DriveU, an on-demand driver service, has raised funds from Unitus Seed Fund, a move that will help the company compete with taxi-aggregators like Ola and Uber.

While the Bengaluru-based company declined to disclose the investment details, sources said Unitus has pumped in about $1 million (about Rs 6.8 crore).

Instead of hiring cars/cabs, DriveU allows users to hire drivers on the go, DriveU said, adding it will use the funds to expand operations to more tier I and II cities.

DriveU commenced its operations in July 2015 and is currently offering services across 4 cities — Bangalore, Chennai, Mumbai and most recently in Delhi.

“Imagine not needing a car, because you already have your own — but just a reliable, background-verified, on-demand driver, for your weekday commute or simply for attending social events. That’s the gap being addressed by DriveU,” DriveU CEO Rahm Shastry said adding it allows customers to hire a part-time driver-on-demand at an affordable cost.

Interestingly, Shastry was also the first angel investor at TaxiForSure, a company that was later acquired by Ola.

A fare of Rs 99 per hour is charged and there is no surge pricing feature on the DriveU app, helping users avoid peak-hour charges.

“We ensure seamless user experience by implementing the best practices in technology, driver verification, training methods and on-road commute experience. Customer safety is of utmost experience to DriveU and we follow stringent policies to get the drivers verified by police and RTO before registering them on the system,” he said.

Shastry said there are more than 15 lakhs private cars in Bengaluru alone and 30% of the car owners are seeking drivers. DriveU will need car owners to frequently use their vehicles, which is in contrast to the so-called unicorns Ola and Uber’s philosophy of foregoing usage of personal vehicles.

It has about 250 drivers on board but aims to ramp up the number to one lakh in the next 2-3 years.

As of January this year, DriveU has served over 15,000 trips to over 6,000 customers, of which over 60% are women.

Splurging huge amounts on customer acquisition and driver retention, Ola and Uber run on the philosophy that customers can avoid using their own cars and use taxis instead at an affordable cost.

However, the potential market for DriveU still remains large as India is the fifth largest passenger-car market globally, he said.