Mobility startups shift gears from bicycles to e-scooters

Courtesy poor cycling infrastructure and inadequate government support, a significant number of app-based dockless bicycle rental services floated by mobility startups with much fanfare have now either wound up operations or are scaling down.

Bengaluru-based app-based micro-mobility firm Yulu told Moneycontrol that they have decided not to expand their bicycle rental services. "Yulu is currently operational in Bengaluru, Mumbai and Delhi with its electric vehicle fleet. We have our bicycle fleet (Yulu Move) in Pune and Bhubaneswar. We are not growing the Move fleet anymore, but the existing bicycles will continue to operate,” said Amit Gupta, co-founder and CEO of Yulu.

Other operators like Ola Pedal, Bounce, Zoomcar's PEDL, Ofo, Mobike and Mobycy, etc. have either suspended or wound up bicycle rental services. Vivekananda Hallekere, co-founder and CEO of Bounce, told Moneycontrol that they have suspended bicycle and scooter rentals in Bengaluru. “Bicycles need safe infra for people to ride, which is missing here," he said.

Ahmedabad-based MYBYK has a total fleet size of 10,000 pedal bicycles and is operational in six cities ― Ahmedabad (3,000), Indore (1,500), Kochi (900), Mumbai (800), as well as Nagpur and Udaipur. Next month, they will be launching services in Mysuru with a fleet of 1,000 electric bicycles. “This will be our first electric bicycle project,” Arjit Soni, founder & CEO, said. “We strongly believe in active mobility, and hence, as on date we only offer pedal and soon electric bicycles.”

Another firm Mobycy, which began as a dockless bicycle-sharing app, has since transitioned into an e-scooter/electric bicycle-sharing platform (Zypp Electric). It now has a presence in Bengaluru, Delhi, Noida, Faridabad, Ghaziabad and Gurgaon.

 ‘Public Bicycle Sharing system a different ballgame’

Yulu currently has an all-electric fleet of more than 15,000 EVs on the road. The EV fleet comprises Miracle and DeX variants and is used for both, shared people mobility as well as intra-city delivery. “Bicycles are a low-cost mode of transport for near-mile requirements and good for general fitness, and hence continue to be popular for personal use. However, when it comes to shared usage, like PBS (Public Bicycle Sharing), it is a different ball game," Amit Gupta, co-founder and CEO of Yulu told Moneycontrol.

From external factors like India’s weather conditions to cultural aspects like the social acceptability of cycle in different scenarios to operational aspects like the need for repair and maintenance (as a cycle has many delicate moving parts) make it challenging to create a sustainable viable business model around it, Gupta points out. “Creating dedicated infrastructure for cycling and long-term orientation of authorities to drive adoption and usage is essential for PBS to be effective.”

Further, e-scooters take away the effort needed to pedal a cycle, offering a more comfortable ride. “Yulu has seen healthy growth for its Low-Speed EVs (LSEVs). LSEVs fulfil diverse use cases and cut across multiple user demographics for daily mobility needs. Our EVs are used both for shared people mobility as well as by delivery agents for last-mile deliveries,” he said.

By offering not just products that are specialised for the needs of these segments (DeX is Yulu’s product targeted towards delivery executives and comes with a carrier for carrying the delivery bag) but also solutions (eg: weekly and long-term rental packs with free battery swaps for those who use it for business needs), Yulu, according to Gupta, has been able to nurture and grow both these broad use cases. “We believe there is substantial potential for both these segments to grow and over time we see sub-segments emerging within these which we will serve by creating more nuanced and sharper solutions,” he said.

 Lack of govt subsidies a problem

While the demand for bicycles is great, in the absence of government subsidies (which are available for electric bicycles), pricing is an issue, Arjit Soni, founder & CEO of MYBYK said.

“For instance, in a city like Ahmedabad where we have not received any financial subsidy, our pricing is at Rs 600-700 per month and hence growth is less when compared to Indore where we have received a subsidy and our pricing is Rs 450/month. We are growing by 50-100 cycles every month,” Soni said.

Electric bicycles, Soni points out, offer all the benefits of electric scooters. One can use them in throttle mode and get the same speed of 25 kmph. Additionally, one can pedal the bike when the battery runs out or when one wants to ride for health and leisure. “The most fun and engaging mode is the pedal-assist mode wherein one can pedal and the motor assists pedalling to reduce effort. So if you look at it, electric bicycles offer all the benefits of a scooter and a cycle and are 40-50 percent cheaper than a low-speed scooter, as well as 40-50 percent lighter, and have lower operating costs.”

According to Soni, it is not bicycles that have failed against scooters. In a city like Bengaluru for instance, he says, both have failed to succeed in mitigating the first-and last-mile connectivity issue for a variety of reasons.

“Firstly, unlike in the case of EVs, there are no financial subsidies/incentives. Secondly, investors are not looking to finance pedal bicycles because the players in Bengaluru did a miserable job in operating and maintaining them, and hence, there is a perception that cycles do not work. Thirdly, the lack of dedicated infrastructure is a big hindrance to the adoption of cycles. It is ironic that in cities where there is more acceptance of micro-mobility solutions, there is no road space left to ride them safely. And cities where there is some road space left for micro-mobility solutions, the traffic problem is not as acute and the public transport adoption hence, is not as high as to encourage more people to switch.”

 More riding effort, lower social acceptability of cycles

Confirming that the bicycle-sharing system in India is on the downswing, Akash Gupta, co-founder & CEO of Zypp Electric says riding a bicycle demands greater rider effort and can be challenging given the country’s weather conditions.

The firm is running battery-operated smart bicycles which are popular among agents for short-distance deliveries and IoT-enabled electric scooters for distances more than five kilometres.

“Our experiment with battery-assisted bicycles has been taken well by delivery executives, USP being its affordable rentals which ensure higher savings for them. Our partners like Zomato, Zepto have onboarded a lot of bicycle-enabled delivery executives for macro distance deliveries from their dark stores and outlets,” Gupta said.

Riding an electric scooter, on the other hand, requires less effort and is more suitable for delivery agents who’d want to make multiple stops. “Multiple deliveries require longer battery life and a power-packed motor which electric scooters offer, and we have seen delivery executives saving enough on commute to earn more than ₹35000 per month.” There is also the social acceptability factor of cycles and the perception of it being associated with low-income groups. “It’s one of the reasons why adoption of electric cycles is not as expected in our country. It’s quite an aberration when compared to western markets where cycles are a social status symbol.”

Looking at the growth of EV sales in India, Zypp Electric is certain that electric scooters have been well trusted by regular users for their commute – both by those who buy for personal use and delivery gig-workers who use them to cut down on petrol costs and maximize earnings. “We have grown to 10,000+ EV adoption on our platform and we are getting more and more requests from gig workers who use these EVs for their earnings and transition from low-paying jobs to delivery jobs. Commuter adoption will still take more time in India while for gig executives it helps them save a lot more going electric vs riding ICE vehicles," said Gupta.

 ‘Demand for bicycles in food delivery segment stagnant’

Mumbai-based e-scooter company eBikeGo is currently operational in five cities ― Bengaluru, Mumbai, Pune, Hyderabad, and Delhi-NCR. According to Hari Kiran, co-founder & COO, the demand for bicycles is majorly in the food delivery segment, which is stagnant, as per their research. “I believe there is no cost benefit in sharing and the maintenance of bicycles and infrastructure is neglected. The demand for electric scooters is increasing given the cost-benefit that is there for gig workers and the year-on-year increase in last-mile delivery.”

 Preference for shared autos over cycles for long distances

Padmanabhan Balakrishnan, co-founder & COO of Vogo, which operates more than 5,000 e-scooters in Mumbai, Bengaluru, and Hyderabad believes that while dedicated cycling infrastructure is an impediment in bigger cities, in smaller cities para-transport rules the roost.

“The easy availability of shared autorickshaws, minivans and tempos at low prices (Rs10-20 a ride), makes it a lot less compelling to rent a bicycle, especially for longer distances in smaller cities,” he said.

Electric rental scooters have gained popularity in India over the past few years and have seen an explosion in demand since 2022, according to Padmanabhan. “The global surge in demand for EVs has meant that Vogo has not been able to keep up the supply and build our network as quickly as we would have liked to. Currently, we are short by at least 10,000 e-bikes for our markets.  At Vogo, we primarily look at first- and last-mile passengers from public transport, such as buses, metros, local trains, etc. Most of our users are urban commuters (office goers and college students) looking for a quick, efficient, and cost-effective way to travel short distances connecting their main mode of public transport.”

In Mumbai, for example, he says, 50% of Vogo rides either start or end at a bus stop, and in Hyderabad, 80% of rides start or end at a metro station. "Vogo is positioned as a first/last mile solution brand, and so we focus on attracting a relevant audience for this. Our single-minded focus is to decongest cities by increasing the use of public transport systems and Vogo plays an important role in the seamless door-to-door journey".