After 2016 Debacle, OLA Relaunches Bike Taxis In Bengaluru

India’s largest cab aggregator, OLA, relaunched bike taxis in Bengaluru on Monday (February 4), after it had discontinued services in 2016 following a directive by transport authorities in 2016.

Since its inception, bike-taxis have been fighting stringent regulations in India. In 2016, Karnataka had ruled that bike-taxis as illegal and also seized a few bikes operating under Ola. According to the Motor Vehicles Act, 1988, enforced in Karnataka, a two-wheeler is considered to be private transport. To run a service like Ola Bike Taxi the vehicle needs to be licensed for commercial use.

Central government issued draft guidelines in December 2016 that allow state governments to draft their own transport regulations. Following this development, many Indian states such as Telangana, Rajasthan, Haryana, Goa and Uttar Pradesh have authorised the operation of bike-taxis.

Last year in December, OLA entered into a strategic partnership with Bengaluru-based Vogo, a bike sharing network, by investing $100 Mn (INR 712 Cr) in their latest funding round. “Vogo’s offerings will also be available for Ola’s more than 150 Mn customer base, directly from the Ola app,” Vogo had said in a press release at the time.

Meanwhile UberMoto, Uber’s bike service, has been expanding rapidly in India with its bike taxis operating in 11 cities in India and 12 cities in the South Asia region.

Other competitors in the sector are coming up with innovative ways to tackle transport regulations. Gurugram-based, Baxi shifted to hyper-local delivery and has partnered with Mother Dairy and Patanjali. This company has also rebranded itself as B-Fresh.

According to a Statista report, India’s two-wheeler vehicles is the most popular vehicle category with 20 Mn sales to domestic customers in 2017-18.

Recent investments in the sector:

• Peer-to-peer ride-sharing service in Bengaluru, Rapido raised $10 Mn in a funding round led by Hong Kong-based Integrated Capital in January 2019.
• Indonesia-based hyperlocal transport startup, Go-Jek announced its Series F funding round led by Alphabet’s Google, JD.com and Tencent Holdings this month (February 2). Company has set up base in India and is said to be mulling a launch this year.
• Bengaluru-based Bike and scooter rental platform, Bounce raised over $7 Mn in a Series B round. Chiratae Ventures, Accel India, Sequoia India and On Mauritius participated in this Series B round.