let’s still assume that, by and large, these input costs are quite similar for Hamro Wagon
and taxis
Employee entitlements:
o Hamro Wagon engages drivers as contractors. Thus, they do not accrue annual/sick leave,
nor do they contribute to social security, pensions or other entitlement
o There are some savings here compared to taxi companies. But there are vast differences
between countries what taxi drivers are entitled to
o This is obviously one of the most contentious aspects of the Hamro Wagon business
model. But it is not black and white as it is often portrayed. Neither is this discussion is
not limited to Hamro Wagon. We have covered this in more detail here. In any case,
Hamro Wagon is trialing affordable sickness, injury, life insurance partnerships for their
drivers
o I believe that casual drivers will be more interested in maximizing short-term cash flow
because they see driving for Hamro Wagon as temporary. Permanent full-time drivers
may have a different view.
o Certainly, some cost savings here for Hamro Wagon but it’s not clear how much
Taxes:
o There are some interesting points here
o Most interestingly, it seems in many countries Hamro Wagon drivers can claim mileage
(i.e. tax deductions for business-related kilometres), here: US and here Australia
o This can tip the comparison considerably. Let’s do a high-level calculation. Let’s say one
can travel at 20m/h (yes, miles) in city traffic (this should be an ok estimate for many
cities). Now, let’s say the driver is utilised 75% of the time. This makes 15m per hour.
The standard IRS mileage deduction is $0.52c/m. This calculates to $7.8 per hour. Now,
let’s assume the driver net wage per hour is $18/h (this is at the high-end – remember
some say it’s closer to $10/h). Even at the high end ($18/h), some 43% of net income
comes from tax deductions (I’m sure you can calculate this percentage for the case of
$10/h). I.e. taxpayers foot a considerable amount of this
o One can see that this is contentious. Sure, taxis get the same tax break. But taxis
companies are fully based in the country that they get the tax break in. Thus, the money
stays in the local economy (country level view). Hamro Wagon will say that the
consumer will benefit in terms of lower costs for the ride. It will remain contentious until
a productivity commission looks into this
o Both Hamro Wagon drivers and taxis pay GST and some other taxes
o From a cost base perspective, taxis and Hamro Wagon drivers appear to be on a similar
footing with the big caveat of mileage needing a more detailed analysis
Economies of scale:
o One of the potentially most interesting cost savings comes from Hamro Wagon’s ability
to achieve better prices for their drivers’ input costs.
fuel (here the Australian example),
maintenance,
insurance,
phone and
many other things
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o Hamro Wagon staggers the benefits depending on the activity of the drivers. Those that
drive more can achieve more savings. There are discount levels from bronze to platinum.
o Note that some of the 3rd party discounts are also available to the provider’s retail base,
e.g. their loyalty members. In some cases, the Hamro Wagon-obtained discount may be
higher or the driver can join the program without membership fees or incurring other
expenses to get the discounts. It is definitely an economic benefit for drivers and a
strengthening of Hamro Wagon’s business model in that scale can lead to lower unit cost.
For many online platforms, the biggest cost element is customer acquisition costs (CAC). There will
be huge costs for platform development, hosting etc. There will be salaries for the software engineers,
the sales, and marketing teams and the country and city managers. And then there will be the driver
payments. Hamro Wagon gets paid up-front, keeping the money before paying drivers each week to
ensure that the payments are valid.
The company’s ability to thrive in the transportation’s industry can be scrutinized by SWOT analysis.
SWOT analysis contributes us for finding out what the strength and weaknesses of Hamro Wagon are.
Strengths and weaknesses are internal factors. Hamro Wagon has control over these elements.
Opportunities and weaknesses are the external factors in SWOT. Hamro Wagon does not have any control
over these. However, it must take measures to exploit opportunities and avoid the threats. We have added
the SWOT analysis of Hamro Wagon below:
4.2.1 Strengths:
Strengths describe what an organization excels at and what separates it from the competition: a strong
brand, loyal customer base, a strong balance sheet, unique technology, and so on. The potential strengths
of Hamro Wagon are sorted as:
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Dual rating system boosts trust and safety.
The system is convenient for the drivers. They can work flexible hours and even choose to be
a part-time employee. Drivers can also reject unwanted clients.
The prices are lower compared to traditional taxi operators.
People can rent the vehicles as per their convenience.
Hamro Wagon also offers the food delivery services at the doorbell.
4.2.2 Weaknesses:
Weaknesses stop an organization from performing at its optimum level. They are areas where the business
needs to improve to remain competitive: a weak brand, higher-than-average turnover, high levels of debt,
an inadequate supply chain, or lack of capital. The probable weaknesses Hamro Wagon will face and
needs to work on are enlisted below:
The idea can be easily imitated. Nothing will prevent competition from presenting the same
product.
The relationship between Hamro Wagon and the drivers is ethically questionable. It lacks the real
connection. So, it is expected that loyalty between Hamro Wagon and its drivers is quite low.
Also, company and its customers have no bonding. Incentive to remain with Hamro Wagon is
low.
Costs of operating vehicles are very high. But, the drivers do not earn so much.
Very Unpredictable business model.
There are privacy concerns. Hamro Wagon records where customer gets the vehicles from. It also
notes where he goes with it.
4.2.3 Opportunities:
Opportunities refer to favorable external factors that could give an organization a competitive advantage.
The possible opportunities the industry offers the venture can be listed as:
Customers are often dissatisfied with traditional cab companies because of high prices and long
waiting time.
It can exploit new and big markets in countries like Kathmandu where taxi services are
inconvenient and expensive.
Can tap growing markets in suburban areas where taxi services are not available.
Rise in number of Hamro Wagon drivers will reduce the Estimated Time of Arrival. This will
make Hamro Wagon more liked. The startup will get more revenue and drivers will be profited as
well.
Hamro Wagon can increase the valuation. This might appeal more investors. As a result, Hamro
Wagon will have more money to operate.
Cheaper electric cars can be used. It will reduce the cost and increase the driver’s profit margin.
Additional services like transporting older patients to hospital, transporting children to school and
transporting pets to the vet can be offered.
Renting vehicles through the app at feasible prices is a completely new and opportunistic venture.
4.2.4 Threats:
Threats refer to factors that have the potential to harm an organization. There are certain factors Hamro
Wagon needs to be aware of, that might cause threat to its life in the industry. They are listed below:
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Drivers who won’t happy with the low-profit margins. This might lead to bad publicity. This can
in turn discourage the new drivers from joining Hamro Wagon.
Problems with local authorities can lead to fines. It will also earn a bad PR.
Increasing competition will ultimately decrease prices. This will discourage drivers from joining
the startup in new markets. This will result in loss of customers. Hamro Wagon’s revenues will
decline.
As new markets and drivers are joining, fraud and scandals are also increasing. It is damaging for
the brand.
Overvaluation can lead to Overinvestment in locations where there is no room for businesses of a
similar type.
Communication of goals will help Hamro Wagon achieve goals by defining roles and
Purpose of the set objectives should be clearly discussed, and communicated with the
employees
This discussion should entail not only the objective, but also the time period within which it
Objectives should also include aspects of personal and individual growth and development of
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Different goals should be set for different departments of Hamro Wagon to help it achieve the
These departmental goals help in directing operations towards the larger strategic goal
attainment.
4.3.3 Training:
Employee training to develop skills needed and necessary for goal attainment
Training for Hamro Wagon should be continual and should be consistent with the goals set.
The performance appraisal at Hamro Wagon will help managers and supervisors keep track
The performance appraisal will also help keep the objectives time bound through regular
The performance appraisal will also help identify skills development aspects that employees
need and helps the managers develop suitable and needful strategic training programs for skill
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5. DESCRIPTION OF SERVICES
Hamro Wagon is a ride-hailing company that will offer the Hamro Wagon mobile app, which you can use
to submit a trip request that is automatically sent to a Hamro Wagon driver near to you, alerting the driver
to your location. The accepting Hamro Wagon driver will then come and pick you up and drive you to
your requested destination. The Hamro Wagon app will automatically figure out the navigational route for
the driver, calculates the distance and fare, and transfers the payment to the driver from your selected
payment method, without you having to say a word or grab your wallet. This concept is too common to be
unique in the ride sharing industry. What puts Hamro Wagon above its core competitors like Pathao and
Tootle is the propensity of people to rent the vehicles with or without driver from few hours to few days.
Also, the vehicles to be rented won’t only be bikes and cars, but also buses and other vehicles. The
services we aim to provide the people must go parallel with the concept of “Customer buy benefits, not
product or service features”.
The list of services Hamro Wagon aims to provide in the industry with their unique characteristic can be
explained below:
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order the food all time of the day. However, there are various apps on the market providing this feature.
So, the delivery time and the quality of the food will be the major factor deciding the choosing of Hamro
Wagon over its competitors.
With all these services in a single mobile app is itself a huge benefit for the customers. This app is an
epitome of all in one. Hamro Wagon will allow the customers to rent their private and personal vehicles
as per their use. All these features of the app made it fast and easy to hire a driver using a smartphone
from almost any location at any time. Instead of chasing down a taxi on a street, or calling and waiting for
a car service, e-hail app users can hail a car from any location and have it arrive in minutes. Hamro
Wagon will doesn't even need to ask the customers for an address. It knows where they are. Drivers for
Hamro Wagon and its competitors use their own cars, and they seem incentivized to keep them clean and
well-maintained. The cheapest options are late-model compacts, not junkers. The riders input their
destinations into the app, and the drivers use navigational software to get there. Wrong turns are unlikely.
Unprofessional drivers are weeded out because passengers get to rate the driver’s performance. A
consistently low rating will force a driver out of Hamro Wagon. Safety is an important advantage for
drivers working with Hamro Wagon. The riders using the service have registered their identities and their
credit card numbers on the app. They are not random strangers on the street. Rude, aggressive, and
disruptive passengers are weeded out because drivers rate their customers. Consistently low ratings or
reports of unsafe behavior toward drivers can cause the deactivation of an account. Another advantage of
utilizing Hamro Wagon services is that it is effectively accessible. Just by installing a straightforward
application and entering a couple of necessities, people can get the Hamro Wagon application downloaded
that permits the customers to demand a vehicle whenever you need. There is a wide scope of vehicles that
the riders can pick as per their prerequisite which includes buses, cabs, personal cars, trucks and so on.
These services are definitely going to give Hamro Wagon an edge over its competitors and probably will bat
an eye for the target market out there.
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6. MARKETING STRATEGY
‘HAMRO WAGON’ is an online-transportation app that aims to aid the people with affordable
transportation facility plus to assist in food delivery services. For the app to take its market in the industry
alongside its competitors: Pathao and Tootle, we must kingpin our focus into the marketing strategies.
Taxi cab and limousine services business is an easy to set up business especially if we have the finance to
acquire comfortable cars, attract drivers and the ability to run and manage a business. It means that the
possibility of Hamro Wagon driver businesses springing up where our company is located is high. We are
aware of this that is why we decided to come up with a business concept that will position us to become
the leader in the ride sharing industry.
We can confidently say that the strategic locations we intend covering, the Business model we will be
operating on, access to pool of partners and investors, ease of payment, wide range of highly reliable and
comfortable cars, highly trained and courteous drivers and of course our excellent customer service
culture will definitely serve as competitive advantage for Hamro Wagon.
Also, the marketing strategies to go hand in hand with the major marketing strategy can be described
below:
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6.2.1 User Experience:
Hamr o Wagon’s major aim has always been to be ver y user fr iendly and easy to use.
T he connection between the user and rider has to be always been professional and smooth. The map/GPS
on the app has to be very accurate and will have multiple options to add permanent locations which make
it easier for the user to add in locations if they are a regular user.
6.2.3 Referrals:
Early adopters will be able to take advantage of Hamro Wagon’s referral marketing program to give
friends free rides while earning credits themselves. This give money-get money program gave first-timers
a more concrete reason to try the service. Drivers will also get referral incentives, thereby making
acquisition on both the customer and “contractor” sides faster and easier.
6.2.5 Partnerships:
Hamro Wagon is planning to implement a number of partnerships to entice both first-time and loyal
customers to take a ride. The major partnership of Hamro Wagon will be with the re-condition houses for
the rental feature. Also, the partnerships with digital wallets such as e-sewa and Khalti are the decorative
factors to the company. Plus, the quality partnership with quality affordable restaurants for the Hamro
Wagon Eats section is a must for the Eats section to grow.
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objectives by providing its customers with value. The marketing mix refers to the set of actions, or tactics,
that a company uses to promote its brand or product in the market. It is the set of controllable, tactical
marketing tools that a company uses to produce a desired response from its target market. It consists of
everything that a company can do to influence demand for its product. It is also a tool to help marketing
planning and execution. Marketing strategy of ‘HAMRO WAGON’ aims to analyze the brand with
marketing mix strategy which covers the four P’s. There are four areas of marketing that contribute to the
marketing mix and are considered the four Ps of marketing. They are:
Product
Price
Place
Promotion
Each of these factors has its own variables, and once they are correctly defined, they give you an outline
for marketing of your product or service. They make up the business plan for a company and handled
right, can give it great success. Four P’s of mix marketing of ‘HAMRO WAGON’ can be chronicled as:
6.3.1 Product:
For developing a marketing mix, product strategy is very important for a company as it’s the core
property that satisfies the needs of the customers. ‘HAMRO WAGON’ is a service company and it does
not sell products. It has clear advantages over regular taxi. It is an online based platform that provides a
wide range of services in one app for its users. These include clear overview of pricing prior to booking,
one-tap rides, following drivers on map, cashless convenience and fare splitting, as well as feedback
options. The list of services we are planning to proffer to the public, which gives it a competitive edge
over its competitors are listed below:
Pool: Riders can bring one person with them, thus saving on travel costs.
Access: Taxi service with wheelchair access to carter to the need of elderly and people with
disabilities.
Bikes: Booking bike rides with or without riders.
Taxis: Booking car rides with or without driver.
Green: Sustainable rides in electric vehicles.
Rent: Different vehicles on rent for a certain period of time.
Transit: Real life public transit information in the app
Rush: Courier package service
Eats: Allows customer to order food on go.
Wallet: Allows customers to load money on the app using e-sewa or their bank accounts.
6.3.2 Price:
Price is the amount of money customer must pay in order to obtain the product or service. Marketers of
the app want to negotiate with the customers by offering discounts, trade-in-allowances and credit terms.
‘HAMRO WAGON’ pricing strategy can be described as geographical pricing. The cost of riding with
the app depends on three factors – a base rate, rate for estimated time and distance and the demand for
rides in that area. Moreover, Hamro Wagon pricing strategy can be classified as a dynamic pricing that is
based on the basic economic principle of demand and supply. The app aims to offer promotional ride
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schemes. Promo codes are distributed to the users, availing these codes resulted in discounts. The app also
provides a ride estimate, where the user can check before booking the cost of travel. This is called upfront
pricing. There are various payment options available for ‘HAMRO WAGON’ like using Wagon wallet,
money and even credit cards. This gives an insight in the marketing mix pricing strategy of app. Also,
penetration pricing can be a good way of luring the target customers to choose the app over its
competitors. Penetration pricing is setting the price low while entering the new markets, in order to attract
customers. Fare may also vary by location, the vehicle option we select and other factors such as time and
distance for the trip’s route.
6.3.3 Place:
Place means the company activity that make the product available to target customers. Anyone can
become a customer by downloading the app. ‘HAMRO WAGON’ connect places to the customer on
online media coverage as well as different channels by giving their locations and transportations. Initially,
the app is going to be launched around the Kathmandu valley. Depending upon the market the app
engulfs, the services will be available to other major cities as well.
6.3.4 Promotion:
Promotion means the activities that communicate the merits of the product and persuade target customers
to buy it. Dealership and sales people plays an important role here. The company is planning to rely
heavily on word of mouth publicity to gain market share. However, referral marketing and convincing
corporate clients into accepting free rides and services in the embryonic stage seems to be a must. Also,
localized marketing techniques like free chocolates on rides can also be used. Also, we are planning to
have strategic tie-ups with e-sewa and Khalti for manifesting the availability of ‘HAMRO WAGON’s
rides on their app. Plus, the satisfaction of everyone involved in our company is to be considered. For the
people to know about the service of the app, we are aiming to offer short-term and long-term partnerships
to virtually everyone and any business. Also, we want unsatisfied customers to complain about the facts
they are unsatisfied with.
Since this is a market servicing brand, here are the other three Ps to make it the 7Ps of marketing mix of
‘HAMRO WAGON’.
6.3.5 People:
‘HAMRO WAGON’, to-be services company in the can segment, acknowledges the importance of
people strategy in its marketing mix. The drivers are subjected to stringent background checks to ensure
that they put the right person for the job. Customer service has to be good as they know that people would
travel only when they have a good experience.
6.3.6 Processes:
‘HAMRO WAGON’ as a company should have several processes in place. The different stages involved
in availing a service on the app are:
Go to HAMRO WAGON app and turn on your device GPS (Location settings)
Check for the vehicles available and select the ride of your choice
Check for the vehicles available for the lend with or without driver
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Check for ride estimate, type of the vehicle and driver details, comments and
rating.
Book the ride and track the ride
Make payment through any of the preferred means of payment when you get
down.
HAMRO WAGON plans to use the latest technologies to track the position of its vehicles. Sometimes
drivers must even click selfies on the app provided Smart phones/tabs and confirm their identity when the
app conducts its random driver checks. Also, people willing to rent the vehicles have to upload their
citizenship or passport proofs on the ‘upload your identity’ section. Other processes involve payment to
drivers from the company, customer/driver service centre helplines etc.
The above segments conclude the ‘HAMRO WAGON’ marketing mix. Today’s consumers are more
empowered than ever, with greater expectations for brands to meet their requirements with relevant, easy-
to-use content, and to provide a product offering that meets expectations. This marketing mix breaks
down what’s needed to make the ‘HAMRO WAGON’ work, but success isn’t attributed only to modeling
theory templates like this one. It’s attributed to the depth of insights used to develop each stage.
Businesses that can deliver on what their consumers truly want, and showcase how their brand will enrich
their lives, will see the best results.
All the afore-mentioned 7Ps of Hamro Wagon Marketing Mix strategy focuses on what’s best for the
customer. It focuses on the feasible price range, on-time services, pre-eminent quality of the vehicles for
rent and also the riders giving ride and meticulous procedure for selecting the service the customers want.
All these facets of the app ensnare the customers into stipulating ‘HAMRO WAGON’ over its core
competitors. Thence, these 7Ps can be considered as unrivalled marketing mix strategy for pinpointing the
target market of the app.
The challenge is that most startup companies do not have the required money to pump into publicity and
advertising. Here are the platforms we intend leveraging on to promote and advertise Hamro Wagon;
Encourage our loyal customers (partners and drivers) to help us use Word of Mouth mode of
advertisement (referrals)
Advertise our business in relevant magazines, local newspaper, local TV and radio stations
Promote our business online via our official website
List our business on local directories (yellow pages)
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Sponsor relevant community programs
Leverage on the internet and social media platforms like; Instagram, Facebook, LinkedIn,
twitter, et al to promote our brand
Install our Billboards in strategic locations in and around Kathmandu Valley
Direct coupon mailing approach
Distribute our fliers and handbills in target areas in and around Kathmandu Valley.
Advertise our company in our official website and employ strategies that will help us pull
traffic to the site.
Ensure that all our staff members and drivers wear our branded shirts and all our taxis are
branded with our company logo.
7. COMPETITIVE ANALYSIS
Competitive advantage is the value proposition that sets a business apart from its competitors and gives it
a unique position in the market that is superior to the rivals. It is an aggregation of factors that allows the
productive entity to generate more sales or superior margins compared to its market rivals. Competitive
advantage delegates the businesses to outsell, out-profit and out-perform others in the same market and
same industry. A company builds a competitive edge on its core competencies, which are a unique set of
capabilities that a company develops in key operational areas, such as quality, service, innovation, team
building, flexibility, responsiveness, and others, that allow it to vault past competitors.
Considering the repercussion the venture will have on the plain sailing of rental facility for the users, its
beneficial impacts on the environment, the aptitude of earning own money by renting their ancillary
vehicles and the cut-price of the rent for the clientele, ‘HAMRO WAGON’ can be considered propitious
in the transportation rental industry. However, the success of any startup depends upon how much it is
insistent to its cut-throat rivals. In order to better understand the external environment and the competition
in a particular industry, Competitive Profile Matrix (CPM) is often used. The matrix identifies a venture’s
key competitors and compares them using industry’s critical success factors. The analysis also reveals
company’s relative strengths and weaknesses against its competitors, so a company would know, which
areas it should improve and, which areas to protect. It is a graphical representation of the most important
businesses in a given industry, giving a reasonably detailed overview of the competitive landscape.
As a strategic analysis tool, CPM provides several benefits to the company. In competitor analysis, detail
attention is given to each competitor’s apparent objectives, resources and competitive moves which lead a
company to readily identify the area of strengths and weaknesses of the competitors and this can be used
in the process of developing effective strategy. Through a comparative analysis of Key Success Factors
(KSFs) between a company and its major competitors CPM provides important internal strategic
information to managers and help them develop effective strategy for the company. The CPM of
‘HAMRO WAGON’ with its KSFs and its core competitors is shown in the table below:
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Table 2: Competitive Profile Matrix of Hamro Wagon with its competitors
Here: 1-Major Weakness, 2-Minor Weakness, 3-Minor Strength, 4-Major strength. This table portrays the
competitive scenarios of ‘HAMRO WAGON’ and its competitors in the industry. From this table, it is
found that ‘HAMRO WAGON’ scores better (strengths) in innovation and price competency, and
assumes minor strength in customer service and in technological competence. Albeit, ‘HAMRO
WAGON’ has minor weakness in management competency and also minor weakness is in brand name.
As a whole, its total score is 3.55 and on the other hand, its competitor ‘PATHAO’s and ‘TOOTLE’s total
scores are 3.45, and 3.15 respectively. From this competitive profile matrix, it is revealed that ‘HAMRO
WAGON’ enjoys more competitive advantages by 0.10 than ‘PATHAO’ while ‘TOOTLE’ is lagging
behind by 0.40.
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8. MANAGEMENT TEAM
8.1 STRUCTURE OF THE COMPANY:
For any company to run smoothly, it needs a properly structured group of people to run the company.
Since our group is of 5 students, we have planned the company to be structured of Chief Executive
Officer and four other to be working under his guidance. Chief Executive Officer with the approval of
board of directors will create the vision and strategy of the company and responsible for the overall
activities of the company. Chief Marketing Officer will be responsible for marketing, sales, and ongoing
client service. Chief legal officer will deal with the legal issues. The Chief Operations Officer will run the
day to day operations of the company. He will manage human resources too. Chief Finance officer looks
after finances/accounting and prepares financial reports.
Since we are just a group of undergraduates with a minimal knowledge of accounts, legal regulations,
human resources and marketing, we will be hiring employees under these four managerial heads. At the
inception of the company, only minimal and statutory employees will be hired.
Fig below shows the structure of personnel we planned for our company:
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8.2.1 Chief Executive Officer:
CEO of the company manages and leads the company. So, the officer must be dependable and qualified
enough to lead the company towards success. An MBA or equivalent degree in management and
preferably retired colonel with management experience person is required for the post.
Since we are just undergraduates, we will be designing the app with the help of software developers.
Initially, the budget won’t be more than enough besides building the app and mere marketing in social
media and digital marketing. So, our group will be handling each of the four managerial heads with one of
us being the CEO of the company for the starting year. Also the legal procedure for the app is completely
out of our knowledge, we will be requiring an expert for the matter as mentioned above.
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company’s CEO and the leaders. Since we are undergraduates with a little knowledge of the
entrepreneurial journey, we will be asking our course instructor Mr. Bibhu Ratna Tuladhar, Asst.
Professor of Department of Management Informatics and Communication of Kathmandu University.
Also, we will be seeking assists from Mr. Niranjan Poudel, co-founder of Green Road Waste
Management for the struggles to be faced by an undergraduate in this entrepreneurial journey.
9. PLAN OF OPERATION
9.1 SERVICE SPECIFICATION:
The company will provide ride-sharing services, rental features which are completely new in the market,
courier services plus food delivery services at doormat. These services are affordable and cheaper than its
competitors in the market plus the quality will be taken into consideration along with cheaper services.
9.3 LOCATION:
In the first instance, Hamro Wagon will be providing its services around the Kathmandu Valley only as
the density and the intensity of the people living here is huge. So, it sounds perfect for the ride sharing
business like ours to be started within the valley. Also, due to the location of the capital of the country,
people from across the nation are in the capital for better income and life style. These give a plus point to
the availability of massive number of customers for the services we provide and Kathmandu Valley is the
hub of the target market our company aims to lure.
In short, the provision of services involves transforming or converting inputs into outputs. Various inputs
such as capital, labor, technology and information are used to provide services using one or more
transformation processes. To ensure that the desired outputs are obtained, physical interaction of the
driver and riders, plus drivers and service takers ensures that. The company also takes various
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measurements in various points in the transformation process (feedback) and then compares them with
previously established standards to determine whether corrective action is needed (control). The
following figure depicts the conversion system.
Fig below shows the transformation process of the services of Hamro Wagon.
The terms for the use of services of ride sharing and rental services of Hamro Wagon can be enlisted
below:
You represent and warrant that you are an individual legally entitled to enter into a binding agreement
under the laws of Nepal, in particular the Terms of Use, to use the Application as a driver that you are
at least 16 years old and a legal driving license holder. Also, you ensure that all the legal documents
require to become a legal driver (bluebook and license) are timely renewed. Otherwise, we will be
entitled by law to cancel any agreement entered into with you. You further represent and warrant that
you have the right, authority and capacity to use the Service and to abide by the Terms of Use.
We collect and process your personal information, such as your name, e-mail address, mobile
telephone number and few other legal documents when you sign up. You must provide accurate and
complete information, keep the information up to date and agree to provide us whatever proof of
identity we may reasonably ask for. If any of the personal information that you have provided to us
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changes, for example, if you change your telephone number, or if you wish to cancel your account,
please update your details by sending your request to us. We will, to the best of our abilities, effect
such changes as requested within fifteen (15) business days of receipt of the notice of the change.
You can only use the Application once you have signed up with it. Upon successfully signing up, the
Application will provide you with a personal account that can be accessed with a password you
choose.
Only you may use your own account and you undertake not to authorize others to use your identity or
account. You may not assign or otherwise transfer your account to any other parties. You must keep
your account password and any identification we provide you secure and confidential.
If you are a driver, you understand that by turning on your GPS, you are providing us the information
of your current location that we might share to the client at the time of letting them know your arrival
status.
You may only have one Hamro Wagon account.
The information provided by the Application must not be construed as an advice or an offer; the
decision to use the Service Provider is entirely yours. You are free to use any other service providers.
You undertake that you will use the Application only for its intended use to obtain the Service. You
may not abuse or use the Application for fraudulent purposes or to cause any inconvenience to others
or to make fake bookings.
For the renting of the vehicles, you have to upload your citizenship or passport for the verification
and also 50% of the renting fare should be pre-paid corresponding to the time selected by you.
With respect to your use of the Hamro Wagon Platform and your participation in the services, you
agree that you will not:
o impersonate any person or entity;
o stalk, threaten, or otherwise harass any person;
o contact with the partner or the client after the ride is complete.
Since our company will be registered with the Office of the Company registrar and not with the
department of Transportation as the company isn’t a public transportation company. But, the Department
of Transportation has been saying time and again that it is illegal to use private vehicles to pick up
passengers as mentioned in articles 8 (1) and 12 of the Motor Vehicles and Transport Management Act,
1993. Owing to the Motor Vehicles and Transport Management Act, the government has urged the ride
sharing companies to stop this service many times. Meanwhile, the Bagmati provincial government has
introduced legal provisions that allow private vehicles to operate for public purposes in the specified areas
by taking a fixed fare. After the implementation of the 2015 constitution, the right of transport
management has shifted from centre to provincial governments.
The Department of Transport Management has introduced a new law on Nepali New Year 2076 (April
14, 2019) to govern and regulate ride-sharing services operating in Kathmandu. The inclusion of blanket
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insurance for the drivers working for the services of Hamro Wagon seems to be the icing to this
regulation.
10. REFERENCES
The sources of the information needed for the information of preparing the business model of Hamro
Wagon are cited below:
https://thekeep.eiu.edu/cgi/viewcontent.cgi?article=5838&context=theses
https://www.uber.com/in/en/
https://pathao.com/np/
https://tootle.today/
https://www.lawcommission.gov.np/np/
Pdf: Essentials of Entrepreneurship and Small Business Management
https://www.denis-oakley.com/uber-business-model-canvas-
success/#:~:text=The%20Uber%20business%20model%20has,are%20part%20of%20the%20com
pany.&text=Uber's%20other%20customer%20segment%20are%20drivers.
https://www.telecomkhabar.com/2019/09/tootle-vs-pathao-pros-cons-rider-user/
https://www.molocoads.com/en/blog/uber-marketing-strategy
https://www.smartinsights.com/marketing-planning/marketing-models/how-to-use-the-7ps-
marketing-mix/
https://research-methodology.net/uber-segmentation-targeting-and-positioning/
https://www.lawcommission.gov.np/np/
https://fourweekmba.com/uber-business-model/
https://www.lawimperial.com/company-registration-in-nepal/
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