With city roads growing steadily more congested, commuters in metros have begun trying out new modes of transport for daily commutes, especially for last mile connectivity. Cashing in on the opportunity, a flurry of motorcycle and bicycle rental start-ups have sprung up in across the country and investment is beginning to pour in.
Utilising a host of new technologies like data analytics, machine learning and IoT to beef up capabilities, these firms have begun differentiating themselves from their larger peers by offering more flexibility and more attractive pricing. Most have also effectively minimised human interaction at the front end, adding another layer of differentiation.
Wheelstreet, a two-wheeler rental startup has gone the IoT way to make things easier for its customers. “There is an IoT device attached to the bike that helps riders control everything from speed and clutch to brakes,” points out Pranay Shrivastava, co-founder & CEO.
These firms are taking the fight to dominant market players like OLA and Uber by providing significantly cheaper options, with rides as low as `5 per km. Manufacturers have already caught on to the opportunities provided by these firms with big names in the industry like Honda and Mahindra already partnerships with bike rental players like Drivezy and Bounce. Honda for example, supplied 3,000 scooters Drivezy to operate in Bengaluru and Hyderabad, including popular models like the Activa 5G and CLIQ.
Announcing the partnership, Honda Motorcycle and Scooter India’s Yadvinder Singh Guleria noted that, “high utilisation of the asset - that is the two-wheeler itself, is the key to the success of this business model”. Honda has not limited itself to one such tie-up, with another deal signed with VOGO in September to roll out scooter services in Bengaluru and Hyderabad.
In fact, the manufacturer now has a partnership with over 30 shared mobility players in cities like Delhi, Mumbai, Hyderabad, Kolkata, Jaipur, Kochi, Ahmedabad, Gurgaon and Bengaluru. Mahindra is also exploring similar strategies. Partnerships with such rental firms and increasing penetration into smaller towns are only set to increase sales for these manufacturers.
Bounce’s CEO and co-founder Vivekananda Hallekere points out that the driving trend for these startups has been dockless ride-sharing systems, where “one can pick up a two-wheeler from anywhere and drop it off at any legal parking place. In cities where there is metro connectivity, the problem is the first mile and last mile connectivity”.
The growing demand for these services begun attracting investments from well known investment houses into these platforms. In just August this year, the Bengaluru-based Bounce raised $12.2 million in a Series A round from investors like Sequoia India and Accel Partners. Accel had been one of the major investors in firms like OLA and Flipkart, two of India’s most successful startups.
Meanwhile, OLA has also seen an opportunity in such firms offering last mile connectivity, turning the lead investor in a $7 million Series A funding round for VOGO, with other investors like Stellaris Venture Partners and Matrix Partners India also participating. VOGO also received funding from Pawan Munjal, CMD and CEO of Hero MotoCorp.
It isn’t just motorcycle rental services that are booming. Bicycle sharing apps are catching up, with funding beginning to trickle in. Bicycle rental company Mobycy had raised an undisclosed amount from Venture Catalysts in November this year, with discussions on to secure more. DriveZy meanwhile, is in talks to raise another $20 million in its next round.
Increasing support
Over 30 mobility firms in major cities have tie-ups with Honda for supply of two-wheelers
Bengaluru-based Bounce raised $12.2 million in a Series A round from investors like Sequoia India and Accel Partners this August
VOGO received $7 million in its recent funding round with OLA leading the pack of investors. Pawan Munjal of Hero MotoCorp has also become an investor in the bike-rental firm