E-rickshaws will dominate the Indian EV and electric shared mobility market by FY2025, with more than 80% market share.
Electric shared mobility has been growing in India for the last couple of years. While several ride-hailing service providers are focusing on this segment, the growth in this segment is being majorly aggregated by the e-rickshaws, which have been known as low hanging fruits in the EV market.
Because of being the most affordable electric shared mobility tool and for providing the convenience of first and last-mile connectivity, e-rickshaws have seen a boom in the Indian market in the last couple of years. Besides providing the people electric shared mobility solutions, these have also proved to be capable of earning solutions for many people, especially in the Tier-II and Tier-III cities.
Around 72% of the total e-rickshaw fleet in India provide an easy and affordable commuting solution to these cities. These are majorly 0-2 years old and approximately 98% of them are powered by lead-acid batteries, which need to be replaced every 6-8 months, with each replacement costing around Rs 25,000-28,000.
According to a study by Frost and Sullivan, e-rickshaws will dominate the Indian EV and electric shared mobility market by FY2025, with more than 80% market share. In FY2019, around 0.4 million e-rickshaws were plying across India enabling people with an easy and affordable commuting solution.
The growth potential of the electric shared mobility in India is still lucrative, which has prompted two ride-hailing giants Uber and Ola to tap into the segment. Several startups too have been trying to grab a chunk of this electric shared mobility pie.
Autofintechs spoke to one such startup Oye! Rickshaw, which provides connectivity solutions to the commuters in Delhi-NCR. Mohit Sharma, Founder of the electric shared mobility aggregator talks about the various aspects of the segment.
Edited excerpts below.
Q. E-rickshaws have been playing a key role in the growth of electric shared mobility across India for the last couple of years. Do you see the e-rickshaw market still has room to grow?
Shared mobility is the best way to accelerate EV penetration. The eco-system needed for large scale EVs usage cannot be built through personal vehicle route. E-Rickshaws will play a key role in the growth of electric shared mobility in India as the form factor is universally accepted.
Further, the cost advantage of a shared e-rickshaw makes it one of the cheapest modes of transport in the world, perfectly suited in a market where more than 80% of people do not own their own vehicle. This makes e-rickshaw one of the best routes for pushing for EV proliferation.
E-rickshaws are the vehicle of choice to navigate often narrow Indian roads and are inherently more cost-effective and reliable than conventional rickshaws. With solving of issues like charging time and range, e-rickshaws have the inherent capability to become the go-to choice for first-last mile connectivity in urban and universal commute option in semi-urban areas.
Q. Major shared mobility aggregators like Uber, Ola has entered the e-rickshaw segment. Do you see this accelerated the pace of growth in this space?
Shared mobility is the best commute option for India where most people do not own a vehicle. The entry of players in the e-rickshaw segment only proves this point. This is also the reason why shared cabs have a much higher acceptance.
However, the true enabler of this space will be the government by pushing for easier adoption of EVs through FAME. E-Rickshaws are becoming the preferred choice of transport in several cities and are getting the acknowledgement they deserve.
Q. Most of the e-rickshaws in India are powered by lead-acid batteries instead of lithium batteries. Is this at all serving the purpose of zero-emission mobility, considering the fact that lead-acid batteries pose a potential threat to human health and the environment if improperly discarded?
Oye is focused towards a more environment and human-health friendly Li-ion battery. We believe that the adoption rate of Li-ion batteries is growing and by 2024 the segment will be dominated by Li-ion battery run e-rickshaws. They charge faster, have better tech integration, last for a greater number of charges and provide a higher range per full charge. The biggest hurdle is the cost, which is now falling due to an increase in the number of manufacturers.
In the interim, to manage the current lead-acid batteries, Oye regularly trains its driver-partners to ensure correct maintenance and proper disposal of the lead-acid batteries.
Q. Currently you are operating in Delhi-NCR and select areas of Haryana. What is your expansion strategy for other cities or areas?
E-ricks complement public transport well. Since they provide first and last-mile connectivity, our focus is on cities with well-developed metro systems and other forms of public transport. That said, e-rickshaws also have significant potential to become the preferred mode of public transport in small towns.
Q. What is the business model Oye! Rickshaw is following for its driver-partners, which makes it different from other aggregators in the space?
Oye! is a driver first organisation, meaning our business objective is to explore ways to put more money in the drivers’ pockets. Our business model, therefore, has inbuilt that aspect in two revenue routes.
1. Being a first/last mile connectivity model, we are ensuring the e-rickshaws are doing short multiple rides per day. This also ensures less downtime.
2. By adding delivery to the engagement, we are supplementing driver income.
Our tech backend is constantly tuned to ensure these two revenue routes are optimised in a manner that is seamless and offers the best customer convenience.
From a driver welfare point of view, we offer perks like medical insurance, next day pay-out mechanisms, etc. While increasing driver income, we are also helping to reduce their operating costs by exploring asset subscription models.
Q. How the Covid-19 pandemic has impacted the electric last-mile shared mobility segment in India?
During lockdowns, public mobility segment has been impacted significantly. However, with public transport ridership numbers back around 40% – 50% of pre-Covid levels, there is now an improvement. There has been an increased focus on private rides as opposed to shared rides.
All our vehicles have Covid safety checks in place in terms of sanitisation of vehicles and masks for Driver Partners. Also, people have gotten more environmentally conscious since Covid, thus they are supporting electric mobility services.
Q. Do you provide any financing solutions to the driver-partners who want to come on board the platform but don’t own an e-rickshaw?
We are currently supporting our driver-partners to claim benefits offered by Government schemes to purchase e-rickshaws. We also provide assistance to our drivers for documentation around this, and with the documentation for other procedures such as obtaining driving licences.