Ziqitza ambulances make money while serving India's poor(Read article summary)
Built on a vision of providing high-quality ambulance services to the poor, Ziqitza operates more than 800 ambulances and is expanding rapidly, eying markets outside India.
Courtesy of Ziqitza Health Care Limited
In the ever-evolving landscape of global business, it is not uncommon to conflate traditional business with social business – particularly when it comes to health.
How does, say, a pharmaceutical company that makes billions in profit by selling health products differ from a small enterprise that improves the health of a surrounding community and manages to stay financially solvent?
“Social businesses are driven by a social cause, but motivated to make money so they can continue to deliver on their social mission,” she said. “Traditional businesses, however, are driven solely by the profit motive.”
That is not to say elements of traditional business are not at play in social businesses.
“It is important to remember that a business is a business, whether it’s socially or financially motivated,” she said. “They all must operate the same in order to be successful, and thus sustainable.”
Mangal speaks from experience. Built on the vision of providing high-quality ambulance services to India’s poor, Ziqitza has soared to surprising levels for a social business. Beginning with just 10 ambulances in 2005, it now operates more than 800 in 17 states across India.
During this period of growth, Ziqitza has served more than 2.5 million people – many of whom live below the poverty line – including more than a half-million pregnant women. At present, Ziqitza’s market share is approximately 25 percent, with annual revenue of roughly $20 million, according to the company.
Ziqitza’s large-scale growth and financial success is a result of its innovative business model. The company has established a range of revenue streams that enables it to not only remain socially inclusive and financially sustainable, but also to operate at scale – and always with its social mission driving its growth.
(This social mission – to provide emergency medical services to India’s poor – is particularly important given the country’s vulnerability to large-scale disasters: More than half of its land is prone to earthquakes, roughly 30 million people annually are affected by floods and the traffic accident rate in India is 21 times higher than the world average.)
Ziqitza is built on two models for emergency transportation: Dial 1298, a fully private service, and Dial 108, a public service supported by state governments. For its 1298 model, Ziqitza operates a private ambulance service in Mumbai, Kerala, Bihar, and Punjab that charges wealthier patients more to be transported to private hospitals, using that revenue to “cross subsidize” its discounted or free service to lower-income patients.
Of course, the luxury of operating in markets that can support a cross subsidy is due in large part to India’s diverse economic stratification, but it is also a tenant of social business compared to traditional business: Rather than maximizing profits by just serving the rich, Ziqitza has found a creative way to reach poorer and more vulnerable populations by repurposing some of its profit.
One of the ways Ziqitza was able to expand so quickly was its success in securing government tenders for emergency transportation through the Dial 108 service. Ziqitza currently has tenders in three states, for which patients – most of whom live in rural communities that are often far removed from the health system – can dial 108 to get free emergency transportation to a nearby public hospital.
Government can be an important customer for both traditional and social businesses, but for Ziqitza, it is a natural means through which the company can serve more patients in greatest need of their service.
Due to Ziqitza’s wide reach across India, it has found another creative source of revenue: corporate advertisers. Corporations like Tata AIG, ICICI Lombard, and others have sponsored Ziqitza’s 1298 ambulances with their logos, keeping the company from having to sacrifice its inclusive approach to remain afloat.
To the corporate sponsors, Ziqitza’s social mission is actually a value added compared to traditional businesses, enabling the sponsors to align themselves with the social responsibility inherent in the 1298 brand.
Another way Ziqitza earns revenue is by allowing private hospitals to brand its ambulances. While the vehicles are still operated by Ziqitza and its trained medical staff, hospitals are able to promote their brand in an increasingly competitive health marketplace, yielding benefits for all parties. Consistent with its mission, Ziqitza is more concerned about serving patients in need of emergency care than compromising its brand recognition.
Through these four approaches, Ziqitza is leading the way in the budding field of social business. But it’s not done yet. As Mangal explained, “We have been fortunate to find success in certain pockets of India, but we would like to see if our model can work elsewhere – both within and outside of India.”
The company hopes to secure additional government tenders in Uttar Pradesh and Himachal Pradesh next year, which would put it well on its way to its goal of operating 3,000 ambulances in the next three years. It also hopes to test out its model in other developing countries.
When Muhammad Yunus first described “social business,” referring to it as a “new kind of capitalism that serves humanity’s most pressing needs,” he may not have had Ziqitza in mind. He may never have even heard of the company.
But since this concept has taken root in thousands of markets across the developing world, there have been few greater exemplars of Yunus’ vision for socially motivated companies than Ziqitza, which has also solidified – at least for me – the inherent distinction between social business and traditional business.
• Adam Lewis is an associate at Rabin Martin, a global health strategy firm in New York.
• NextBillion.net is a blog and web resource bringing together the community of business leaders, social entrepreneurs, NGOs, policymakers, and academics to explore the connection between development and enterprise.