The last-mile distribution segment in India has grown at a tremendous pace over the last decade, especially post the introduction of the Tata Ace, the zippy four-wheeler from Tata Motors, in 2005 that created a whole new category called small commercial vehicles. What followed was a rapid migration of cargo movement from three-wheelers to four-wheelers given the much better overall value proposition offered from the latter.
That said, the last-mile cargo space is still predominantly unorganized and fragmented, with a number of single vehicle owners and owner-driven vehicles in the fray. While the likes of Ola and Uber have taken the last-mile passenger transport space by storm since the beginning of the decade, the last-mile goods transport segment now has a player that has come on board with ‘disruption’ in mind – Lynk Logistics.
Mr. Shekhar Bhende and Mr. Abinav Raja, Co-Founders, Lynk Logistics, and friends from Northwestern University in Chicago, always had a special interest in setting up a start-up; not just any start-up but one that would help solve an existing problem in the market. The day they spotted a number of idle mini trucks lying along the roads in Chennai, their start-up idea was ready.
“We launched a beta version of our app in October 2015 to test our technology platform and commercially launched Lynk Logistics in June 2016. It has definitely been an exciting and rewarding first year of operations with the first few months exceeding our expectations”, says Mr. Abinav.
“We are growing really fast and have had lots of learning. We have had more than 2 lakh downloads and have over 12,000 unique customers who use our platform every month. We have impacted the lives of more than 1,200 truck owners / drivers who are partially or fully dependent on Lynk for their livelihood. We’re currently operational in Chennai and Hyderabad and will be adding more major Indian cities this year”, adds Mr. Shekhar.
The Lynk app has been developed on a platform built by Ramco Systems. The app has been further enhanced and customized by Lynk’s team of around 30 developers at its head office in Chennai. While the front-end facing Customer App can be downloaded from Google Play Store or the Apple App Store, the Driver App is an Android App that is pre-installed on a smartphone that is given to all drivers who enroll on its platform. Apart from building a robust and fool-proof app, Lynk also has tools developed in-house to track driver activity, manage payments, maintain finances, etc.
Bringing in transparency
Lynk caters to both businesses and individuals and has a share of around 75:25 in favor of businesses at present, reflecting the fact that businesses prefer a more organized platform when compared to individuals, though the latter is catching up too. Bringing in new solutions to the market has its own share of challenges, though the advantages of a disruptive approach outweigh the hurdles. Knowing this well, Lynk is focusing on delivering good quality service and transparency in transactions so that customers and drivers get a great experience that would keep them hooked on to the Lynk platform for the future.
Talking about the advantages and the difference Lynk offers, Mr. Shekhar shares: “For us, both our customers and drivers are important. So if the platform is not adding value to both sides it is not going to succeed. The response since our launch has made it very clear that we are adding value to the customer. We are around 20 to 30 per cent cheaper than the market which makes us far more economical. The reason for this is our business model which is based on efficiency, so if we can utilize one asset (truck) more, we can drop the price and pass on the saving to the customer.”
Mr. Abinav takes over: “Another main difference we bring is in the transparency of our platform. Previously, it was difficult for the customer to figure out where his goods exactly are with drivers not disclosing the location, delivery not happening on time, etc. Also, the entire trip history was maintained in pen and paper. Now, all this runs on our mobile app which has a customer portal where he can track everything at his fingertips. Our platform removes the stress of managing the logistics part which is usually a lot in a business that has to perform deliveries on a day-to-day basis.”
Matching supply and demand
Apart from making the actual transport hassle-free and a lot cheaper, Lynk’s tech-savvy approach brings in another major advantage when compared to the conventional approach – seamlessly matching supply and demand for the customer and much better asset utilization for the vehicle owner.
“If a customer wants a truck once or twice a day, sourcing a vehicle is quite challenging. There is no one stop shop where they can get a truck as and when needed. We can deliver a truck anywhere in Chennai in just 20 minutes now. The estimated time of arrival is clearly communicated to the customer along with the vehicle type, driver details, etc. On the driver’s side, when the Tata Ace became popular, along with Piaggio Ape in that segment, a lot of people bought trucks. We found that there is a lot of under-utilization of asset with drivers and vehicles remaining idle many a time. If a driver commits to our platform on a full-time basis, he is assured a steady, predictable form of income. Firstly, he gets good business and is hence able to return the money on his asset and still have some money in hand. We have proven time and again that some of our drivers have generated Rs. 45,000 to Rs. 50,000 per month on a Tata Ace and are confident that this will be sustainable for at least five years down the line”, explains Mr. Shekhar.
Lynk Logistics is already operationally profitable, meaning it makes money on a per-trip basis – quite a remarkable feat for a start-up in this space. As it scales up operations, the company hopes to breakeven in the near future and proudly announce its presence in all major cities by 2018.
Customer’s Voice
“We distribute toys of different brands for the entire Tamil Nadu region. We have had a very happy association with Lynk. All parameters of the trip are fixed so it’s a hassle-free experience for us and also for the end-user. Whatever minor issues we had were sorted out seamlessly by the Lynk team. We have increased our revenue by close to 40 per cent after getting on board the Lynk platform. More than money, the service has taken care of itself without giving us any headache; that’s the best part of working on such a platform.”
– Mr. Santhosh Kumar, Proprietor, Monopoly Marketing