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Meru CEO on how its new marketplace model beats surge pricing | CIO

Meru’s win-win formula

If you look at a typical marketplace, it allows the supplier to set the price.  For instance, a hotel aggregator doesn’t mandate all 5-star hotels to offer the same price. However, if you look at the shared mobility space, the price is decided by the cab aggregator – there are fixed slabs for sedans and hatchbacks.

So the cab aggregator marketplace is actually not a marketplace in the truest sense, and this is the biggest challenge at this point in time. Initially a lot of incentives were given to drivers to create a large market. But at the same time, it created an imbalance in the whole ecosystem – driver partners became dependent on incentives.

“When we looked back, we asked why should the cab aggregator fix the prices – why not allow the driver partner to fix the price. With this model, we share the estimated price with the driver and then he gets to decide the actual price,” says Sangoi.

Now when the customer accesses the app, he or she can view all the nearby cabs and the prices set by the respective drivers. There’s an upper cap that prevents driver partners from charging exorbitant amounts, and a lower cap that ensures drivers don’t run at losses.

This brings about a healthy competition between the drivers, and also encourages them to keep the prices at a minimum.

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Meru CEO on how its new marketplace model beats surge pricing | CIO.in.