After a dry spell of nearly two months, bike rental startups are now gearing up for growth with new models, pivots and even a focus on changing the unit economics. The likes of Rapido, eBikeGo, Bounce and other two-wheeler sharing and rental companies are now experimenting with newer models to boost revenue.
The most common pivot in the sector has been to a subscription-based model rather than an on-demand rental model. Bounce decided to pivot to subscriptions, not just to keep its operations running, but also to help the customers feel safer while traveling. Vinay Rotti, senior vice president at Bounce, told Inc42 that the company noted 3500 subscription enquiries for long-term rental services within the week of its launch. Currently, it is currently catering to 30% of the total ride-hailing traffic from both long term subscription and bike taxi model.
The company is restarting its services in a phased manner in Bengaluru and Hyderabad. Currently, it is catering to 15K rides daily, noting a drop from 1.30 Lakh rides before the lockdown. Rotti clarified that the company had limited its services, keeping in mind the government’s directives and the safety of its users.
And the subscription model is here to stay, said Rotti. It has distinct advantages over on-demand or time-based rentals, especially in light of the Covid-19 scare in the public and it’s also financially viable. “It allows people to have access to a personal vehicle without either the financial commitment or maintenance hassle. Coupled with the current need for social distancing, we feel it will have a lot of acceptance, especially among daily/regular commuters as this allows them temporary ownership of the scooters,” he said.
Similarly grabbing on to the opportunity is Amritsar-based B2B electric bike rental company eBikeGo which has also extended its bike rental services for individuals, taking a minor pivot to B2C. The company had started its monthly subscription model in 2017 for B2B partners like Zomato, Big Basket, Delhivery and others. The company also said that as long as social distancing is a top priority for people, their transportation choices will need to be customised according to these norms. The company’s subscriptions start at INR 3,300 per month.
“Social distancing is difficult to do in public transport. Public transport is the trickiest part for contact tracing if needed. You know with whom we are meeting at the office or home. But you have no clue on the bus or train. Considering this factor, we thought this is the right time to open up our subscription model for a wider audience,” Irfan Khan, CEO and founder eBikeGo said.
Rapido Goes For Deliveries Over Subscriptions
Even as many bike rental startups are changing to the subscription model, Rapido has stayed away from it. Since the company does not own its fleet and utilises partners just like in cab-hailing, it is keen on utilising its partner network efficiently. And hence, Rapido has moved into last-mile logistics service for retailers and app-based hyperlocal delivery providers. Besides this, the company is skeptical about the growth of the subscription model in the current scenario.
“Everybody cannot afford to buy a subscription for a rental and would prefer a requirement-based ride availability. Factors like work from home, social distancing, limited travelling makes the subscription-based model less desirable. Customers will benefit more from taking rides as per requirement,” Pavan Guntupalli, cofounder of Rapido, told Inc42.
The company not only partnered with more food and grocery delivery companies — BigBazaar, Big Basket and Spencers, along with Delhi and Karnataka government — to mend the disrupted supply chain during the lockdown, but also extended its own hyperlocal service, Rapido Local, to Bengaluru, Kolkata and Hyderabad.
Under this, the customers can request pick up and drop of food, grocery and medicines on the app. With this the company aimed to boost the utilisation and revenue of the riders, known as captains, on roads. The company further aims to expand the Rapido Local services to the 100 cities it is operational in.
Guntupalli added that it has resumed bike-hailing operations in close to 100 cities and has been seeing a good demand for it, especially in the Tier 2 and Tier 3 regions. He emphasised that bike taxis are a more open and personalised way for intra-city travels, and pose less chances of exposure to any infection due to their “limited interaction with the capital and less touchpoint”.
Earlier this week, the Bengaluru-based startup also launched Rapido Stores to allow both online and offline businesses to deliver products to its customers. Rapido has onboarded more than 200 small and medium enterprises (SME) so far. All this is running alongside Rapido’s original bike-hailing business.