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Issue Date: 5 / 2009 |
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Rickshaw Respect: The Work of Irfan Alam
Neeta Lal
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Irfan Alam (center) with two
rickshaw operators. Neeta
Lal
Click image to enlarge.
Perhaps fifty rickshaw pullers huddle around Irfan Alam as he briefs them about the nuances of his company’s operations. The entrepreneur fields queries and accepts inputs and suggestions from the operators to enhance his services. The session is then rounded off with piping hot cups of tea that help build camaraderie amongst the congregation.
Says the savvy businessman, “I make it a point to keep my rickshaw operators in the loop about ways to improve business and how they can enhance the company’s profitability and their own incomes.”
And that he does. In fact the 27-year-old has made a roaring success of his unique grassroots initiative which streamlines the workings of rickshaw pullers in India by bringing them under the umbrella of his firm -- Sammaan (respect in Hindi).
Launched in 2008, Sammaan currently has 10 million rickshaw pullers under its operations, across a swathe of Indian cities. The venture has helped modernize the cycle rickshaw sector which constitutes a sizeable 30 per cent of India’s urban transportation.
“The biggest challenge of my venture was to convert a huge base of cycle rickshaws into an interactive out-of-home advertising medium and a marketing engine-cum-transaction point,” says Alam. He has also gleaned a cachet of awards from the Indian government and media channels for his unique business. “Everybody talks of corporate social responsibility but not of corporate social sustainability. So I tried cobbling together a business model that was workable and sustainable.”
Such wisdom is hardly surprising for a young man who had entrepreneurial seeds sown in his mind while his peers were still playing with toys. In fact at 13 years, the youth was trading in stocks. And by the time he turned 14, he had already launched a portfolio management venture!
But why rickshaws? Surely for an alumnus of India’s blue-chip management school -- the IIM (Indian Institute of Management), Ahmedabad, there was no dearth of employment opportunities? “I realized that of all forms of urban transport in India, the cycle rickshaw sector was the most unorganized. Also, the idea had the potential to serve as a logistics solution in cities, towns and the rural market which the corporate sector finds difficult to penetrate.”
Besides, the challenges the model offered appeared quite thrilling to the spunky entrepreneur. “The most critical challenge,” says Alam, “was working with the marginalized section of society. I needed to be exceptionally patient to give them a clear perspective of the company’s objectives,” he says.
For precisely the same reason – that the business centered around illiterate and underprivileged people -- it was tough to get loans to bankroll his venture. Finally, Alam had to pool his own resources with friends helping out to collect seed money of about Rs 10 lakh.
“Another, even bigger obstacle, was to make clients understand that social enterprises can be as self-sufficient an profitable as any other business,” says Alam. “In India, 95 per cent rickshaw operators do not even own the rickshaws. They just rent them out for Rs 20 a day. So my concept looked weak on paper.”
But gradually things fell into place with Alam’s diligence. “In fact we’re the only company of its kind in the world to work in this segment,” informs Alam. “Even in India, there’s no organized player in the market, who are offering similar services.”
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Alam surrounded by members
of the Sammaan rickshaw
cooperative. Neeta Lal
Click image to enlarge.
According to Alam’s research, over 95 per cent rickshaw operators do not own their vehicles in India but rent them out daily. So the relationship between the fleet owners and the operators did not grow beyond this exchange level. But through Sammaan’s system, rickshaws are given free to the operators though a nominal amount is charged as maintenance fee.
The entrepreneur’s profitability is ensured by advertising and brand promotion on the rickshaws. “Our rickshaws are designed in such a way,” elaborates Alam, “that the advertisers get ample space to put their displays on the side, front and back panels of our vehicles.”
There’s third party product selling as well -- with items such as mineral water, fruit juices sold from a basket displayed in front of the rickshaws. The sale of these products not only makes the ride more comfortable for the commuter but also augments the rickshaw operators’ -- and Sammaan’s -- profitability.
Rickshaw design is thus integral to the company’s success. Ergo, Sammaan has established a full-fledged R&D center in Patna, the capital city of Bihar, to improvise on the old rickshaw models and morph them into more operator-friendly and profitable vehicles. The center employs 19 people, including three engineers, who are involved in grassroots innovation for the rickshaws.
According to Alam, as compared to other modes of outdoor advertising, Sammaan’s rates work out to almost 90 per cent cheaper. “If a company hires 100 of our rickshaws for promotion in a given town -- and if one rickshaw covers an average of 10 km -- then the advertised product will be seen by almost half the town. Since a rickshaw is the best medium for traveling short distances, our clients can reach the residential streets and even the rural and semi rural areas where no other mode can penetrate,” he says.
Sammaan’s operators -- whose earnings have now doubled from roughly Rs 1,500 to Rs 3,000 (USD 60) per month -- are also given free uniforms. Every operator also holds a saving bank account in a local bank. Not that this was a cinch to work out. “The biggest roadblock lay in convincing the bankers to open bank accounts for the rickshaw operators,” says Alam. But today, with the venture having met with phenomenal success, the local banks vie with each other to bankroll Sammaan’s ventures.
The rickshaw operators are also provided with free accidental insurance up to Rupees one lakh. To further benefit the rickshaw operators, the company also imparts free education to the operators’ families under its education program. The families’ ladies are taught vocational crafts -- like stitching, tailoring, embroidery --to augment the familial income.
With the expansion of business -- Sammaan’s operations have ratcheted up from one city to 10 in four states. The company’s client list too, has swelled to over a dozen and includes reputed national players like Punjab National Bank, Bharti, Hindustan Times and Bisleri. Next in line is low cost housing for rickshaw operators, carbon trading opportunities and a public offer by 2012. The company is expecting 400 per cent growth this year which will increase its turnover manifold from the current Rs one million.
Unsurprisingly, Sammaan’s operations have transformed the lives of thousands of rickshaw operators. Says Shivcharan Manjhi, 35, an operator, “My life has changed completely. My earnings have doubled and people respect me much more. Earlier, many customers would abuse me or refuse to pay me. But ever since I joined this new company and got a new rickshaw and a uniform, my clients behave respectfully with me.”
Manjhi explains how his newfound confidence has helped him give up alcoholism and smoking. “Earlier, I’d squander most of my money on alcohol and tobacco. But ever since I’ve started going to Sammaan’s counseling cell, I’ve given up drinking and smoking. Last year, I [paid for the marriage of] my sister ... from the money I was able to save.”
Neeta Lal is a freelance writer based in India.
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