Abhibus.com, a Hyderabad-based online ticketing agency for bus travel, is offering travel insurance to its customers. It has partnered with ICICI Lombard to offer the service across all routes under operation.
The consumer has to pay Rs 20 extra over the cost of the ticket and can avail the facility, which will be applicable for the next seven days. The insurance covers hospitalisation expenses up to Rs 1.5 lakh and personal accident cover of Rs 2 lakh. In addition, it will pay Rs 500 per day as daily allowance (except for the first 24 hours) in case of hospitalisation for a maximum of seven days. The reason for extending the insurance to seven days is that ICICI Lombard did not have any policy for less than seven days.
The insurance cover is only applicable if the bus meets an accident and the person is injured or dead. It will not cover misplaced baggage, late running or injury caused by the passenger's mistake.
Abhibus is still in the process of negotiating for insurance cover on baggage loss and late running but nothing has been finalised yet.
The initiative was launched on July 30 and Abhibus claims that more than 500 customers are opting for this facility daily while they purchase their tickets.
Mathews adds that the company has the first mover advantage and in a very short time, several other OTAs may follow suit with added features.
The Hyderabad-based OTA that began operations in 2007 sells 7,500-8,000 tickets per day and claims to be the fastest growing OTA in the segment since November, 2012. It earns maximum revenue from the South, followed by the West region. The OTA serves more than 1,500 operators and four state transport authorities. It covers over 15,000 routes.
In 2012-13, Abhibus clocked revenue of Rs 150 crore and expects to garner Rs 350 crore in 2013-14. By 2014-15, the company expects its revenue to grow by around Rs 700 crore.
Apart from ticket booking, it also provides end-to-end transport solutions for bus fleet owners, vehicle tracking companies and e-ticketing systems for the online travel agencies such as Make My Trip and Goibibo.
It also offers technology support to state transport corporations of Rajasthan, Uttar Pradesh, Karnataka, Andhra Pradesh and Tamil Nadu. The company is in talks with PE funders and aims to raise USD 10 million to increase its inventory and promote its brand.
The biggest competitors of Abhibus.com are Redbus.in (leading the segment) and Travelyaari.com.
About 80 per cent of the company's effort to promote its brand is through the online medium, while the rest includes on ground activities. Recently, the brand sponsored the Maharashtra team in Celebrity Cricket as the company wanted to expand in the western region. It plans to launch a full-fledged campaign across all media (TV, print, OOH, social and radio) soon.
Nearly 15 million bus tickets are sold every month, of which 10 per cent accounts for online sales. The biggest challenge, according to Mathews, is to raise capital as the participant needs to have offices at all areas of operation.
Low penetration of internet, he adds, is another reason for such small number of bus tickets being sold online. In the next five years, the trend is expected to pick up. In the next decade or so, it is expected that 35-40 per cent bus tickets will be sold online.