Disrupting the drive: How mobility startups are rewriting the EV playbook

A ONCE-IN-A-LIFETIME event can disrupt an entire industry. Henry Ford introducing the Model-T did that to automobiles in 1908. More than a century later, thousands of miles away, a once-in-a-century transition to electric vehicles (EV) is doing that to the mobility space in India. As legacy players try to find their feet in the new game, many startups are challenging their dominance head-on.

The sustainability goals of large corporations have also spawned ventures in areas such as logistics and recycling. And while some mobility startups — such as electric scooter maker Ather Energy (read a detailed story on the company elsewhere in this issue) — are riding the EV wave, others are upending the business models of established firms.

Take ride-hailing firm Rapido, for instance. The startup, which rode into the unicorn club in 2024, started onboarding autorickshaw drivers under its Software-as-a-Service (SaaS) model that year, ditching commissions in favour of a platform fee or subscription. A year later, cab aggregator Uber followed suit for its autorickshaw rides.

“In a country like India, platforms can’t sustain by taking high commissions… Globally, it may work,” says Aravind Sanka, co-founder and CEO, Rapido. “Because of the cost structures we can provide [under the subscription model] and the kind of scale that this can give, this is going to be the new normal. We have seen people following the subscription model already,” he adds. After Rapido introduced the subscription model for autorickshaws and cabs, Sanka says the estimated time of arrival (ETA) has come down and bookings have increased.

For autorickshaw drivers, Rapido levies a subscription fee of around ₹20-25 per day. For cabs, it is around ₹40 a day, significantly lesser than the 30-40% commission charged by rivals, says Sanka.

“In India, less than 15% of autorickshaws were online. We wanted to bring the rest online,” he says, adding that one of the reasons they aren’t online is because of the high commissions charged by platforms. Once the barrier of commissions is removed, more drivers will come online, says the Rapido CEO. “Once they are online, there is predictability of earnings. Earlier they were dependent on their own understanding of an area, or a particular pick-up point which are constantly changing as cities are expanding,” he explains.

Rapido books around 3 million rides per day, half of which come from bike-taxis, about 1 million come from autorickshaws and the rest from cabs.

What is Rapido’s secret sauce? One of the big things with the startup is frugality, says Sanka. “When you want to give the most to both sides in a marketplace, that means you have to take the least. And that means we have to run with less costs… We have a pretty lean team,” he says.

When Rapido started out in October 2015, ride-hailing existed only in the top cities. Sanka says ride-hailing then was meant for “premium customers” who could afford to hire cabs; for the common people, these cabs were unaffordable. “Affordability can only come with low-cost vehicles,” says Sanka. Was there a way to make daily commutes affordable and comfortable? That’s when the penny dropped. “India is a two-wheeler-dominated market. They sell five times more than cars. We felt why not use these vehicles and solve the commute needs [of Indians].”

The Swiggy-backed startup, which aims to break even next fiscal, is now taking on incumbents on their own turf. A year since it started its cab services, the company has grown its market share to 22%, claims Sanka. While Rapido’s cab business is mainly present in the Top 15 cities, it is betting big on Tier II and III cities with its bike-taxis and autorickshaws. “More than 35-40% of our business comes from Tier II and III cities in the bike-taxi business,” says Sanka.

He, however, believes that while Rapido could easily transition to the SaaS model, it won’t be smooth sailing for all companies. Sanka explains that Rapido, since it has a background in operating bike-taxis, is used to working with a low ticket size. “But for someone coming from a four-wheeler cost point of view, it’s going to hit revenues significantly,” he says. Rapido reported a 152% year-on-year growth in gross order value to ₹2,461 crore for the quarter ended September 30, 2024, while narrowing its losses in Q2FY25 to ₹17 crore.

Then there’s GreenCell Mobility, which is solving the daily commute problem while offering a green solution. The company, backed by climate impact investor Eversource Capital, runs electric bus brand NueGo that offers emission-free rides to inter-city travellers. “Buses are a major polluter. Our vision is to build a nationwide EV bus network,” says Devndra Chawla, MD & CEO of GreenCell Mobility, which recently launched the country’s first sleeper EV bus. NueGo currently operates around 300 buses.

Chawla wants to build a national brand for buses with NueGo, since 70% of India still travels by buses, he says. “In airlines, you have brands. In trains, there is Vande Bharat, etc. But in buses there aren’t too many brands in India and not a single national brand,” he adds.

EV bus penetration on inter-city routes in India is less than 1%, says Chawla. To run its e-bus operations smoothly, GreenCell is developing its own charging infrastructure. “We have installed 260 fast chargers in the major cities of India which range from 180-240 kW,” he says. GreenCell also has a contract business where it runs e-buses for state transport units in Gujarat, Maharashtra, and Uttar Pradesh.

Then there’s Zypp, which provides last-mile connectivity to the e-commerce sector, including the booming quick commerce space. The startup offers EVs-as-a-Service — carbon-free last-mile delivery, while also providing gig work to drivers. “Companies like Zomato, Amazon and Flipkart… everyone is talking about EVs. We don’t have to push it,” says Akash Gupta, co-founder & CEO, Zypp.

The startup operates a fleet of 20,000 electric two-wheelers in Delhi, Bengaluru and Mumbai, and aims to take this to 100,000 units over the next 18 months.

Currently, quick commerce contributes around 41% to Zypp’s business, followed by food delivery (30%), hyperlocal delivery (14%), bike-taxis (11%), with e-commerce accounting for the rest.

The startup charges delivery partners a rental fee. It also earns on deliveries through a delivery fee, which is determined on a base fare and per km pricing. It counts Zepto, Blinkit, Zomato, bigbasket, and Rapido, among others, as its customers.

About half of Zypp’s fleet consists of vehicles with a fixed battery, while the rest run on battery swapping. Gupta says that both versions work well. “In quick commerce, a gig worker charges the [fixed] battery at night. Bike taxis work well on swapping. In cases where distances are longer, swapping is better,” he says.

The Zypp CEO expects revenue to hit ₹500 crore in FY25. He says profitability is on the horizon within the next two quarters. It recently partnered with Indofast Energy (a 50-50 joint venture between IndianOil and SUN Mobility), to deploy 100,000 electric two-wheelers over the next 12-18 months.

While some startups are solving mobility needs, others are helping India achieve self-reliance in critical minerals like lithium, cobalt and nickel, which are key to the country’s transition to EVs.

One such venture is Lohum, founded by Rajat Verma in 2018. By the time the startup was founded, China had started dominating the critical minerals space. To provide an alternative, the Lohum founder & CEO felt India could tackle the critical mineral problem via recycling as it did not have access to these natural resources.

Now, 90% of Lohum’s business comes from the sale of rare earth chemicals and metals that are produced via recycling, while the balance comes from repurposed batteries. “We sell lithium largely outside India. Right now, the challenge in India is that there is a missing link. We produce chemicals and cell producers are also emerging but between them there is cathode-active material, and that is not being produced in India,” says Verma. However, the startup has set up a cathode-active material qualification plant in India for nickel and cobalt-based cathode. “It’s not a production plant. The purpose of a qualification plant is that you produce the material at a smaller scale and send it to potential customers. The qualification process takes anywhere between six and 10 months. We are in talks with all the cell manufacturers who are importing cathode-active material,” says Verma.

“In the two-wheeler and three-wheeler ecosystem, we are getting end of life batteries. In the four-wheeler ecosystem, we are getting defective batteries,” says Verma. “We recycle with 85% yield of lithium. We are hopeful that we will get to 95% yield in due course.”

Meanwhile, home-grown Ultraviolette Automotive is fulfilling India’s need for speed. The startup launched its electric motorcycle, the F77, in 2022. Co-founder and CEO Narayan Subramaniam explains that it is easier to launch an electric scooter now because tech has become a commodity. “A lot of battery and motor modules are readily available. A lot of companies assemble different components from different players,” says Subramaniam, who founded the startup along with Niraj Rajmohan, now Ultraviolette’s CTO.

“It has taken us five years to design, test, and validate this motorcycle before launching commercially,” says the CEO, adding that it takes a lot of time to develop tech for motorcycles.

Ultraviolette currently plays in the high-performance segment. But it plans to enter at least four different segments in the next two years. “All of the R&D that has gone into battery and motors enables us and puts us in a very strong position to aggressively start getting into multiple other vehicle segments,” says Subramaniam.

Currently, Ultraviolette is present in 12 cities. “Initially we focussed on Bengaluru. We wanted to streamline our production, supply chain and customer experience. Once this was templated, we started our expansion through dealer partners and company-owned stores,” says Subramaniam. The startup is also deploying a charging network called UV Supernova to facilitate intercity and cross-country travel for its customers.

For startups across the spectrum in India’s mobility space, the ride has just begun.