[Editor's note: this post was originally published on the Acumen Fund blog]
I recently received Dial 1298 for Ambulance’s first newsletter. 1298 is an ambulance service in Mumbai. In 2007, Acumen Fund invested a $1.5 million for an equity stake in 1298, to fund expansion of their service. Since then, 1298 (the number you call when you need an ambulance) has grown faster than expected in Mumbai and is already expanding their service to two new districts in Kerala. The company has captured a lot of press attention, with coverage from the Economic Times, DNA, the Hindustan Times, and others. 1298 currently has 51 ambulances which have taken more than 50,000 trips since inception. The service is world-class, modeled on the London Ambulance Service (down to the forms the paramedics fill out on the ambulance).
Before 1298 launched its service, Mumbai had only about 12 working ambulances that fitted with intensive care equipment (which were primarily linked to specific hospitals); 9 out of 10 trips were to transport dead bodies. These weren’t ambulances; they were hearses.
1298 is one of a number of Acumen Fund investments that defies easy classification. The operating ˜special purpose vehicle” organization is structured as a for-profit business. This business uses cross-subsidies (the rich customers pay more for ambulance rides; the poor pay less or nothing) to achieve a social mission. And the supervising umbrella organization “Ambulance Access for All Foundation” is a non-profit. (Got it?)
The cross subsidy model is simple and ingenious. Patients who want to go to a private hospital in a full-service ambulance – staffed with a doctor – pay 1,500 rupees (about US$35). Those who go to public hospitals pay either half price or nothing. This way, it’s not up to 1298 to decide who can and cannot afford to pay. 1298 is committed to a social mission of having 15-20% of the company’s calls be free or reduced cost.
Why all this complexity? Mumbai is a giant, teeming city with unbelievable wealth and extreme poverty. 1298’s structure and social mission allow it to offer ambulance service for all in a financially sustainable manner. So now, anyone in Mumbai who needs an ambulance can dial 1298 and, thanks to the magic of GPS and Google Maps, one of 51 world-class ambulances arrives in about 15 minutes to provide care and transport. Wow.
So what is 1298? Classifying it as a “social enterprise” seems to sell it short, since 1298 is becoming the provider of ambulance service for all of Mumbai, a city of 22 million people. However, because of its social mission, 1298 now finds itself the recipient of donated ambulances from non-profit ambulance services that were not financially viable. By combining world-class operational skills with a social mission, 1298 can take on private invested capital (from the likes of Acumen Fund) as well as donations in kind from individuals and NGOs. Their social mission allows them to partner in ways a profit-maximizing business venture never could.
It is easy, seeing 1298’s success so to date, to underestimate what 1298’s founders, Shaffi Mather, Sweta Mangal, Ravi Krishna, Naresh Jain and Manish Sancheti, have accomplished. As co-founder Ravi Krishna described when we met a few months back, “Doctors told us we were insane to try this. Others said it was impossible. When I heard this, I knew we couldn’t go wrong. What’s wrong with an insane man trying to do the impossible? You have to succeed more than people say you will. And now everyone wants to copy us.”
Replication in other cities is now front and center for 1298; hopefully, their success will serve as a model to others interested in creating a new mold of what enterprises can accomplish to bring service to all.