Passengers stand next to their buses as they wait in a queue to board onto ferry boats to sail to Samar island in December 2014. (Photo credit: TED ALJIBE/AFP/Getty Images)
Au Soriano worked in the corporate telecommunications world for decades before she became an entrepreneur. She always wanted to start her own business, but until 2013, she wasn’t sure what type of company that would be. Then she decided to leave the corporate world and strike out on her own.
Soriano holds a degree in electronics and communications engineering and was head of strategic business development at Smart Communications, Inc. when she made the move.
“Women are not taken very seriously when it comes to technology roles,” Soriano said. “In the Philippines, CEOs and high-level officials of telco companies are male. I was already VP-level when I was with Smart, so I thought, ‘What’s the next move for me, career-wise?’ Aside from the fact that the telco industry is going to change drastically, I thought as a female, I can only get so far. The only way for me to be a true leader in a certain company or certain industry is to do it myself.”
When considering potential problems to solve as an entrepreneur, Soriano drew on personal experience. Like many Filipinos, she had relied in the past on long-distance bus services to get around the country. But the industry hadn’t changed much in recent years. In fact, it hadn’t progressed much in decades. People had to line up in advance of their trips, waiting hours to purchase tickets. Soriano said long-distance bus trips are in high demand among students and workers in Manila who visit their families in different provinces, as well as travelers looking for affordable ways to get around the country.
“When I was younger, we were taking the bus a lot. In 2012, I was surprised that the way we traveled 30 years ago is still the same way people travel now, despite the fact that the people who are lining up for these bus tickets would have smartphones in their hands, they would have tablets, and they’re lining up for tickets,” Soriano said.
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Soriano founded PinoyTravel in 2013 after applying and being accepted to the IdeaSpace Foundation’s incubator program. The company offers an online reservation platform for long-distance bus travel. PinoyTravel has since expanded to include ferry service as well.
An industry in need of an upgrade
Although online ticketing itself isn’t a novel concept and is common in countries such as the U.S. and Singapore, it hadn’t yet caught on in the Philippines. Soriano said that the bus companies, many of which are owned by families that have been in the long-distance travel business for generations, were reluctant to embrace online ticketing. But she was determined to get through to them.
Soriano credits IdeaSpace with giving PinoyTravel the credibility it needed to land meetings with the heads of the bus companies. But she also used her years of corporate experience to persuade them to try her platform. Her tenure as an executive with Smart Communications, Globe Telecom and Bayan Telecommunications reassured executives who were wary of startup proposals.
“I think my being a former corporate person helps in terms of how I carry myself, how I talk to them. And of course, saying I was part of IdeaSpace, it made me look bigger than I actually was,” she said, laughing. “I think it opened doors for me, as opposed to a developer guy who’s in shorts and rubber shoes trying to get an appointment with a bus company owner.”
Many of the executives she approached were in their 60s and 70s and didn’t understand the benefit of using technology to upgrade their reservation systems, she said. Rather than pitch PinoyTravel as a tech platform, she presented it as a way to improve their processes. One of the biggest selling points was reducing the amount of cash on site as bus terminals. Companies dealt with high risks of being robbed at small terminals, and they became receptive to Soriano’s pitch when they realized PinoyTravel could help them reduce their losses.
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PinoyTravel also offered customer service solutions, taking on the responsibility of fielding calls from travelers or alerting people to delays and canceled trips on different bus lines. Doing so alleviated another level of pressure from the companies, sweetening PinoyTravel’s proposition.
Despite the industry’s initial reluctance, Soriano said PinoyTravel gained momentum after the first few companies signed on. Other bus brands didn’t want to lose their competitive edges. Soriano also said that the media exposure IdeaSpace helped the company generate boosted its profile and led to more business.
The fact that the bus companies responded illustrates Soriano’s own point that, “Starting up a business isn’t just about knowing how to code, it’s about knowing exactly how to run a business, and I had that experience."
Today, PinoyTravel sells 500 tickets a day via its website and mobile app. Users who don’t have credit cards can reserve tickets online and pay for them in PinoyTravel’s partner locations, such as pawn shops and other non-bank, over-the-counter service providers. The partners let PinoyTravel know when someone has paid, and the company sends a confirmation email and SMS to the customers. When they arrive at the bus station for their trips, they show the confirmation number and their identification and receive paper tickets then. Soriano said 97% of PinoyTravel’s customers use this method to pay.
A ferry-focused future
Up next for Soriano and her team of eight at PinoyTravel is ferry ticketing. Soriano said she sees this as a major market opportunity, and they’ve already begun offering reservations for several ferry companies. Given that there are thousands of islands in the Philippines, Soriano sees enormous potential in this area.
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“Ferry is something we will actively pursue in 2017, so I’m transitioning my time from bus to the ferry industry now. We hope to dominate that industry as well,” Soriano said. The potential for user and revenue growth in this area is so strong that Soriano is willing to travel frequently to meet with the heads of ferry companies, many of whom are based in Cebu City. She said these executives tend to prefer face-to-face meetings, and she’s willing to accommodate them if it means PinoyTravel can achieve the rapid growth she envisions.
Because many of the potential users are low-wage workers, Soriano said PinoyTravel is working on an entirely different approach than it uses for bus companies. It’s creating kiosks that can be set up in different markets, where people can pay cash to receive paper tickets. Many of these people do not have access to smartphones or computers on a regular basis, so the online system that works for bus tickets doesn’t fit with the ferry market, she said.
Looking ahead, Soriano plans to hire more staff and expand PinoyTravel’s user base. She expects to see reservations increase from 500 to between 5,000 and 10,000 (from buses and ferries combined) within the next year.
Soriano said that the company has not taken any investment money, but that it has broken even and has been able to pay salaries and business expenses out of its revenues. She’s open to investments, however, and is focused on growing the business and increasing its valuation.
“It’s one of the things I’m really proud of, that we were able to get this far without getting external money,” she said.
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