Abstract
Oye Rickshaw is the first electric Rickshaw made in India. It is was founded in 2017 as a sequel to the family-run business and operates mainly in five locations around its headquarters in New Delhi. This electric Rickshaw is the first mass-based vehicle manufactured and has sold 10000 electric vehicles since inception. There was no competition in this segment of transportation. As the promoter mass-produced these low-cost vehicles, they built another business model of shared micro-mobility services. This service entered India’s populated roads and interiors catering to first and last-mile connectivity. In three years, the company has become one the successful start-up stories with PE funding to the tune of 84 crores INR ($12 million) and with further plans to raise another $500 million in the next three years for allied services like battery charging swapping stations and expansion to more locations.
Introduction
India’s transportation industry was all about passenger cars, buses, and heavy-duty commercial vehicles. While they were meant to cater to the organized infrastructure of India, for example transporting goods from the shipping ports to warehouses and factories, the last mile connectivity into one’s home or smaller offices and godowns were missing.
The one e-rickshaw overhauled the short commuter’s distance of individuals and last-mile connectivity for e-commerce deliveries. People could travel for as low as Rs. 15 to Rs. 20, and drivers could increase their incomes with goods deliveries. The game-changer has enabled drivers to access cheap energy, considering how the traditional fuel rising costs had made the business unviable for owner-drivers.
The Founder
Mohit Sharma, an IIT Delhi Graduate, founded Oye rickshaw in 2017. He started his career with Hero MotoCorp, the world’s largest two-wheeler manufacturing company, and was a part of the new product development department team that launched ten new two-wheeler models in 24 months. This was a great learning curve for him. Since his early days, he was interested in making products that he thought could change people’s lives. The natural progression for him then was to start his own manufacturing setup.
He started Jangid Motors with his uncle and manufactured Electric Rickshaw, India’s first indigenous product in the transportation sector. In three years, the company sold around 10000 vehicles.
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The Idea of Oye Rickshaw
Rohit soon realized that despite mass producing these low-cost electric Rickshaws, which came at an average price of Rupees one lakh, there was a significant connectivity issue. No transportation medium could connect people from metro stations, and Bus stands to offices and homes at a short distance. Thus, Oye Rickshaw was co-founded as a start-up that focussed on eco-friendly last-mile connectivity vehicles. The product was already there. The services were rolled out and became an instant hit, clocking 14k+ riders and 58K+ rides in the first five months of operations.
Business Model
The electric vehicle was built on the driver-partner program based on a similar app-based ride offered by Ola. Drivers enrolled in the program, which offered private and shared rides. This opportunity made the drivers a micro-entrepreneur of sorts where they could earn Rs. 650 per day. They also had the freedom to undertake local delivery orders for B2B and B2C brands. The founders further innovated to increase the productivity of the driver-partner by launching its energy services. This platform enabled the drivers to swap batteries at economical charges and save on the 7-8 hours required to charge an electric battery.
Source of Funding
Oye Rickshaw as a start-up raised $1 million as seed capital and $10 million as Series A funding from investors like Matrix Partners, Xiaomi, Pawan Munjal of Hero MotoCorp, and Chirate Ventures. In 2021 it got Rs. 24 crores from Venture Debt fund Alteria Capital. This mobilization is towards expanding the EV Infrastructure. Oye Rickshaw has raised a total of Rs. 84 crores since its inception. It is currently looking to put 650 battery swapping stations and is projected to reach Rs. 5 crores of operating profit per month. Oye Rickshaw is presently operating mainly around Delhi-NCR and parts of Haryana with more than 5000 driver-partners for its EV platform.
Plans
The company is presently well capitalized and looking for a 30% month-on-month growth as per the founder. However, in the next three years, they are projecting to invest Rs. 3700 crores ($500 million) in setting up battery swapping stations for electric three-wheelers across India. The existing investors will provide additional funding to the tune of $ 20-30 million in 2021-22.
The company aims to deploy 6500 lithium-ion batteries across 5000 vehicles in 2021. The Covid pandemic impacted the business where both deliveries and passenger commuting were impacted. This has resulted in the company putting more weight on expanding the delivery business. They have already been tied up by retail supermarket grocery chains like big basket and Groffers.
The main USP of this e-rickshaw business has been the low energy cost, and the battery swapping model will be the critical niche. The battery swapping business is a new concept in India, but it is the key solution to battery-driven vehicles. Despite the grand plans to move to an emission-free environment, electric vehicles have not been able to take off until now for two reasons. One is the lack of battery charging stations. Secondly, the high downtime of 6-8 hours required to charge a battery results in productivity loss. These two major deterrents look to be taken care of by the battery swapping stations as a practical and viable solution. Around 300 drivers have already onboarded the swap system shows the huge opportunity the company is envisaging. This estimation has led the company to invest in 6500 batteries which will be used for swapping with the drivers.
Wrapping Up
Oye rickshaw has 10+ lakhs registered users, and to date, the company has completed around 91 lakh rides and 55 lakhs deliveries. It has grown in just three years to have an employee base of 250+ staff and 7000+ Drivers and plans of 650 battery swapping stations. This mode of transportation is the ideal environment friendly and pocket friendly that is the need for the people of India. The driver-partner business model has given massive employment and income opportunities, especially in the delivery segment that tapped the void in the last mile connectivity faced by the stakeholders.
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