Bike-sharing platform Yulu, which assembles its own electric vehicles through partnerships with original equipment manufacturers (OEMs), is planning to ramp up its business by focusing more on the hyperlocal delivery segment and long-term bike subscriptions.
Yulu CEO Amit Gupta said that the startup plans to add 1 lakh electric vehicles on the road by end of 2021 and introduce its service in new cities as well.
Yulu had raised $8 million from Bajaj Auto Ltd last November. Currently, the Bengaluru-based startup imports components for its electric scooters before assembling them in India. It plans to build its own electric scooters in partnership with Bajaj Auto from next year.
Yulu is also turning its focus on providing bikes for long-term rentals starting from seven days up to 60 days as most users now prefer their own vehicles over rented vehicles for commuting.
The pandemic has forced mobility startups like Yulu to depart from their earlier bike-sharing model to a long-term rental model. But Gupta maintains that this shift is “temporary” as he expects users to pick up bike-sharing products in the near future once offices and IT parks open up.
“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,” Gupta said.
Yulu’s decision to focus more on long-term rentals comes at a time when sales two and four wheelers have plummeted drastically in the country ever since the lockdown in March.
Even as car and bike sales have declined, consumers have been flocking to purchase second-hand vehicles during and after the lockdown. According to a survey conducted by used vehicles dealership platform Cars24 in April, 46% of respondents said the pandemic has reduced their budget for fresh purchases and of that 50% said they will purchase pre-owned vehicles once the lockdown is over.
Yulu plans to allocate around 15-20% 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% of the startup’s current usage still comes from the bike-sharing model.
The mobility startup also has plans to allocate a good chunk of its fleet for delivery workers who ply regularly from point A to B, which makes for an impeccable use case for Yulu’s EVs.
“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,” Gupta said during the phone interview
Yulu’s bullish expansion comes at a time when India has been gradually opening up its economy after a three-month lockdown to contain the spread of covid-19. During this time, urban mobility and vehicle rental startups such as Drivezy, Bounce, and VOGO were forced to hive off most of their bikes and cars due to a severe drop in demand for public commute and vehicle rental services.
Drivezy is looking to liquidate around 30% of its 15,000 two-wheelers and part of its four-wheeler fleet due to mounting debt and falling demand, Mint recently reported. Bounce, which raked in most of the funding in the micro-mobility space in 2019-20, is also hiving off around 8,000-10,000 of its scooters to the second-hand market.