Building The Largest Online Bus Ticketing Company in India: redBus.in Co-founder and CEO Phanindra Sama (Part 3)

Sramana: You identified a significant number of problems in bus travel. Which problem did you think was the biggest?

Phanindra Sama: The biggest problem of all was that people could not buy return tickets. Every time I arranged a bus to visit my parents I had to call them and have them book a return ticket so that I knew I could get back. I travel on Friday and Sunday evenings, which are the demand days. That was the only way to ensure I would receive a return ticket.

Consumers in India face a lot of difficulties. If you look at the characteristics of these difficulties, you will see that they all have a common information element. There is information about availability, departure locations, seat preferences, return trips, and many other areas as well.

All of those problems got to me as an engineer. I realized if there was one server that every bus operator could arrange the business with, it would solve all of these problems. I asked the travel agent if there was software that made all of the arrangements available, would he secure his tickets through that software for a small charge? He said, “Absolutely!” Anything that could save him time on all those telephone lines was welcome. He also realized that there were times he could not monetize a customer because he did not have a seat to sell him, even through somebody somewhere probably had a seat to sell.

I realized that I had a good idea, so I decided to go ask bus operators if they would use that type of system if I built it. If they were not going to use it, then there was no use in building it. My travel agent made some introductions to various bus operators. When I asked them if they would use the system, they also said yes. They were also frustrated with all of the phone calls. Every travel agent they worked with would call them at least 10 times a day. That meant the bus operator always had to have someone manning the phone, which resulted in a high variable cost. That also prohibited the bus operators from adding more travel agents to their list because the bus operators would have to hire more people to cover the phone calls. The bus operators realized that with a software system, they could appoint a larger number of travel agents because the system would take care of allocating seats to them.

Sramana: You asked the travel agents if they would pay for that service. Did you ask the bus operators if they would pay for it as well?

Phanindra Sama: Yes, and they were fine with paying for it. Both the travel agents and the bus operators were willing to pay for the system. I had not decided at that point how much they should be paying for the system, only that it was a service that they would have to pay for. The benefits were clear to each side.

This segment is part 3 in the series : Building The Largest Online Bus Ticketing Company in India: redBus.in Co-founder and CEO Phanindra Sama
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