Photo: Photos By Rebecca Conway / New York Times
BANGALORE, India — In Uber’s vision of the future, self-driving cars will whisk us everywhere, eliminating the need for its millions of human drivers.
But a low-tech approach to the self-driving future is emerging in India: motorbikes that customers rent and drive themselves.
Several startups — backed by Silicon Valley venture firms and Uber’s Indian competitor, Ola — are betting that shared two-wheelers are better suited to wallets and transportation needs.
The traditional model of Uber and Ola is reaching its limits, said Vivekananda Hallekere, a co-founder and CEO of Bounce, which fields more than 6,000 motorbikes that people can pick up and drop off anywhere in the southern Indian city of Bangalore. The car rides are too expensive for most Indians, the drivers complain about long hours and poor compensation, and the ride-hailing services are struggling to make a profit, he said.
“You can’t make it affordable with a driver,” Hallekere said. “And if users know how to use a scooter, why do you need a driver?”
By focusing on the large number of people who cannot afford ride hailing, these startups are opening up a new front in the global battle to provide shared transportation services. In developed countries, Uber undercut the taxi industry and created demand for rides by persuading tens of millions of customers to hop in a car with an ordinary driver summoned by an app. But in developing countries like India, where two-wheeled vehicles outsell cars 6-1, Uber and its competitors must figure out a different approach or risk a challenge from below.
With 1.3 billion residents, India is the world’s largest market for motorcycles. About 20 million new ones are sold annually, from low-powered scooters to heavy-duty Harley-Davidsons. Industry leaders estimate that 200 million people possess a license to drive at least a basic two-wheeler.
On a recent weekday morning, Mallikarjun D., a software engineer, pulled out his smartphone and booked an electric motorcycle on Vogo, a Bounce competitor, for his 9-mile commute to his job at Infosys.
Usually he takes the Infosys bus, he said as he put on his helmet and grabbed the bike from a garden that served as Vogo’s neighborhood parking lot. But he was running late, and at a special rate of 14 cents for the full day, he found the bike to be the perfect solution.
“It’s a reasonable cost,” Mallikarjun said. “And it’s helpful for the environment.”
Vogo and Bounce are battling for dominance in Bangalore, India’s tech hub, where Ola is also based and is watching carefully. Vogo requires people to pick up and drop off their bikes at designated locations, while Bounce bikes can be picked up or left anywhere.
How viable these services will be over the long term is unclear. Like Uber and Ola in their early days, both companies are offering promotions to bring down the price of rides, which requires a lot of spending.
“You want it to be habit-forming for the customer,” said Anand Ayyadurai, Vogo’s co-founder and CEO, who said costs would come down over time.
There is also the sobering lesson of shared bicycles in India, which were heralded as a great idea but failed to take off. The country’s chaotic traffic and the long distances between public transit and homes and workplaces made shared bicycles unappealing, forcing several operators to shut down.
“It’s a very complicated, very hard business,” said Shailesh Lakhani, a partner at Menlo Park venture firm Sequoia Capital, which has invested in Bounce. “That said, the amount of demand is insane.”
Vogo and Bounce are hoping to cut costs by stocking their fleets with electric motorbikes, which cost less by the mile than gasoline ones. They are looking to another Bangalore startup, Ather Energy, to supply them. Ather has engineered a premium-priced, aspirational electric scooter that is one of the few to qualify for government clean-energy subsidies, and it is building a network of fast-charging stations.
Yet Ather can make only about 500 scooters a month. The company is lining up a manufacturing partner to vastly increase production, said Ather CEO Tarun Mehta.
Bounce and Vogo are expecting new funding to help them compete.
Bounce has raised $18.9 million from venture firms such as Sequoia and Accel, according to corporate filings analyzed by data firm Paper.vc, and it is raising an additional $80 million.
Vogo has raised $17.8 million from Ola, San Francisco venture firm Matrix Partners and several Indian companies. Ola also plans to provide up to $100 million to help Vogo put an estimated 100,000 motorbikes on the street, and has promised to include the vehicles as an option on its ride-hailing app.
Ola’s decision is pragmatic. Traditional ride-hailing is a maturing business in India, much as it is in the rest of the world. Many drivers are unhappy with reduced payments from Ola and Uber, and have periodically gone on strike in Mumbai, Delhi and Bangalore to press for better terms. Riders complain of rising fares and of long waits for cars. Public transit systems, particularly metro lines, are improving but will not get people the last mile to home or work.
“How do you create mobility options for the next 900 million?” asked Anand Shah, a senior vice president at Ola who oversees its electric mobility efforts. “You don’t have to look far — you can see what India is choosing.”
In addition to supporting Vogo, Ola offers motorbike taxis in some Indian cities and is promoting wider adoption of electric auto-rickshaws.
Uber has made no moves toward ride-hailing with motorbikes. But it has recognized the potential of cheap vehicles that customers drive themselves. Last year, it bought Jump, which rents out electric bicycles and motorized stand-up scooters in two dozen cities in the United States and Europe. In February, Uber said, more customers in Sacramento had rented its Jump vehicles than had summoned traditional cars.
Scooters, bicycles and mopeds have the potential to steal some market share from the Ola and Uber car services, said Chandrasekar Iyer, who is studying disruption in the auto industry as a fellow at the Clayton Christensen Institute. But Iyer, a consultant at Tata Consultancy Services, predicted that the ride-hailing giants would not stand idle.
Vivek Durai, a co-founder of Paper.vc, which closely monitors privately held companies in India, said the big money is beginning to flood in.
“There is a deep hunger to solve this,” he said. “People need flexible options for transport.”
Vindu Goel is a New York Times writer.