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BT Buzz: Bike rentals back in vogue as Vogo, Bounce regain 30% of pre-COVID business

To retain and sustain this demand, bike rental start-ups are emphasising on two things - one, change in business model, and the another, focus on sanitisation

Rukmini Rao | May 25, 2020 | Updated 20:28 IST
BT Buzz: Bike rentals back in vogue as Vogo, Bounce regain 30% of pre-COVID business
Bike rental firms have switched gears to long-term rentals

KEY HIGHLIGHTS

  • Bike rental start-ups are seeing a quick recovery driven by fear of using public transport
  • Start-ups have witnessed over 30% of business at pre-COVID levels
  • Longer term rental of companies is gaining traction
Even as the country has opened up partially with public transport being started in limited capacity in many cities including Bengaluru to ensure social distancing, the emphasis on personal means of transportation has taken a centrestage. Early on when the pandemic began to spread in India,  ride-hailing giants Ola and Uber were among the first to suspend their services followed by car sharing companies such as Zoomcar, Drivezy and Revv, and also scooter sharing start-ups such as Vogo and Bounce. Animesh Kumar, Director of Automotive Consulting at GlobalData points out, "The impact is likely to be witnessed beyond COVID-19. Uncertainty over recovery poses an existential threat to many shared mobility service providers as COVID-19 is expected to change consumer travel preferences in the near-term. The outbreak is likely to impact the trust on public transportation as well as shared mobility and customers are likely to find personal vehicles safer."

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Corroborating this is a recent perception study 'Impact of COVID-19 on urban mobility in India' conducted by The Energy and Resource Institute (TERI), which indicated that increased risks associated with crowded places combined with social distancing measures, could likely have a significant impact on commuters' choice of transport. The study says while 35 per cent of respondents stated that they were most  likely to change their mode of transport for work trips post COVID-19, it also showed a  sharp decrease in the usage of bus and metro services, and shared mobility. "This is expected to shift to the use of private vehicles and intermediate public transport (IPT) such as taxis and auto rickshaws. Share of non-motorised modes may also increase, especially for short distance trips. Overall, the perception study indicates an increase in private vehicles in cities post the COVID-19 crisis," the study said.

The early signs of this shift, moving away  from public transport are already visible, say Bengaluru-based bike rental start-ups such as Bounce, Vogo and micro mobility start-up Yulu. Anil G, Co-founder & Chief Operating Officer at Bounce says over the last 10 days or so since they started operations in Bengaluru and Hyderabad, response has been very encouraging. "We are already seeing ridership of 5,000 every day, even as we are adding grounded fleet," he said. Now with partial resumption of offices, the company anticipates this number to grow. Bounce is also witnessing an increased engagement where riders are travelling longer distances and also the time for which they engage the bikes. "Pre-COVID, 40 per cent of the rides used to be the last mile connectivity to the public transport system, now with public transport non-existent, people are using it for the entire journey," says Anil.

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Anand Ayyadurai, Founder & CEO  of Vogo points out that going by the hypothesis based on what happened in China where bicycle and bike rentals space picked up much quicker than cabs, even in India the bike rental space has been picking up much faster than the rest.  "From this month itself we will be at 30 per cent of where we were during pre-COVID era, and in the next one or two months, we should be back to our pre-corona traffic. For me the following three months are where we shall see growth opportunity to expand customer base and fleet," says Ayyadurai. Yulu's Co-founder and CEO Amit Gupta said the company has started seeing good traction ever since it started operation in the first week of May. "Our distance as well as time usage has gone up by 50 per cent, the reason being our earlier sweet spot was 3.5/ 4 kms , but now people are skipping buses, taxis and autos and our average time has gone up," says Gupta even as Yulu largely catered to last mile connectivity. In spite of limited number of office goers, the company is already seeing a 50-60 per cent of demand that existed in February. "We have seen a very quick 'V' shape recovery in our business," Gupta added.

To retain and grow the demand, start-ups are laying extreme importance on two things. One, the change in business model, and the another, messaging around sanitisation. For instance, Bounce and Vogo have now started offering their bikes for long-term rental than the usual on hourly basis. Bounce in particular has launched several options right from 60 days plan to annual rent to own. It has also partnered with electric scooter maker Ather with a provision to buy Ather 450 on the app and rent it out when not in use. Vogo has also started renting scooters ranging from an entire day, week to up to a month.

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Companies are also placing a huge emphasis on sanitisation to counter any fear in the minds of commuters while using rentals. Bounce said it used an anti-microbial coating on the surface of vehicles which remains effective for up to two months. Vogo has started not just doorstep delivery of the vehicle but also sanitisation right in front of the customers. Yulu also said it was undertaking sanitisation multiple times in a day. While the early signs of recovery are yet to translate into a strong trend, the start-ups are hoping that  deepening macroeconomic crisis and slow consumption could delay expenditure on owning a bike and moving to the rental model instead.

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