Oye, based in Delhi! The rickshaw electrifies the most popular means of transport in India: auto rickshaws.
IIn India’s tough market, companies like Uber and local rival Ola have battled to become the go-to provider of cheap and convenient rides. Their apps offer a variety of vehicle options in India, including auto rickshaws, the country’s urban transport backbone.
Auto rickshaws are one of the most popular and easily accessible modes of transport, usually for short trips (less than 5 km) to offices, markets and schools. It’s also the cheapest way to get around India, with three-wheelers costing half the price of a taxi.
In recent years, an electrified version of auto rickshaws has gained momentum in India, the world’s third-largest emitter of greenhouse gases, fueled by a global push to cut carbon emissions. The world’s largest democracy is particularly keen on reducing carbon pollution as it is home to some of the world’s most polluted cities.
In January, the Indian government approved a 120 billion rupee (about $1.5 billion) infrastructure plan to boost green energy in the country, aiming to meet the net zero carbon target set by the Prime Minister Narendra Modi at the UN COP26 summit last November. A few months later, in April, the Indian government announced plans to swap batteries for electric rickshaws and scooters in congested cities, where charging stations are scarce due to limited space.
Riding this trend, Delhi-based startup Oye! Rickshaw, which is making inroads into the Indian ride-hailing market with its affordable and subscription-based services. Oye operates a fleet of electric rickshaws powered by interchangeable batteries, emitting only sound. With 120 battery swap stations across four cities in India, Oye provides fast services through zero charging time. “It was about building the technology, and now we have it,” says Mohit Sharma, co-founder and CEO of Oye, in a video interview from his office in Delhi.
Sharma co-founded Oye with Akashdeep Singh, who is COO, in 2017 and has since made over 11 million rides and has 200,000 followers. Last year, the startup made it to the inaugural Forbes Asia 100 to Watch list, which highlights notable small businesses and rising startups in the Asia-Pacific region.
Certainly, Oye faces an uphill battle. Although Ola and Uber do not break down their users by vehicle type, their numbers dwarf Oye’s. Ola has over 200 million users in India, while Uber claims to have over 95 million passengers and drivers combined.
But Oye builds a war chest to finance the battle. The startup is gearing up to raise a Series B round of around $15-25 million over the next few months. Oye is already backed by top companies such as Chinese tech giant Xiaomi, as well as top investors like Bengaluru-based Chiratae Ventures, one of India’s online retailer Flipkart’s earliest backers. , and Matrix Partners in San Francisco, best known for its early investments in Apple. and Fedex. Indian billionaire Pawan Munjal, chairman and CEO of motorcycle manufacturer Hero MotoCorp, where Sharma worked for two years, is also an investor in Oye.
Sharma and Singh have known each other since their school days in eighth grade. They both have degrees in Mechanical Engineering – Sharma from Indian Institute of Technology and Singh from National Institute of Technology. Now both 32 years old, they made the decision to make their dreams of teenage entrepreneurs come true.
Sharma, along with his uncle, launched a pre-Oye e-rickshaw startup called Jangid Motors in 2015; Singh joined Sharma as Chief Strategy Officer. Jangid Motors focused on producing the first locally developed electric rickshaws in India. “We used to make the electric rickshaws, but we had no service once we sold the vehicles off the shelves,” says Sharma.
With just 120 million daily commuters in India, the duo saw huge potential for an economical and environmentally friendly transport subscription service in this rapidly developing country. “With huge market opportunities, as well as our know-how on how to build this vehicle and build this technology layer, it was something that ultimately drove us to start Oye Rickshaw,” says Sharma.
In India, new registrations of EV passenger cars, which refers to all electric or hybrid vehicles excluding motorcycles and mopeds, are expected to reach 65.4% in 2040 from their current low of 0, 2%, according to Fransua-Vytautas Razvadauskas, a senior consultant focused on cities and mobility at market research firm Euromonitor International.
“In the future, there will be more electric vehicles on the roads,” says Razvadauskas. “If the supply doesn’t change, then you’re going to have a price increase,” pointing out that this is a possible challenge for startups such as Oye.
Another challenge is security. Videos of battery-powered two-wheelers catching fire in India have emerged on social media, leading to casualties and skepticism about the safety of battery-powered vehicles.
Some turn to R&D to improve security. Chinese automaker BYD, backed by Warren Buffett, for example, launched its Blade battery in 2020, which it says is a safer option over conventional lithium-ion batteries due to its lower surface temperature. Semiconductor technology is another promising area. Solid-state batteries use solid electrolytes rather than flammable liquids in conventional lithium-ion cells.
However, research has shown that solid-state batteries can react violently under certain conditions, giving consumers a false sense of security, Razvadauskas notes. Still in the development phase, a lot of research continues to be conducted to correct weak points in the industry, such as battery safety.
Even with the challenges, the electric rickshaw market still has a lot to offer. Rising awareness of sustainability and climate awareness, especially among younger generations such as Gen Z, are believed to be some of the other reasons why consumers are choosing to drive electric rickshaws over fossil fuel vehicles. says Razvadauskas. “It’s more of a useful and convenient mode of transportation in a country where congestion can be a problem,” he adds.
Oye has adapted more to the preferences of local consumers for urban travel than the big players who entered the markets with passenger cars that do not meet the needs of local consumers in India. This trend is seen across Southeast Asia, where Uber has been squeezed out of Indonesia, Singapore and Thailand due to stiff local competition.
“It gave rivals such as Grab and Gojek a bit more leverage to fight Uber and essentially ended up driving Uber out of markets in those industries,” Razvadauskas says.
At the height of the pandemic two years ago, Oye saw a decrease in their ridesharing service, so they decided to launch Oye! Delivery, partnering with Indian grocery giants such as JioMart and billionaire Mukesh Ambani’s Ninjacart for door-to-door delivery services.
Other ridesharing service apps in the Asian region, such as Grab and Gojek, have pivoted to adding delivery services to their apps as the pandemic has fueled the need for home delivery. Oye says they are currently in talks with Indian food tech giants such as Swiggy and Zomato to venture into the food delivery service market.
Unlike Oye’s competitors such as Ola and Uber, which charge a share of rides made by drivers, their revenue comes from their customers’ subscriptions. They charge subscribers based on the number of rides they wish to make per month, broken down into three tiers: 5, 15, and 50 rides.
Oye is looking to develop an AI-based algorithm that would help them look at each customer’s history and orders and develop a bespoke pass they could subscribe to. “Every ride they charge 25% to 30% commission and that’s what we don’t do,” says Sharma.
The startup has also developed a custom map for drivers on their app that uses an algorithm based on a driver’s trip history and guides them on routes that allow them to receive more orders while making trips.
Their mapping solution aims to bridge the gap between supply and demand and has the potential to earn drivers 1200-1300 rupees (about $15-$17) per day, as opposed to regular rickshaw drivers. shoots who earn 700-800 rupees (about $9). -$10) per day, according to Oye.
“Most [EV] the growth that is going to happen by 2040 is expected to happen in emerging and developing countries like India,” says Razvadauskas. “There’s going to be strong growth in the middle class, more consumer spending power and a lot more opportunities to develop these kinds of mobility opportunities in those markets.”