In a few years from now, the sight of a delivery guy from Amazon, Flipkart, Zomato, Swiggy or any other e-commerce firm, astride a petrol-run motorbike or a scooter will become a rarity. Instead most of them will be seen riding a modest, low-speed, battery operated e-bike wearing a Yulu badge.
That’s the plan Amit Gupta, founder Yulu Bikes is stitching up as he seeks to offer an affordable ride to close to a million plus gig workers employed by the e-commerce firms for home delivery services, over the next few years. According to Gupta, close to 80 percent of people in India don’t have a driving license and not many can afford a bike or a scooter as they don’t have the requisite credit history. This is the white space Yulu is targetting.
“Yulu has been very instrumental in creating a livelihood for the marginalized in this country,” says Gupta pointing out that the company has been able to offer a mobility solution that plugs the last mile at an affordable way in a sustainable manner. The user has to download the Yulu app, locate its e-bike, scan the QR code and start the ride. The rider pays as per time used but it averages to Rs10 per kilometer.
The whole model – which allows users the flexibility to “pay as you use” basis leaving aside the headache related to ownership including maintenance, EMI, etc fits very well with the complex delivery and supply chain mechanism of e-commerce firms.
The tech-based mobility service provider has seen the number of monthly active users increase to 170,000 from 100,000 in February 2020 and business grow 2.6 times in the same period. The four year old start-up which began operations with a view to offer sustainable affordable last mile mobility solutions through its e-bicycle now boasts of a 10,000 strong fleet of e-bikes and plans to double it by end of this year. In addition to those using the e-bikes for short commutes from one point to another during the pandemic, the demand from the gig workers has been very encouraging.
The company, in which Bajaj Auto has an 18 per cent stake, is now looking to deploy a model Yulu DEX designed specifically to suit the needs of the gig workers. Bajaj is also developing a new low speed e-bike ground up for personal users looking for a mobility solution for the last mile. It is expected to be launched some time in FY22. Since it entered the market in 2017, Yulu has been importing kits for the bike from China and Bajaj has been assembling them at its factory.
Till date, Yulu has invested $22.5 million dollars. Bajaj is expected to participate in the next round of fundraising. “They (Bajaj) will see the advantage of this partnership only next year after the launch of the 3rd generation model,” said Gupta.
The central and state governments have been doling out incentives and tax exemptions for battery operated vehicles. It is a part of the larger objective laid by the government to reduce dependence on fossil fuel and reduce carbon emissions. But Yulu is not a beneficiary of these incentives owing to the low speed e-bikes in its fleet. Only those e-two wheelers which have a top speed of more than 25 kilometer per hour are eligible for the incentives under the FAME II scheme. Gupta and his team have been lobbying with the government to get subsidies on batteries. He insists the policymakers have to look at a company like Yulu, which has covered 60 crore kilometers since its inception four years ago, “from a different lens.”
The market for two-wheel EVs (E2Ws) and three-wheel EVs (E3Ws) was valued at around $97 billion or 4 percent of global auto sales in 2019, according to McKinsey. The sector comprising small format vehicles that includes e- two wheelers and three wheelers are increasing by more than 14 percent annually. This excludes sales in China, which was an early adopter of small-format EVs and is thus experiencing slower growth. By 2022, McKinsey expects sales of small format vehicles to reach $150 billion.