Saturday, January 23, 2010

A case of two disruptive Ms

As consultants, we tend to be heavy users of travel services. Therefore, disruptive business models in the industry are particularly interesting.

Makemytrip, the travel portal, is an interesting case. For a frequent traveler, the ability to quickly evaluate flight options and comparison shop is of phenomenal value. Often travel schedules do become unpredictable and need change during odd hours. No conventional offline travel agent seems to come close to providing the level of experience and flexibility that a portal like Makemytrip does. In addition, what is particularly interesting is that prices online hardly ever differ from those booked through agents. Maybe its because both are hooked onto the same GDS systems for flight bookings and offline travel agent commissions are increasingly on the downward route.

This is making me and a number of my consultant colleagues, increasingly shift online to make bookings despite having dedicated corporate travel agents at our call. Soon offline travel houses will find it hard to justify their value and premium pricing against flexibility offered by these online setups.

The second disruptive case is that of Meru. Meru provides cab services in multiple cities of India with a dedicated phone-based booking facility. What is interesting is that Meru has been able to provide uniformly high quality cab services using a relatively low-cost model. Their cabs might not be the best of cars (and that's changing too), but are certainly clean enough, consistently in every city. Again where Meru beats "traditional" professional cab firms is the flexibilty of booking a car upto 30 minutes in advance in almost any location in cities where they operate - an invaluable service when schedules change rapidly; and at prices that are one-third of a corporate travel firm, they are a hands-down win proposition.

What both these models are doing really well is using technology to provide low-cost services with reasonable levels of quality and focusing on an important value point for frequent travelers - flexibility.