BluSmart, EV Mobility Startup, Is Taking On Ola And Uber
Consulting firms ranging from Frost & Sullivan to McKinsey have pegged the ride-hailing market to touch $90 billion by 2030.
The all-electric ride-hailing platform BluSmart Mobility Pvt. will raise $250 million to expand its presence to six cities by 2024 to rival its conventional vehicle incumbents—Ola and Uber—in the sector.
“There is sufficient demand, but you have to gain the trust of the customer to realise the potential of this industry,” Anmol Singh Jaggi, the co-founder and chief executive officer of BluSmart Mobility, told BQ Prime.
Several consulting firms ranging from Frost & Sullivan to McKinsey have pegged the ride-hailing market to touch $90 billion by 2030.
But this potential will only be fructified if people have confidence in these companies, Jaggi said.
Anmol Singh Jaggi, co-founder, BluSmart. (Source: Company)
Post the Covid-19 pandemic, issues such as high CNG prices, shortage of drivers, surge pricing and frequent cancellations have led to a barrage of complaints against ride-hailing platforms across social media platforms.
BluSmart claims to solve these issues, simply by taking on the burden of expenses and freeing the drivers to focus on the driving.
“We don’t let our drivers own cars as they mostly come from the bottom of the pyramid who cannot afford them,” Jaggi said. “The drivers spend their time to make an income, instead of worrying about all the expenses that come with owning such assets.”
Even though incumbents like Ola and Uber are expected to gradually shift to electric vehicles, BluSmart is confident of maintaining its lead.
According to Jaggi, the primary reason customers use their platform is better performance on cancellation and surge pricing front, and not because of the electric fleet.
It is difficult for the incumbents to solve their problems by merely changing the fuel type and the shift may even compound issues, as they will need to build charging stations along with overhauling existing technology systems, he said.
The company started its operations in 2019 from Delhi-NCR and recently expanded to Bengaluru.
With a fundraise of $250 million on the cards, it plans to expand to more than six cities with a fleet of 25,000 cars by the end of 2024. The company has raised $75 million so far from funds such as BP Ventures, Mayfield, Survam Partners and 9Unicorn fund.
The ride-hailing platform has strategic partnerships with automaker Tata Motors Ltd. and charging infrastructure company Jio-bp—entities operated by two of the country’s largest conglomerates.
It has a total fleet of 2,700 cars, most of them Xpres-T EVs from Tata Motors.
While the company considers itself limited to the premium segment of the cab-hailing space due to the absence of smaller EVs in India, that could change with the launch of Tiago EV—touted to be the most affordable electric car in India.
“If we get the Tiago EV, we will be able to get a product which we can compare to smaller, economy product of rivals and lower the price point for the customers,” Jaggi said.
The company will look to induct a few hundred units of Tiago to their fleet after two-three months—as it is not available for commercial purposes yet—and expand it to thousands if the product is well-received by the customers.
According to Jaggi, the induction of smaller cars can reduce the price to Rs 14-15 per km, from Rs 23-24 with the current fleet of cars like Tigor EV.
BluSmart claims that their pricing in the premium segment is 15% cheaper than the competition on an average.
“At 14-15 rupees a km, the market size is 10 times bigger than the market size at Rs 24-25 a km,” Jaggi said.