When Pravin Gupta, 21, last visited Bengaluru for an internship, he failed to visit some of the spots on his wishlist as public transport was time consuming and hiring a cab expensive. “But this time, I can visit several places on the same day as I now have this bike,” Gupta says, showing the black Avenger that he rented through a bike-sharing app.
Such apps, which are now providing services in most metro cities in India, have opened an avenue of transport that is not only time friendly, but also affordable. While a motorcycle, on an average, is available for Rs 70 per hour, a bicycle can be rented for as little as Rs 5 per hour.
In India, several bike-sharing start-ups are operational for some years, but it’s now that the big bucks have started to pour in. Ola recently agreed to invest $100 million in scooter-sharing start-up Vogo. It is reportedly in advanced talks to raise $10-12 million from new investors, such as Kalaari Capital, and the existing ones. Bounce, another such start-up, is on track to raise $50 million, according to a report. Other key players in the field include Yulu, China's Mobike and Ola Pedal.
The two firms, Vogo and Bounce, and Gurugram-based cycle-sharing company Mobycy had raised funds in August too. While Bounce raised $12 million from Sequoia Capital, Accel Partners and others, investors led by Ola pumped in roughly $8 million into Vogo.
Bounce, which rents motorcycles, electric-bikes and cycles, claims to be managing over 10,000 rides every day. Mobycy says its cycles clock over 100,000 rides every month.
However, the same period saw a couple companies
— China’s Ofo and Zoomcar’s PEDL — winding up operations in India. Ofo stated cash-crunch as a reason. Zoomcar has reportedly discontinued operations in order to upgrade its cycles.
Ofo’s India assets have been acquired by Bounce. The terms of the deal are undisclosed.
Globally, the shared-bike market was estimated to be worth $1.49 billion with over 209 million users in 2017. According to an iMedia Research report, the number of users would have climbed to 289 million by the end of 2018. For 2019, the report estimates a total number of user at 376 million, with a market size of $3.43 billion.
China is the leading market for the bike-sharing industry. But, India is now seen as the next growth hub as the country looks for solutions to congestion and pollution.
The opportunity is especially huge for the cycle segment as the central and state governments have vowed to aggressively expand cycle infrastructure under the Smart City Mission.
A major positive for the sector has been the steady rise in prices of motorcycles and scooters. This has raised the cost barrier to owning a mobike and subsequently made renting more lucrative.
“Keeping congestion in mind and also the small real estate required for two-wheelers, we see that two-wheelers are the natural and most-preferred mode to commute in India,” says Vivekananda Hallekere, co-founder of Bounce.
Furthermore, he says, as only 18 per cent of India's population has access to personal mobility, start-ups in this field are bound to gain traction.
Echoing Hallekere’s views, Amit Gupta, co-founder and CEO of Yulu, said: "India is a large and untapped market for shared micro-mobility."
Going by China, where the market has already passed the initial stage, finding the right dock points, and retrieving investment are major issues. While the ones providing dockless service do not have to worry about the former, they face a serious problem of theft and vandalism.
Lack of infrastructure is another hurdle, especially for cycles. Besides, extreme weather and air pollution tip the balance in the favour of car-sharing services.
The renting lesson
How to use?
Download the app and upload asked documents. Locate and reach the docking point on the map. Book a ride to receive an OTP. Enter the OTP on the keypad attached to the vehicle to unlock it. When done, park it at any of the docking stations nearby
You need to upload a photograph of your driving license. In the case of Metro Bikes (Bounce), you also have to upload a selfie
What is the rate structure?
Vogo charges at Rs 1.2 per minute for a motorcycle, but it goes up after an hour's duration. For bookings exceeding 48 hours, the user is charged at Rs 200 per day (not inclusive of fuel cost)
Metro charges at Rs 5/km + 50 paise/minute for short distances. For longer distances, you can rent a motorcycle, charges for which depend on the choice of vehicle
Short trip charges are inclusive of fuel cost
Modes of payment
Both the firms accept payments only through credit/debit cards, online banking, UPI and mobile wallets
What if there is an accident?
Vogo provides full wrap third property liability insurance. For damages to the motorcycle, both the companies
hold users responsible for repair
In case you do not park the vehicle at a docking station
Vego charges Rs 100 if the vehicle is parked within 5 km of the docking point. Otherwise, fine goes up to Rs 500