How this EV start-up is transforming the business of last-mile connectivity

The metro rail in Delhi has had a transformational effect on the city, but the credit does not go to it alone. Had it not been the network of feeder buses and the variety of rickshaws providing the last-mile connectivity, its reach and ridership wouldn't have been as large as it is today. 

Realising the potential in regularising the highly unorganised sector and keeping the future of mobility in mind, Goldie Srivastava in 2014 started SmartE, an e-rickshaw service currently plying in the Delhi-NCR region. The start-up's parent Treasure Vase Ventures recently raised Rs 100 crore in Series B funding from Japan’s Mitsui and Co.

The start-up's working is similar to that of ride-sharing services, except that all vehicles are owned by the company and its mobile app is not the only way to book a ride (passenger can directly approach the three-wheeler and get a seat).

Srivastava says the company has a fleet size of 1,000 and clock a daily average ridership of around 100,000.  

What's interesting about SamrtE is the way it utilises its resources. As the ridership dips during the non-peak hours, the company employs part of its fleet to make last-mile deliveries. It has partnered a few online grocers and claims to be making around 2,000 deliveries a day. 

The revenues come from two different segments — charges paid by the drivers, and income from hyperlocal ads. The founder says drivers are charged on four different accounts — vehicle rental, charging fees, maintenance charges and commission for generating demand (getting them passengers).

The company sees good revenue potential in ads as well given the hyperlocal nature of its service and the user data it generates.

The biggest positive for the company is that cities and their public transport systems will continue to expand and along with it will grow the demand for last-mile connectivity.  According to Srivastava, India’s last-mile connectivity market is worth $42 billion and is growing at a CAGR of 11 per cent. 

But competing with the unorganised sector won't be easy given the substantial difference in capital and operational expenses. Srivastava says currently the unorganised sector takes many illegal routes to save on costs, including running unregistered and uninsured or even un-approved vehicles. On the operational front too, many employ illegal means to save on power costs.

SmartE is banking on its superior services, especially in the aspects of commuter safety and reliability, to compete with them. 

Non-standardisation of charging points and a nascent supply chain of e-vehicle parts are other challenges faced by SmartE.

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