IBEF: August 10, 2020
Yulu, a bike-sharing platform, which assembles its own electric vehicles through partnerships with original equipment manufacturers (OEMs), is planning to expand its business by focusing more on the hyperlocal delivery segment and long-term bike subscriptions.
Yulu CEO, Mr Amit Gupta said, “The start-up plans to add 1 lakh electric vehicles on the road by end of 2021 and introduce its service in new cities as well”.
In November 2019, company had raised US$ 8 million from Bajaj Auto Ltd. Yulu plans to manufacture its own electric scooters in partnership with Bajaj Auto from next year in India, although it is currently only assembling them after importing its components from other countries.
It is also focusing on offering bikes for long-term rentals starting from seven days up to 60 days, as most users are opting for their own vehicles over rented vehicles for commuting.
This is also the effect of ongoing pandemic, that has forced mobility start-ups like Yulu to change from their earlier bike-sharing model to a long-term rental model. Mr Gupta believes that this shift is “temporary" as he expects users to pick up bike-sharing products soon once offices and IT parks open.
“If you look at India’s automobile market, historically it has had very low consumer ownership penetration. Out of every 1,000 people in this country, only 35 of them possess their own car. Hence, we believe that demand for such long-term plans will only exist for the next 3 to 4 months, which will level out once workplaces open-up," Mr Gupta said.
The sales in two and four wheelers segment have plummeted drastically in the country ever since the lockdown in March.
It is seen that consumers are shifting towards purchasing second-hand vehicles during and after the lockdown. As per the survey conducted by used vehicles dealership platform Cars24 in April, 46 per cent of respondents said the pandemic has reduced their budget for fresh purchases and of that 50 per cent said they will purchase pre-owned vehicles once the lockdown is over.
Yulu intends to allocate around 15-20 per cent of its 8,000 strong EV fleet to the subscription product and users also have the option to get the vehicle delivered at their doorsteps. However, 80 per cent of the start-up’s current usage still comes from the bike-sharing model.
It also plans to allot a good chunk of its fleet for delivery workers who moves regularly from point A to B, which makes for a perfect use case for Yulu’s EVs.
Mr Gupta further added, “By 2021 we have plans to co-create a specific mobility product for delivery workers, and configure a bike just for them, and eventually we will look for a business model in this segment as well".
This expansion comes at a time when India has been gradually opening its economy after a three-month lockdown imposed by the Government to contain the spread of COVID-19. Urban mobility and vehicle rental start-ups such as Drivezy, Bounce, and VOGO were forced to hive off most of their bikes and cars during this time as there was a severe drop in demand for public commute and vehicle rental services.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.