Fleet operators’ plight – SAAS partners now backward integrate to become PAAS players

Fleet operators’ plight – SAAS partners now backward integrate to become PAAS players

Over the past 5 years, fleet operators who offered an integrated transportation solution to IT and ITES organizations had multiple options in terms of a choice of SAAS partners for technology support.

However, fleet operators have been caught by surprise as some of their former SAAS partners are now in the fleet business and are looking to directly offer a fully-integrated solution to companies. Traditionally, an organization that provides transportation to their employees signs up with a fleet operator who will provide them with the required number of vehicles and a technology solution for the transportation team and employees. Fleet operators who are bidding to win organizational contracts sign up with technology providers like Safetrax and then present a joint solution to them and the organizations then award the contract based on various parameters like cost, efficiency, technology used etc.

 

 

As SAAS providers have been working closely with fleet operators, there is an increased awareness and visibility into the business models adopted by the fleet operators. And SAAS providers have started to understand the size and scale of the employee transportation segment in all the major cities in India, thus, motivating them to experiment with starting their own fleet and providing a branded/bundled solution to companies. Over the years, SAAS providers have also had access to enormous amounts of data with regard to the number of trips operated, schedules and complaints reported. This data has also played its roles in motivating SAAS companies to roll the dice and start operating their own cabs. Most of these players who have little to no experience in managing fleet are now attempting to topple the veterans of the fleet provider segment. The former SAAS companies who have  now morphed into PAAS (Platform as a Service companies, hope to use their technology expertise to make transport operations more efficient and cost effective.  Their new-found enthusiasm is also backed by the fact that they are well-funded and can take on any transport operator with their ability to sustain temporary losses.

The one major hurdle that such PAAS operators have not quite wrapped their head around is the fact that operating a fleet of cabs/vans and managing relationship with drivers and organizations come with a major learning curve. And it takes years of experience and to get to a point where operations can be run smoothly. Only time will tell, if the PAAS model is here to stay or will organizations go back to the way things were. Most fleet operators are now looking to solidify their place as leading fleet operators by beefing up on the number of vehicles they operate and partnering with technology providers who do not aim to compete with them.  Other fleet operators, find themselves helpless and are forced to “attach” their vehicles/drivers to these large PAAS operators relegating themselves to a secondary service provider.  This forces their already strained single-digit margins to go down even further.

 

 

As SAAS providers have been working closely with fleet operators, there is an increased awareness and visibility into the business models adopted by the fleet operators. And SAAS providers have started to understand the size and scale of the employee transportation segment in all the major cities in India, thus, motivating them to experiment with starting their own fleet and providing a branded/bundled solution to companies. Over the years, SAAS providers have also had access to enormous amounts of data with regard to the number of trips operated, schedules and complaints reported. This data has also played its roles in motivating SAAS companies to roll the dice and start operating their own cabs. Most of these players who have little to no experience in managing fleet are now attempting to topple the veterans of the fleet provider segment. The former SAAS companies who have  now morphed into PAAS (Platform as a Service companies, hope to use their technology expertise to make transport operations more efficient and cost effective.  Their new-found enthusiasm is also backed by the fact that they are well-funded and can take on any transport operator with their ability to sustain temporary losses.

The one major hurdle that such PAAS operators have not quite wrapped their head around is the fact that operating a fleet of cabs/vans and managing relationship with drivers and organizations come with a major learning curve. And it takes years of experience and to get to a point where operations can be run smoothly. Only time will tell, if the PAAS model is here to stay or will organizations go back to the way things were. Most fleet operators are now looking to solidify their place as leading fleet operators by beefing up on the number of vehicles they operate and partnering with technology providers who do not aim to compete with them.  Other fleet operators, find themselves helpless and are forced to “attach” their vehicles/drivers to these large PAAS operators relegating themselves to a secondary service provider.  This forces their already strained single-digit margins to go down even further.

 

 

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