Radio taxi service provider Meru Cabs plans to expand its operations to four new cities — Chennai, Pune, Chandigarh and Ahmedabad — in the next nine months.

The company, which operates in five cities, including Mumbai, Delhi and Bangalore has a fleet of 5,500 vehicles, will be adding 2,000 more as part of this expansion, a bulk of which will be through the driver-owner route.

It is also set to launch a new cheaper, short-distance city service using smaller cars to tap into the auto-rickshaw passenger segment.

“This service will have easier availability of cabs and costing 20 per cent less than our regular fares of about Rs 18 a km. It is targeted at passengers who would usually go to a shopping mall or pick up their children from school in an auto,” Siddartha Pahwa, CEO, told media persons here today.

India-centric private equity fund, India Value Fund, is the largest shareholder in the company with an investment of Rs 170 crore. Pahwa said while it would own about 300 out of the 2,000 new cars that will join its fleet in the next few months, the rest would be driver owned.

“We will help the drivers get finance and ensure that they retire their loan in three years. After the loan is retired, our drivers generally earn Rs 25,000 to Rs 30,000 a month,” he said.

The company notched up revenues of Rs 400 crore last fiscal.

On the new short-distance service, he said the company was negotiating with small car brands, including Indica and Swift. “In Hyderabad, for instances, there are 40,000 autos plying, which is a significant market,” he said, adding it will start this service from Hyderabad with 250 small cars initially.

amitmitra@thehindu.co.in

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