Speed bumps ahead, stay alert

Murali Krishna of DULT says that the Karnataka government is planning on building infrastructure for bicycles. However, he didn’t provide a timeline for this. Existing public bicycle lanes in Bengaluru, Delhi, and Pune, according to Rajarshi Sahai, who worked as an Urban Development Planner with the MP govt in 2009-14, “are being used as alternate parking spaces, hawker zones, or to bypass traffic.”

As of today, DULT has issued permit regulations—minimum density requirements per parking station, minimum bike to annual user ratio, and a clause that outright bans dockless bicycle-sharing: “Bicycles shall be parked only at [DULT-approved] parking hubs. Any unauthorized parking can be subjected to towing,” the permit license reads.

Murali Ramanath, the co-founder of bicycle sharing NGO NammaCycle, which has been promoting bicycle-sharing in Bengaluru since 2014, is worried about these new DULT regulations. “[Regulators] simply copied clauses from the Singapore [bicycle-sharing] model. It doesn’t make sense for a city like Bengaluru.”

Speed bumps ahead

Bengaluru has around 4,000 cycles, according to Murali Krishna. This has fallen from around 6,000 bicycles in December 2018, after Ofo and Zoomcar PEDL shut shop. The majority of the lot now belongs to Bengaluru-based Yulu Bikes.

The co-founder of Yulu, Amit Gupta, says that Yulu has around 6,000 bicycles across Bengaluru, Mumbai, Pune, and Bhubaneswar. Like every other bicycle-sharing startup, Yulu, too, believes that the future of last-mile travel in big cities in India is e-scooters.

However, Indian cities often don’t have weather and road conditions conducive to cycling (or to Gupta’s dream). Not everyone would want to take a cycle ride to the office on a hot summer day, and so mobility startups will have to optimize for different factors. These include the geography of the city, weather, road conditions, public awareness of sharing services, and, of course, access to public transport.

Gupta claims that his upcoming e-scooters will address all these factors. The startup plans to scale up to a total of 15,000 bicycles and e-scooters in the first quarter of FY19 across different cities.

Mobycy, meanwhile, has, as of this month, launched its ‘Zypp’ line of scooters. Mobycy CEO Akash Gupta says that electric scooters could possibly generate the “value of a single asset in 6-8 months” compared to bicycles which could take up to 16-18 months. To do this, Mobycy will have to raise the current daily usage of a bicycle from 3-4 rides up till 8-10 rides. Gupta claims that the demand pattern from Mobycy’s initial pilots during December last year in the Delhi-NCR region is already nearing this scale.

The price of planning

Given its current state, bicycle-sharing in India will continue to be an experiment. Take a closer look at its demand-supply and the continued focus on unit economics, and the spoke in the wheel really sticks out.

The underlying formula for scaling and mobility for startups is to find a balance between tariffs and the number of electric scooters. Investors, who requested anonymity, are skeptical because the ceiling for last-mile travel is already set at Rs 8/km ($0.11/km) by on-demand cabs companies like Ola and Uber.

Sahai, who was also Ofo’s public policy director, says that the demand for bicycle-sharing isn’t the problem. He claims that Ofo clocked 2 million rides across seven cities within the first 20 weeks by charging Rs 10 ($0.14) for every 30 mins.

The actual problem rests on the supply side. “If you add up all the sharing bicycles, it does not add up to even 100,000 bicycles across India. This is simply too few bicycles,” Sahai says. The ideal number, he adds, is 100,000 bicycles per city, growing in sync with demand, and it would make monetary sense to both the users and the companies.

These 100,000 bicycles/e-scooters should also be fetching enough revenue to make a profit. Uber’s JUMP scooters, for instance, charge $2 per ride (~Rs 150) for every 30 mins. “For a 30-minute ride in India, you’re basically covering a maximum of 5 km because of traffic conditions. For 5 km you anyway end-up paying Rs 160-180 ($2-$3) on Uber… Now, who will be willing to pay Rs 150 ($2) for a bicycle ride in India when Uber itself charges that much for a cab ride?” Sahai asks, rhetorically.