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India’s taxi king transforms transport landscape

The rickety black-and-yellow taxis and auto rickshaws are long-standing icons of India's chaotic streets – but Neeraj Gupta, managing director of the country's largest radio cab service, Meru Cabs, wants to change that.

Launched in the financial capital of Mumbai in 2007 with just 45 taxis, Meru Cabs has grown exponentially in terms of fleet size and geographical presence, boasting a fleet size of around 7,000 taxis across eight cities today.

And India's taxi king isn't stopping there.

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"We now want to expand and have our presence across as many cities as possible in the country. In this financial year, we want to go to another 4-6 cities," Gupta said in an interview with CNBC. "In fact, we have hired a person to evaluate whether we can go into some international markets."

Gupta, a first generation entrepreneur, came up with the idea to run a fleet of modern, air conditioned cabs equipped with GPS – previously a rarity in India – as his earlier venture - a staff transportation business - started to stagnate.

In 2006, the government of Maharashtra invited tenders for 10,000 radio cabs, competing with traditional black-and-yellow taxis in Mumbai.

Taxis sit in traffic on a street in Kolkata, India.
Brent Lewin | Bloomberg | Getty Images
Taxis sit in traffic on a street in Kolkata, India.

"We thought it was a good opportunity, and we should apply for this license. We bid for that and got it," Gupta said.

Meru was offered a license to operate taxis in the city, with the condition that existing black and yellow taxi drivers were absorbed.

Since then, Gupta has expanded the company beyond just running a taxi fleet. Meru has established a training academy where new drivers are put through an intensive program, learning about customer service, hygiene and safe driving habits.

What's at the nerve center of the business, however, is its call center where some 400 staff work across three shifts, executing 25,000 bookings daily.

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"We do a lot of analytics, checking and auditing the trends that we see or the patterns of the customers. So based on our prior experiences for the previous days, weeks and months, we're able to predict what the number of cabs that will be available for the next few weeks," he said.

And as Meru has evolved, it has also added a mobile app, which today accounts for 35 to 40 percent of their overall bookings.

Gupta is an embodiment of the entrepreneurial spirit prevalent in India – where around half the workforce is self-employed.

"I think Indians inherently, genetically, have that kind of entrepreneurial mindset, they want to do things on their own," he said.

"They are ready to go the extra mile, and put in the extra effort to make their dreams come true. And now, the opportunities have [grown] because companies [are] prepared to back you with VC [venture capital] funding and private equity funding," he said.