{"id":17620,"date":"2016-11-18T12:39:17","date_gmt":"2016-11-18T17:39:17","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/rivigo-can-internet-of-things-disrupt-the-traditional-trucking-industry\/"},"modified":"2016-11-18T12:41:06","modified_gmt":"2016-11-18T17:41:06","slug":"rivigo-can-internet-of-things-disrupt-the-traditional-trucking-industry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/rivigo-can-internet-of-things-disrupt-the-traditional-trucking-industry\/","title":{"rendered":"Rivigo \u2013 Can Internet of Things disrupt the traditional trucking industry?"},"content":{"rendered":"

On a hot summer Indian afternoon, Deepak Garg (ex-McKinsey) and Gazal Kalra (Stanford MBA, ex-McKinsey) showed a crude mobile app to truck owners and drivers at a hub on the outskirts of Delhi, India. If an overenthusiastic blogger had overheard the discussion, they probably wouldn\u2019t have wasted a second into labelling the wireframes as an \u2018Uber for Trucks\u2019. Perhaps it was an \u2018Uber-model\u2019 after all, and perhaps that\u2019s why it didn\u2019t take off well with the hard-skinned truckers of India.<\/p>\n

The ground reality hit hard, and it was time to revisit the problem itself. With feedback from truckers who spent eighteen hours behind the wheel each day on less than $200 per month, Garg and Kalra realized that the key challenge was that of the industry\u2019s sustainability and not just efficiency.<\/p>\n

About Rivigo <\/em><\/p>\n

Founded in 2014, Rivigo is one of the fastest growing startups in India. They aim to provide scalable, country-agnostic express surface logistics services to match airline transportation time \u2013 while building a sustainable, safe and reliable industry. They have built a team of operators, business managers, data scientists and over 1500 truck drivers, and are currently serving some of the biggest companies in India across the e-commerce, pharmaceuticals, consumer goods, auto, and textile industries. As of this writing, they have raised more than $110M from Softbank Asia Investment Fund and Warburg Pincus. [1], [2]<\/p>\n

What makes Rivigo so exciting?<\/em><\/p>\n

Rivigo is going after the $2 trillion global trucking market \u2013 which is twenty times the size of the cab market \u2013 but is immensely fragmented and has a massive dearth of technological innovation. For instance, in India, 90% of surface freight transportations happen on road, and due to vast array of problems, 40% of perishable products get spoilt before delivery. In order to achieve their promises, Rivigo owns and operates its own fleet of trucks while closely tracking the time spent by drivers behind the wheel, to make sure that drivers are not too tired to operate the trucks safely. Further, in order to make sure that the trucks run 24×7, Rivigo leverages its big data capabilities to create a relay system so trucks can be handed over from one driver to the next, without interrupting operations. Key metrics such as number of hours spent behind the wheel and fuel usage are tracked through a smartphone app on the operators\u2019 phones. [2], [3]<\/p>\n

Striving for continuous innovation, Rivigo has become one of the first Indian startups in the recent years to file for three patents in the United States \u2013 to protect their proprietary algorithms. These algorithms focus on optimizing fuel efficiency and pilferage, improving driver productivity, and minimizing in-transit damage to the loads. Additional patents have been filed for matching drivers to routes based on geo-location and personality traits of the drivers. In addition to protecting their intellectual property, the US patents hint at near-term expansion plans into the capital-intensive North American market. [2], [4]<\/p>\n

Business Model \u2013 Products & Value Creation<\/em><\/p>\n

Rivigo offers full tracking visibility to their clients. Along with two classes of services \u2013 Zoom and Prime (a new tier, Green, has been recently launched). To help clients track vehicles, Rivigo also helps integrate their technology into the clients\u2019 internal tracking module. A brief overview of the service tiers are as follows:<\/p>\n

Prime \u2013 It is catered to the ecommerce companies, to help with one-way or two-way routing by creating a custom-tailored haul network for each client.<\/p>\n

Zoom \u2013 This product is tailored for clients with highly variable transit requirements. While guaranteeing the service quality of Prime, the Zoom model helps run freights on standardized routes.<\/p>\n

As per company statements, the clients have been able to reduce their line haul cost by 50-70%. [6]<\/p>\n

\u201cThis creates a huge amount of value because drivers love it. They are able to come back to their families,\u201d says Garg. \u201cClients love it because they get deliveries much faster compared to an environment where truckers have to stop and rest on the highway.\u201d [7]<\/p>\n

What\u2019s next?<\/em><\/p>\n

The Rivigo team are currently in the process of expanding their current fleet from 1500 to over 5000 trucks, and improve the number of trucking pit-stops from 41 to over 200 by mid-2017. Further, with the recent impetus from the Indian Prime Minister to develop technologies in India, along with subsequent changes in tax legislations, which\u2019ll help Rivigo with faster turnaround times, development of pull-based supply chains and re-configuration of warehousing and distribution networks.<\/p>\n

Other key challenges that they\u2019d need to work on:<\/p>\n