The fleet of the Bounce

Papering the whole city over with batteries is classic Bounce. After all, this is what they did with their petrol scooters. For kirana stores to make money though, says Sekar, Bounce will need to add roughly 10,000-20,000 scooters to its fleet (or replace the petrol scooters) for the economics to make sense. Otherwise, incentives don’t align.

Creating a reliable infrastructure up front is always beneficial. But as Amit Gupta, co-founder of Yulu, points out, the network can’t come before getting the demand right. Yulu, launched in 2017, has been an electric, last-mile solution from the very start. Its flagship product—the Miracle bike—is smaller than an electric scooter, with a top speed of 20-25 km/hour.

Yulu has also tied up with kirana stores to park swappable batteries, but unlike Bounce, Yulu owns these batteries. “We don’t want store owners to invest in batteries if we can’t promise them steady income. That takes us into the zone of assured returns or a minimum guarantee,” says Gupta. Currently, Yulu only pays for one-third of its battery deployment because kirana stores aren’t its whole model.

Instead, it ensures that a battery swapping station isn’t more than 100 meters away from a Yulu zone, where its bikes are parked. On the backend, Yulu can track batteries running low on charge, and swap them. Having a hub to anchor operations helps.

Bounce is not particularly threatened by the hub model, according to Sekar. “They’ve put a more elaborate and accessible system in place through the kirana stores,” he adds.

The danger with such a widespread model, though, is the battery. How does Bounce ensure a perfect state of charge when it has no control over the asset? Arguably, the IoT attached to the battery can keep Bounce updated on the backend. But the model isn’t any less complex operationally than running a petrol fleet.

One place that Bounce and Yulu score over FAE or Vogo, is a uniform form-factor. There are fewer unknowns. “If we could settle on one product, then deploying one type of batteries at the Vogo hubs is possible. Right now, we don’t know if these are going to 48 volts or 72 volts,” says an electric vehicle engineer with Vogo, who wished not to be identified.

The long game for survival

Switching is a no brainer, however. Electric scooters can move the needle for companies like Bounce and Vogo.

Bounce has been working for the last 14 months to get its electric fleet up and running. But it has made some quiet innovations to its petrol fleet as well, despite having the capital to swallow the heavy losses.

These have clearly been the raft to keep Bounce’s head above water.

Bounce re-designed its fuel cap, which only allows users to put fuel in and not take it out. The bigger win though, has been shaping user behaviour. “40% of our refueling is now done by customers,” claims Hallekere. In return for refueling for Rs 200 ($2.78), Bounce gives a Rs 30 ($0.42) incentive to the user on its app.

The scooters themselves have become advertising real estate. Bounce charges Rs 1,000 ($13.9) per scooter to carry ads. “We recover 30-40% of the EMI payment on the scooter,” claims Hallekere.

Bounce has also created what Hallekere calls ‘virtual hubs’, which nudge users to leave scooters at designated spots. It’s helped Bounce reduce costs on rebalancing, i.e., moving scooters manually to match demand. Bounce can predict demand beforehand, so these drop-off points are always dynamic. Still, it has had to move towards a more hub-like system to run its operations. “All of our rebalancing is done through our users now,” claims Hallekere, though rivals insist that Bounce is still physically re-distributing its scooters every day.

These tweaks have worked to some extent. According to Hallekere, in just the last month, their revenues have increased by Rs 3 ($0.04) per kilometer. Add electric scooters to the mix, and their unit economics could finally crack open a path to profitability.

Bounce has yet another playing card up its sleeve. In 2017, it was selected by the Bengaluru metro authorities to run a pilot for last mile mobility. “We had a hub for Bounce scooters on the metro’s premises. They even made announcements inside the train about our service,” says Sekar, who was with Bounce at the time.