Search for the Next Go Jek: The Boys on the Bus
Malaysia’s CatchThatBus is more than just a ticketing service; It wants to be present at every point of the passenger journey
PHOTO CREDIT: Getty Images
Ashwin Jeyapalasingam knows that for ordinary people in Malaysia there is little romance to travel.
On the eve of the popular Hindu festival Thaipusam, for instance, throngs of male devotees — over a million people in total participated earlier this year, according to reports—made their way to the Batu Caves, 13 kilometers north of Kuala Lumpur, for this grueling rite of passage involving the piercing of long needles through the upper arms and face. Before the religious ordeal, another had to be overcome: Long snaking lines at bus counters and ticket touts preying on last-minute passengers.
“People travel for a purpose,” Jeyapalasingam says, whether it is to attend religious festivals or to return to their hometown to see family, work, or show up for a job interview. Those who live in satellite towns around Kuala Lumpur must endure a cruel 4-5 hour daily commute by bus—as buses are the most economical way of connecting most areas in peninsular Malaysia. Through a website and mobile app, CatchThatBus wants to make such journeys easier by giving passengers transparent, real-time information on seat availability, schedules and rates, enabling them to book and buy their tickets online.
SHELTERING SKY: Every year, millions of Hindu worshippers gather under a full moon at the Batu Caves near Kuala Lumpur to mark Thaipusam.
A former associate director at the consulting arm of Pricewaterhouse Coopers in Kuala Lumpur and holder of a Master’s degree in management from the London School of Economics, Jeyapalasingam, 37, is one half of the duo that founded CatchThatBus, which has operations in Malaysia and Singapore. Co-founder Viren Doshi, also 37, prodded his high school buddy from the Kuala Lumpur suburbs to leave the corporate world to build their own start-up, after he also decided he didn’t want to run their family’s photocopier distribution business after a stint at Siemens and acquiring an MBA at the Australian Graduate School of Management.
Having been in the bus business for more than three years now, the founders don’t want to stop there; they want to go beyond providing a convenient way to get bus tickets to being able to improve the entire journey for the passengers by providing physical counters at overcrowded bus terminals and a feedback loop that hold bus operators accountable for such inconveniences as torn seats and faulty air-conditioners.
Therein lies the success of CatchThatBus: An awareness that solving one problem can lead to opportunities to tackle other issues in order to change not only transport but how ordinary Southeast Asians live, work, and play. As Uber and Grab continue to benefit the privileged set, transportation for the masses—as in the ojeks of Indonesia and the buses of Malaysia—has largely been overlooked. CatchThatBus saw opportunity in these less glamorous crevices.
The problem Jeyapalasingam’s CatchThatBus set out to solve is different, he says, from that of Indonesia’s Go-Jek. While Go-Jek has found success in solving a local problem with the unregulated ojek industry and has eventually spawned other services, he believes their focus is regional from the outset. In countries like the Philippines, Thailand, and Indonesia, he says, the local bus
industry is similarly structured; hence his business model can readily be transplanted.
The idea for an online ticketing platform came to Doshi when he tried to buy bus tickets online one day and was surprised he couldn’t do it. The two founders grew up in a suburb of Kuala Lumpur, commuting to school by bus, which they found old, poorly maintained, and infested with ticket touts.
Bootstrapped in the beginning, the start-up landed an initial $1.5 million in a seed funding round led by Jungle Ventures in 2015 and recently went through a bridging round to give the team a bit more runway. They’ve had angel investors, as well as institutional investors, such as SPRING Singapore—a government agency that aids enterprises. The company is now looking to raise a Series A round in the middle of this year.
Khailee Ng, managing partner at one of the firm’s investors, 500 Startups, told Inc. Southeast Asia in 2016 that the company’s digital ticketing service seemed to him like a no-brainer: Over time in Southeast Asia more and more consumers would use their mobile phones to choose, pay, and track their bus transport.
Viren Doshi and Ashwin Jeyapalasingam, Co-founders of CatchThatBus (PHOTO CREDIT: Rony Zakaria)
Wooing Bus Operators
CatchThatBus serves the lower to middle income group, where cash is definitely king. “We started off with the online space—online banking, credit card, PayPal—but that only captures a small niche of the market,” Jeyapalasingam says.
In the early days of the company,
he says, about half of their customers were telling them that it was the first time they had ever purchased anything online. The founders realized that if they wanted to grow the service and reach more people, they needed to expand to cash.
CatchThatBus now offers cash-on-delivery in the Klang Valley and selected locations. Users must book their tickets on the app two days in advance, select the cash-on-delivery option and put in their address and preferred delivery time. Payment is made upon receiving the tickets.
As to be expected in a traditional industry, the pair faced resistance at the outset, particularly from bus operators—many of which are family-run businesses that have been passed down from one generation to the next.
Doshi, who specializes in fostering relationships for the company, recalls how they had to wait 2-3 hours or even half a day just to get one operator to sit down with them and hear them pitch the CatchThatBus platform. The first three or four operators were the toughest to get, he says.
Unlike intra-city buses that are public-private partnerships, intercity buses—the space where CatchThatBus operates in—are privately owned, which means that “consumers don’t get a say in a lot of things,” according to Jeyapalasingam.
Compared to Singapore’s regulated bus industry, Malaysia’s is still fragmented, where a company can operate with up to 400 buses, while some can get by with just one.
Luring Repeat Customers
They had to convince operators that the industry is changing and over-the-counter transactions will start to decline as more and more people gain access to smartphones. And convenience, he told them, is going to be an essential requirement for travelers.
To get initial traction, CatchThatBus relied heavily on early adopters—who would then spread the word among friends and relatives. The company was also active on social media and acquired users through Google AdWords. New users were greeted with a simple and clean interface, easy enough for anyone to navigate.
Through the app, users can choose from different routes, schedules, and ticket prices. They then reserve seats by selecting the number of passengers and pay through online banking or credit/debit card. By putting the various bus operators’ ticket inventory in one platform, passengers don’t have to go to every bus station in search of tickets, uncertain if tickets are already sold out which then forces them to transfer to another station.
CatchThatBus had a decent amount of inventory because they had initially partnered with the biggest bus operator in Malaysia, Konsortium Transnasional Berhad (KTB), whose fleet covers about 15-20% of the market, according to Doshi.
What Jeyapalasingam—the more detail- and numbers-oriented of the two—realized is that once people started using the service, they became repeat customers. He says the platform now services about 70,000-80,000 customers on a monthly basis.
“It’s a shift in their behavior completely—from purchasing from the bus operator to purchasing through us,” Jeyapalasingam says.
For every ticket sold, the company gets a 10-15% commission—an industry average, according to Doshi, similar to what is charged by agents on the ground. Besides, he says, operators can afford this rate as the government subsidizes the cost of fuel.
Mohd Rasydan bin Ramli, manager of Orkid Express, a Johor-based bus company, says purchases through the platform have accounted for a 10-12% increase in sales every month. CatchThatBus also provided Orkid Express with a mobile printer so its sales representative can sell at the bus stand.
As a matter of necessity, CatchThatBus also had to guide these operators on how to use their technology.
Today, 70 bus operators are using the platform—a sizeable amount of the 120-150 operating across Malaysia.
Going Online to Offline
Along the way Jeyapalasingam and Doshi realized that for many customers, buying tickets was only one of the major pain points in bus travel. Through the mobile app, passengers can now report and take photos of faulty seats, leaky air-conditioning, a driver who smokes or uses his phone while driving, or drivers who pick up passengers along the way without valid tickets and instead pay him a small fee.
Jeyapalasingam admits that they are not the first movers in the space. But while competitors have focused
on being a ticketing agent for a range of transport services—bus, train, and ferry—CatchThatBus zeroed in on buses and expanded its coverage to include the entire customer journey.
It has also moved offline in the form of counters at the bus terminals, where people can purchase tickets and get assistance for boarding, schedules, and other concerns. The move began six months ago and has “received great support from the public.” Currently, CatchThatBus has five counters in various bus terminals, which it plans to raise to about 20 this year.
After a bumpy start, it seems CatchThatBus is on the right track.
BY Entrepreneurs Organization