Shared mobility companies take a U-turn to stay on the road

Bengaluru: Shared mobility service providers including Ola, Uber, Vogo, Bounce, Rapido, and Yulu are expanding their portfolio and restructuring their category mix to gear up for a post-Covid-19 market, as consumer appetite for on-demand mobility looks to weaken, at least for a year, analysts and investors told ET.

“User behaviour post-Covid-19 will change in the medium and long term. A large chunk of people will move away from public transport towards safer alternatives in similar price range… and others who can afford will also upgrade from one form of mobility form factor to another, or may even buy,” said an investor in the mobility space.

Automakers, however, said part of this demand will gravitate towards consumers buying entry-level scooters.

New priorities

Ola, for instance, is planning to prioritise and expand its self-drive business to consumer subscriptions and corporates, according to people familiar with the development.

Last week, it launched Ola Pro in Australia, a premium offering that stresses on hygiene in cars, and there is talk it may also be launched in India.

“There is also bullishness about bike taxi in the medium-term… the belief is that it is a big category especially for smaller towns,” said an executive at Ola requesting anonymity.

Rival Uber India has also started exploring new categories, such as dedicated rentals to corporates and the employee transportation segment, as well as ecommerce deliveries and long-term consumer leasing. Uber declined to comment.

Riding on the premise that quite a few public transport users may look at other mobility options, scooter sharing platforms such as Vogo, Bounce and Yulu are scaling up long-term two-wheeler subscriptions. “Given norms around social distancing… the safest mode of transport for consumers looking to move out of public transport will be self-drive two-wheelers,” said Anand Ayyadurai, CEO, Vogo.

Bike taxi app Rapido, too, is expanding services from transporting people to moving packages, as consumers and drivers continue to be wary of proximity to an unknown individual.



Questions over unit economics

Experts say adding elements which induce safety will not come cheap. “The opex (operating expenditure) goes up by 4-5%.. Will India pay that premium?” the founder of a mobility firm said. Bike leasing has also come under scrutiny.

“To get customers, you need to price the subscription lower than an EMI per month, which makes it hard to make money,” said Amit Gupta, cofounder and CEO of Yulu, which is offering a leasing option to customers, but plans to move back to on-demand mobility as cities gradually open up.

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