Shared mobility players can cash in on growing logistics demand

• Last-mile delivery and electrification offer opportunities to scooter-sharing companies in India.
• Mobility players urged to align their fleet with delivery companies and individuals for maximum utilisation.
• Rising fuel prices will compel shared mobility companies to relook at their asset portfolio and consider increasing the share of electric vehicles.

Growing logistics demand due to the increase in online-culture among Indian consumers offers opportunities for shared mobility players to step-in.

Covid-19 pandemic has shifted consumer preference to personal mobility and the prominence of work-from-home arrangement in major cities in India is keeping the fleet utilisation low.

But, Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, said that mobility players need to align their fleet with delivery companies and individuals for maximum utilisation.

 “In the present scenario, rising fuel prices will compel shared mobility companies to relook at their asset portfolio and consider increasing the share of electric vehicles. Electric scooters and motorcycles are priced slightly lower than their IC engine counterparts, incur lower taxes and offer low total cost of ownership,” he said.

Petrol prices in Mumbai have crossed Rs95 and inching closer to the Rs100 mark.

Moreover, Agwan said the growing production of the electric two-wheelers in the country offers opportunities for shared mobility and auto companies to get into asset leasing partnerships, which will be a win-win for both parties while electrification can help mobility companies to make their business asset-light.

Vogo and eBikeGo raise funds

The domestic scooter-sharing market in India has been witnessing highs and lows for the past few years.

Against this backdrop, the investments indicate that investors are optimistic about the future of scooter sharing/rental business models in India.

Ola-backed scooter sharing and short rentals brand Vogo raised $11.5 million while eBikeGo, a scooter sharing platform for personal mobility and last-mile delivery services, raised $1.5 million.

Both Vogo and eBikeGo plan to use the funds for regional expansion and the addition of electric vehicles.

“After witnessing a short-time success, some of the app-based platforms failed to find the required volume of riders in India, affecting their fleet utilisation and profitability,” Agwan said.

Hyundai to strengthen its position

Following the success of passenger vehicles in India, Hyundai, the second-largest player in India with a market share of 17.4 per cent last year, South Korean giant is set to strengthen its position as a mobility player in India with fresh investment.

Presently, Hyundai has Kona Electric under its battery electric vehicle (BEV) portfolio in India and plans to go the Tata-way and develop locally made affordable electric car. The company has a budgeted investment of $137 million for the same and the vehicle is expected to get in production by 2023.

Agwan said the South Korean auto giant has pioneered shared mobility in India in partnership with car sharing companies, launched the first online retail program ‘Click to Buy’ and emerged as a major SUV brand.

“Hyundai, with its affordable BEV, could definitely reform the electric mobility space in India but needs substantial support from the government to develop the electric ecosystem to promote EV adoption.”

However, to make the EV fleet expansion growth sustainable for the mobility players, he said the government and automakers need to play significant roles in creating the right ecosystem including charging infrastructure, battery swapping and service stations for the upcoming EV fleets.

While success is not a low hanging fruit for shared mobility players in the present scenario in India, there are “untapped opportunities for companies and investors. Focus on logistics/last-mile delivery services and electrification of fleet offers significant opportunities to scooter-sharing companies.”