RedBus Business Model | How Does RedBus Make Money?

Pratyusha Srivastava Pratyusha Srivastava Anup KR. Anup KR.
May 7, 2022 4 min read
RedBus Business Model | How Does RedBus Make Money?

It's great to see that an app is developed to help reduce the hassle of booking bus tickets. The company was built to help us book bus tickets conveniently from our home without waiting at the long bus ticket counter. But, RedBus made it possible in 2006. Now it is possible to book tickets to any part of the country with just a few clicks.

RedBus has been received very promptly by the Indians. India being the 7th largest contributor to the world's GDP, aims to take the travel and tourism industry to a next level of success worth USD 48 billion.

But, companies like RedBus put their immense contribution towards making the journey of travellers very convenient and safe. RedBus’s contribution has taken the travel and tourism industry to great extent. Let's look at the business model of RedBus and understand its complete operations.

About RedBus
Where Does RedBus Operate?
Key Services of RedBus
Target Audience of RedBus
Business Model of RedBus
What Is Unique About The Business Model Of RedBus?
How Does RedBus Make Money?

About RedBus

RedBus is India’s largest online bus ticketing platform headquartered in Bangalore and owned by Goibibo. It provides a ticket booking facility through its website, iOS, and Android mobile apps and connects bus travellers with a network of over 2500 bus operators.

For better guidance, the company joined the TiE Entrepreneurship acceleration program where they got the guidance of great mentors.

RedBus was the first of its kind and no doubt, it came out radiantly. Today, it sells more than 18,000-20,000 tickets per day. The company has two subsidiaries YourBus and Empresa Digital Peruana S.A.C.

Where Does RedBus Operate?

Till now, RedBus has served more than 18 million people across the world. Outside India, RedBus also has a strong foothold in countries like Colombia, Peru, Malaysia, and Singapore.

Cities where RedBus operates in India:

  • Delhi
  • Bangalore
  • Pune
  • Mumbai
  • Chennai
  • Hyderabad
  • Ahmedabad
  • Kolkata
  • Mysore
  • Visakhapatnam

Countries where RedBus operates:

  • Colombia
  • India
  • Indonesia
  • Malaysia
  • Peru
  • Singapore

Key Services of RedBus

RedBus offers a secured and manageable experience of booking tickets online. Moreover, it offers complete choices to the customers such as choosing their destination and preferred seating options.

List of services provided by redBus:

  • Bus Hire
  • Bus Tickets
  • rPool (Bikepool & Carpool)

Target Audience of RedBus

RedBus generally targets people who want to book a bus ticket without going to the physical place to buy a ticket. This concept of RedBus is made to acquire its consumers by providing customer support, discounts, and other perks which are impossible to get at the physical bus counter.

Business Model of RedBus

The business model of RedBus is very strong along with its digital marketing strategies. RedBus's business model is very simple as it charges a commission on every bus ticket you book. It charges a commission from the bus operator on every ticket booked through its platform. The commission is approximately 10-20% based on the value of the ticket being sold.

RedBus also provides hotel services along with ticket booking. It offers great deals on various occasions and some special discount offers as well. But, the most advantageous factor that comes with RedBus is that it provides the customer with the opportunity to choose the most favourable route to their destination, with the most favourable seat with the most favourable and best bus.

What Is Unique About The Business Model Of RedBus?

Its business model is entirely based on its quality service to the customers. Its social media strategies are designed so well that it always finds great proposals for its audiences. It mostly keeps on promotion but that too, on customers demands and favours.

Some of the features that make it stand out are:

  • Customers can track their bus.
  • Customers can book bus according to the ratings.
  • There are reserved seats for women.
  • Customers can give feedback to the bus after the bus trip.

How Does RedBus Make Money?

RedBus makes its money by charging some fee as commission from the bus operators on each booked ticket on RedBus. The commission comes as 10-20% of the total ticket value.

In 2019, RedBus received great success, it had annual revenue of $85 million. The company has a valuation of $375 million. Now, it has over 36 million users from all over the world, 30,000+ outlets along 80,000 routes, and 3500 bus operators according to RedBus given data on its website. And known as the largest online bus ticket company.

Conclusion

RedBus has gone through lots of success and failure since its launch in 2006. There are tons of bus services available 24Γ—7 and meet all the needs of the traveller. Its business model is quite simple and strong but most importantly, RedBus is wildly famous and welcomed among the common people.

As it eases its major issue with finding a fine bus for any destination. It's one step closer to fulfilling every need of a traveller along with its destination requirements. RedBus was one of its kind and it's a true inspiration for developing services for the betterment of common people.

FAQs

What is RedBus?

RedBus is an online bus ticket booking platform Phanindra Sama, Charan Padmaraju, and Sudhakar Pasupunuri in 2006.

What are the subsidiaries of RedBus?

RedBus has two subsidiaries YourBus and Empresa Digital Peruana S.A.C.

How much commission does RedBus take?

RedBus charges 10% to 20% commission on the value of the ticket.

Which company owns RedBus?

The parent company of RedBus is Goibibo.

Who is the founder of RedBus?

Phanindra Sama, Charan Padmaraju, and Sudhakar Pasupunuri founded redBus in August 2006.

Is RedBus acquired by Ibibo Group?

Yes, redBus was sold to Ibibo Group for $138 million.

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