Shifting Gears: How Startups Are Cleaning Up Transportation In India

By Abhirat Shinde

Imagine you are a high-flying technology executive living in New York City, and you land in Mumbai, India, after a gap of 5 years. 

Instead of the constant drone of public buses, taxis and scooters, you’re greeted with silence interspersed with the chit-chat of people. Your Uber is a fancy electric car from Pravaig Dynamics. You see charging units at buildings, electric buses, electric scooters, but there are no vehicular fumes. As you roll down the window, you are greeted by a whiff of fresh air. You find neatly stacked charging units lined with electric cars and scooters at the office. Back at your apartment, you order groceries, which arrive in 15 minutes powered by an electric scooter. 

Climate change has become a global concern, and transportation forms a significant component. To realistically achieve the goal of drastically mitigating global emissions, all nations need to proactively transition towards a cleaner mode of transport. With solid tailwinds from Venture Capital and the government, startups have already shaped this transformation. 

Micro Mobility Revolution

Unlike its Western counterparts, India relies on two-wheeled and three-wheeled vehicles for local transport. While public transport has been pervasive, 2- wheelers and 3- wheelers are here to stay. McKinsey & Company Insights suggests that India will see 80% Electric 3-Wheelers by 2026 and anticipates rapid acceleration toward electrified scooters. 

Startups in India have leveraged this exceptionally well, with Mobility-as-a-Service (MaaS) plays picking up pace across metropolises like Mumbai, Delhi, Bangalore. Innovative startups such as Yulu, Bounce provide electric bikes and scooters with strategically located docks for clean, cheap and sustainable local commutes. 

Climate change has become a global concern, and transportation forms a significant component. To realistically achieve the goal of drastically mitigating global emissions, all nations need to transition towards a cleaner mode of transport proactively.

Changing Consumer Perspectives

In addition to the MaaS model, retail consumers have a growing interest in purchasing electric scooters and electric four-wheelers. Stemming from the ‘cool’ factor of owning an electric vehicle while also saving the environment, some people are buying premium electric bikes and cars. More substantial growth is seen in the average buyer with the motive of owning economical and low-maintenance electric scooters at a decent price point which is a mainstay of the Indian consumer. 

What drives the economics is the lower Total Cost of Ownership (TCO) of electric 2-wheelers. Estimates of fuel, upfront, and maintenance costs indicate that electric 2-wheelers are 50% cheaper than their Internal Combustion (I.C.) Engined counterparts. Several Original Equipment Manufacturers (O.E.Ms) are catalyzing the transition toward E.V.s. The startup Ola Electric, a $2.7 bn sister company of the ride-hailing platform Ola Cabs (an alternative to Uber in India), recently rolled out their mid-market, high-quality electric scooters. In a recent podcast, Nitin Sharma, Partner, Antler India, an early-stage V.C. fund, said that Ola electric scooter sales in the first two days of their launch were at 85,000 to 1,00,000 vehicles in just two days. Other startups such as Simple Energy and Darwyn are already delivering solid sales trends to customers across the industry.

Solving the Chicken-and-Egg Problem

Concerns of range anxiety and availability of charging infrastructure have produced innovative charging station and swapping station startups- two popular contenders that form the backbone of the acceleration toward e-mobility. Models include establishing networks of 2-wheeler vehicle chargers across Kirana stores, Battery-as-a-Service and establishing charging stations across commercial and residential properties. Generally full-stack solutions, the space has received much V.C. attention with startups such as Statiq, a charging infrastructure provider raising funds from YCombinator, Souq Ventures (Dubai) and BatteryPool raising from the Indian Angels Network (I.A.N.), among others. 

Taxis of the Future 

While adoption in the four-wheeled E.V. space is slower than their counterparts, there is also room to hope. Cab aggregators like Ola and Uber are moving to E.V.s and startups like BluSmart, an all-electric ride-hailing startup that has seen tremendous growth and raised a Series A from investors such as oil-giant B.P., 9 Unicorns, among others. With better economics and growing popularity, aggregators can benefit from lower operational costs while also lowering the negative externalities of air pollution.

Concerns of range anxiety and availability of charging infrastructure have produced innovative charging station and swapping station startups- two popular contenders that form the backbone of the acceleration toward e-mobility.

Greener Deliveries

Another exciting application of e-mobility and a mainstay is its applicability in logistics. The recent acceleration in innovation in the space has empowered startups like Zypp Electric, a B2B last-mile delivery partner for retail, eCommerce and parcel deliveries. The startup recently raised a Series A from V.C. firms like Venture Catalysts and Silicon Valley-based Riso Capital. By lowering the operational cost of deliveries substantially, leveraging the suitable electric fleets and building a solid product, the logistics industry is set to see a rapid move toward sustainability.

It is estimated that 27% of air pollution in India comes from vehicles, and as much as 95% of city-wide air pollution stems from ground transportation. There is much scope and need for greater adoption of cleaner transport. Technological innovation in Li-Ion battery technology leading to extension of the range of electric vehicles, better analytics and performance monitoring solutions for E.V.s, improvements to charging infrastructure and research and piloting in long-haul electric trucking will bolster this shift.

As startups mature and consumer adoption picks up steam, the future of Indian urban transport looks cleaner. Nevertheless, more remains to be done to nurture such progress. To bolster this transition, the government can push further to incentivize startups with schemes targeted at creating local city-level avenues for more startups. The future looks cleaner for the Indian transportation ecosystem, and startups are at the forefront of it.

Abhirat Shinde (‘22) is an M.S. in Management Science & Engineering graduate candidate at Columbia University. He co-founded an e-mobility logistics startup for the Indian markets, which was part of Columbia Business School’s Greenhouse accelerator and the winner of the Columbia Venture Competition Urban Works India Challenge. Before Columbia, he founded a real estate venture in India. For two years, he expanded over two years and worked as a Fellow to the Chief Minister, Government of Maharashtra, India. Passionate about leveraging technology and business, Abhirat worked on high-impact electric mobility and solar P.V. projects with government and multilateral stakeholders such as the U.N.E.P. and Rocky Mountain Institute.