Startups breathe life into transportation firms in currency collapse
According to estimates, the trucking business (largely dependent on cash) is down by 50%, as lack of cash in the country makes it difficult to service vehicles, buy spare parts, eat food while on road, or even fix a flat tyre. Outside Delhi alone, HT reported that more than two lakh trucks are stranded. Long queues at banks and ATMs haven’t helped much.business Updated: Nov 18, 2016 11:10 IST
The $300 billion logistics and trucking business is hit by the nation-wide cash crunch as the Narendra Modi’s demonetization drive – forcing transportation companies to get closer to truck aggregating and owning startups.
According to estimates, the trucking business (largely dependent on cash) is down by 50%, as lack of cash in the country makes it difficult to service vehicles, buy spare parts, eat food while on road, or even fix a flat tyre. Outside Delhi alone, HT reported that more than two lakh trucks are stranded. Long queues at banks and ATMs haven’t helped much.
“Truck owners can refill the tanks, but they are not getting money for other expenses… There will be a huge shortage of products… Perishable items, which need to reach the destination in two to three days are getting spoilt,” said Lokesh Gupta, co-founder of Load 24x7 – an online listing company of truckers, which has more than 5,00,000 trucks on its platform.
Gupta said that his company is helping truckers to digitize payments and adopt digital payments for both taking money, and make purchases.
For the first two days the problem wasn’t much, as there was cash. “But now it has started impacted the trade economy,” said Rajesh Yabaji, co-founder of BlackBuck, an Uber-like service for trucks, and matches demand and supply.
Truckers on the platform are relatively better as BlackBuck has always made done electronic payments to truckers. It has provided drivers on the platform with fleet cards, like credit cards, which can be used at fuel stations to buy fuel, and it has also gone ahead with a partnership with Dhanlaxmi Bank to enable electronic money payments at tolls. It also transfers the money to the truckers bank accounts. These cards can be connected to the bank accounts and be recharged online.
The impact is higher within cities. Porter, the aggregator of light-commercial vehicles, has introduced Paytm wallet like Uber did. “The wallet usage has gone up four to five times…,” said Pranav Goel, co-founder of Porter.
Porter, like BlackBuck aggregates demand of logistics in the city, and helps in more efficient fleet management. As the wallet usage goes up, and more people get on to apps Porter-like apps, Goel said that it will digitize the trucking business in the country.