Two-wheeler taxis, the new-age Indian Robinhood

"Last-mile connectivity”

I bet you have heard this phrase more than often. And why shouldn’t you? After all, to dream of having the privilege to be dropped right at the office doorstep while keeping a check on pockets isn’t a bad thing, is it?

Fast forward to 2019, a humongous fleet of 1000s of bike taxis dropping people at offices even in the remotest of locations is a sign of good times. Hang on, it is even more than that. Home delivery, transportation, hyperlocal delivery, you name it, India has it. Surely, the change is much more than ever imagined. The question is why and how?

Before we answer this, how did the bike taxi concept originate? The concept of bike taxis finds its roots in multiple places at the same time during the 1980s in Brazil and China where motorcycle taxi service appeared as a low-cost transportation service for the masses. Eventually, it expanded to Indonesia, Nigeria, Sweden, and many countries as a way to provide last-mile connectivity to people. Go-jek, a bike taxi firm based out of Indonesia has recently entered the decacorn status with a valuation of more than $10 bn. No doubt, bike taxis have come a long long way globally.

The Indian Perspective

The history of bike taxis in India has been a journey of confusion and a matter of risks. In 1988, the Motor Vehicle Act was implemented which requires every commercial vehicle to carry a yellow number plate, but not two-wheelers. While the Indian government has tried to resolve the issue, the draft guidelines issued by the central government in December 2016 allow state governments to draft their transport regulations. Consequently, from Goa becoming the first state to legalize bike taxis, states like Telangana, Haryana, Rajasthan have also followed the same footsteps albeit with their restrictions. Hence, a countrywide adoption is on its way.

Initially, many Indian startups who happened to be the first players in the market failed to go beyond one year of operations thanks to unclear regulations and a lack of scalable business models. Coincidentally, two of them survived the mass extinction and are now flourishing on their levels. Baxi and Rapido. Both founded by IITians took the market by surprise by their unique business models. As of May 2019, Rapido is doing 90000 trips per day in Indian cities and aims to do a million trips by the end of 2019 as said by the founder, Aravind Sanka. (Cited from The Ken’s article). Enter Ola and Uber with their aggressive growth plans.

But, two-wheelers currently are much more than just taxi services. See how-

Thanks to how lazy I have been, I don’t go out at all from my home on weekends (weekdays? Yes, forcibly). The other day I felt hungry, I ordered food from Swiggy (no biases, Zomato) which was delivered by Sanjay, the delivery boy in no time despite ultra-busy traffic in Noida, riding on his brand new Splendor. No wonder I forgot to order cold-drink, worry not, I ordered it through Dunzo from nearby 24*7 store which was coincidentally again delivered by Splendor, but by an older man in his late 40s. In 2018, Dunzo executed 75,590 deliveries.

Now, see something? This is the story of not only me but thousands of people like me who are students, corporates, housewives doing the same regularly. No doubt, two-wheelers are much more in the picture now thanks to these innovative startups. Whether its taxi, delivery or packaging services, bikes are much more on the scene now. Just to quantify, in the year 2017 only, 1.75 crore two-wheelers were sold.

Going back to the previous question, how did they come into the picture in India? Well, there are several reasons for it. Let’s take a look-

• Last-mile connectivity Bike taxis offer last-mile connectivity to locations where cabs can’t even imagine to reach, thus giving a fast service to millions of customers daily.

• It bears less on your pocket Bike taxis charge a meager INR 5/KM which results in an average trip cost to be somewhat around INR 30–40, much lesser than what Ola/Uber charge. According to a study, 80% of the customers are college students, fresh graduates who aim to optimize their cost as much as possible, hence it acts as a boon for them.

• A faster alternative to cabs According to a report prepared by location technology specialist TomTom, Mumbai stands top on the list of worst traffic flow in the world with Delhi coming fourth. In such a scenario, two-wheeler taxis comes as a breather to avail timely services.

• The rise of urban population No doubt, the urban population in India is on the rapid rise with more than 9 million people living in Bangalore and Gurgaon alone. This upper-class younger generation works as the perfect target segment for delivery based startup-like Dunzo, Baxi to provide home delivery services at a minimal added cost.

What ahead?

• Safety remains a big concern for women travelers availing of the two-wheeler services with a stranger. There is a need to set up proper regulations to ensure the safety of women. One startup Bikxie Pink has come up with a unique solution by providing all women bike riders exclusively for women. While the idea seems tempting for sure, scalability is still to be looked out for.

• The state governments need to set up proper legal guidelines to set up bike taxis in the Indian states. While 8 states have already joined the fray, there is an urgent need to set up nationwide guidelines to roll out the service.With more petrol bikes, comes more pollution.

• To reduce the environmental burden, genuine steps need to be taken by a productive collaboration with service providers and the governments in power. Ather energy, electric vehicle manufacturer brings exciting solutions on the table by replacing traditional two-wheelers with electric bikes. Having already received a $100 mn funding from Ola, a lot is expected in this segment.

• Hyperlocal delivery is a booming sector in India with the market expected to be worth INR 2,306 crores by 2020 fuelled by rising startup firms and fluctuating investments. Baxi has already partnered with Mother Dairy to provide doorstep delivery of milk and other dairy products across Delhi-NCR thus competing with the likes of MilkBasket and DailyNinja to name a few. Amazon, on the other hand, is testing its delivery system while at the same time partnering with DHL, FedEx to provide doorstep delivery.

With the advent of proper guidelines and a proper arrangement in place, two-wheelers surely show an exciting market ahead. Solving a variety of real-world problems for the masses riding confidently on their two-vehicles, aren’t these people the new-age Indian Robinhood?

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About the Author:

Rana Madhvendra: Student, startup enthusiast. I write long sentences and yet find myself to be a minimalist. Unironically, that's ironic.