How India Became The World’s Capital For Bike Taxis, Scooter Rentals? (2023)

79% of all vehicles sold in India during 2018 were scooters and the country is home to the largest bike-sharing fleet in the world

The success of ride-sharing combined with high demand for two-wheelers has paved the path for bike taxis in India

Are bike taxis the future of last-mile mobility and short commutes in India?

Gone are the days when commuting by roads in India was a peaceful experience with no horns or traffic jams, as it was purely dominated by hand-pulled carts, rickshaws, and lorries. Over the years, not only has India’s road network expanded and improved, the number and variety of vehicles on them has witnessed a manifold increase.

Buses, cars, auto-rickshaws, and two-wheelers jostle for space and inch forward snail to their destinations in almost every Tier 1 and Tier 2 city in India. Thanks to the introduction of radio cab services, this number has only increased, as private vehicles have given way to cabs. Even amid the auto slowdown, traffic and congestion remain a major issue in most metros.

Therein lies a deep-rooted pain point with radio cab services which remained unaddressed for years. The cab aggregators increased the number of vehicles on the road, thereby addressing the shortage of supply. However, when people wished to commute within a range of 5 kms from their location cab drivers are not always keen on taking the passenger due to the low income. Secondly, congestion has made navigating shorter distances even worse than longer rides. This resulted in the need for a smaller, faster, cheaper and more convenient mode of transportation, thereby setting the ground for the micro-mobility market in India.

The Institute for Transportation and Development Policy (ITDP) stated that scooters have been the most popular vehicle in India, with 79% of all vehicles sold during 2018 being two-wheelers. It further said that their ability to weave in and out of busy traffic and inexpensiveness (relative to a car), have made two-wheelers a dominant feature of the Indian urban mobility landscape.

So naturally, the shared mobility revolution picked up India’s love for two-wheelers along the way and bike-sharing and rentals have become a huge growth area within the transport tech and mobility sector.

The Boom In Bike Taxis

The success of the cab aggregator business model along with a high demand for two-wheelers have paved a path for bike taxis in India.

Inc42 earlier reported that the fleet size of bike-rental apps in India stands at over 15K vehicles, which is even higher than the developed economies of the US and other Western countries. The surge in the bike rental fleets was not limited to India, as in 2019 the global bike rental fleet more than doubled in size from 25,000 to 66,000 vehicles.

Meet The Players

Ola Bike was first introduced in 2016 as a last-mile mobility solution in Gurgaon, Faridabad, and Jaipur, and is currently present across 200 cities and towns. The company stated that the introduction of Ola Bike stems from Ola’s commitment to extend seamless mobility solutions across the country and bridge the gaps within India’s mobility ecosystem.

In September 2019, Ola announced the expansion of its Ola Bike offering to 150 cities across the country. It said that while the likes of Hyderabad and Gurgaon form large markets with a higher count of bike-partners and trips, the real potential for bike taxis lies in India’s smaller towns and cities, where people are experiencing on-demand transportation for the first time. Seen as a status symbol as much as a convenience, there has been a great appetite for app-based cab services in these smaller cities.

Ola arch-rival Uber operates its bike-taxi services across 30 cities in the country and claims to facilitate over 150K trips a day. As per reports, Uber India also has plans to increase its presence to 200 cities in the country by 2020.

In November 2019, Uber was reported to be in talks with bike rental startup Bounce to list its two-wheelers on the Uber India app, two people aware of the discussions said.

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An Uber spokesperson told Inc42, “As part of our expansion plans, we hope to take our bike-taxi service to 200 cities by 2020-end. Our goal has always been to complement public transport by integrating multiple modes of transportation and helping people commute seamlessly. In Gurgaon, for instance, 1 out of 2 UberMoto trips begin or end at a metro station, making bike taxis a convenient, reliable, affordable and safe first/ last mile solution for riders.”

While Ola and Uber also have cabs, Rapido, functioning solely in the two-wheeler rental space, actually predates Ola. Launched in 2015 and is now operational across 100 cities in India. The Rapido app has hit the 10 Mn mark in terms of downloads and claims to add new users every day.

Cofounder Rishikesh SR said moving early into this space has given Rapido the advantage. “We saw the opportunity in using bikes to provide taxi-service and use that free pillion seat to help earn some additional income for bikers, as and when they liked. By using the right technology to support this innovative idea, we launched Rapido in Bangalore in October 2015.”

Xiaomi, a Chinese electronics major recently launched the electric bike Himo T1 in China and was reported to be in talks for a tie-up with Rapido in India. Both companies denied comment on the matter.

Two Wheelers In India’s Mobility Picture

India has a vibrant network of public transport which includes buses, metros, and local trains but often the connections are sketchy and commute can often get lengthy from the home to these points of transit. This makes public transport unviable for shorter journeys and opens up markets for micro-mobility in India. First and last-mile provisions have for a long time been under catered for.

However, the biggest challenge to micro-mobility including bike-sharing and scooter-sharing schemes in India is poor infrastructure which has been strained by rapid urbanisation. Roads are full of potholes with roadsides and pavements often blocked by parked vehicles.

Ola said that being ubiquitous across India, two-wheelers are popular for being a more economical, nimble and quicker alternative to cars and buses. As one of Ola’s fastest-growing categories, Ola Bike enables first and last-mile connectivity in large cities to help manoeuvre through congested roads and a primary mobility solution in small towns, where ride-hailing options are unpredictable and unreliable.

Rishikesh from Rapido told Inc42, “The concept of a bike taxi is relatively new in India with a certain perception attached to it. There are cultural and societal challenges like sitting behind a stranger, rider safety and so on which will require a certain amount of awareness creation and we are working towards it.”

Will Bike Taxis Go Electric?

Baxi, another bike-hailing service that was founded in 2015 around the same time as Rapido, shifted its business to the hyper-local delivery model in 2018 due to increasing losses. While other startups have opted for different business models, Rapido became the first company to launch dedicated bikes for differently-abled ‘captains’ in Chennai. The company stated that close to 50 differently-abled captains are on-boarded and the aim is to reach the number 200 soon.

Alongside, Ola has been aggressively expanding its bike category across India by launching across 150 new markets in 2018 alone. 80% of these markets are smaller towns with a population of less than 10 lakhs. The company recently announced that it plans to expand 3X of its current scale and grow deeper into India’s hinterlands. Ola expects most of this new growth to come from the smallest towns and even villages, where the only mode of transport is state-run buses.

Indian cities face challenges of heavy congestion and pollution. Hence before we head towards models such as driverless cars or flying cars, what really would work in favor is the micro-mobility option. The switch to electric versions of two-wheelers can open doors to newer possibilities, provided the right infrastructure such as charging stations and government guidelines are in place.

Many companies including automotive majors are moving towards electric scooters due to the larger narrative of them being environment-friendly, but the cost savings are also a factor. Hero Electric has decided to continue its INR 700 Cr investment into the manufacturing and sale of its electric two-wheelers in India.

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Hero Electric MD Naveen Munjal was quoted as saying that even though sales of electric two-wheelers dropped in the first half of the financial year 2020, the market is expected to pick up pace in the upcoming years. The company, which only has one manufacturing unit in Ludhiana, is looking for more locations to set up another manufacturing unit that can produce 80-90K units of electric two-wheelers per annum.

Speaking to Inc42 earlier, DOT’s MD Vineet J Mehra said a fleet of 250 EVs will save around $1 Mn worth of fuel and can reduce the carbon emission by 4K tonnes annually. DOT provides electric vehicle for logistics operations to businesses such as Walmart, Amazon, Grofers, Blue Dart, DHL, Lenskart, Swiggy, McDonald’s among others.

While the use of two-wheelers in logistics is different from bike taxis or scooter rentals, the fact that most startups in this sector would want to avail the cost benefits of EVs means the future of this sector looks set to be electric.


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