A few days ago, news started pouring in that Bengaluru-based last-mile mobility startup Bounce had raised close to $105 million in Series D funding.
And we need to talk about it.
Now if you have not heard of Bounce as of yet here’s a quick introduction. Bounce operates over 20,000 dockless bikes and scooters in over thirty cities in India (But mostly, in Bangalore). Dockless meaning you can pick up the vehicle and drop it any point you wish. You simply log into the app, see if there’s a Bounce vehicle near you, go to the spot, enter an OTP and you’re on your way. Once you’ve completed the ride, you can drop the vehicle wherever you like. There’s no designated drop spot per se. So this introduces a level of convenience that you hardly get elsewhere. And people have taken to Bounce with loving arms. Bounce clocks around 1.2 lakh rides per day and allows customers to pay as little as 1 Indian rupee for the first km.
But the dockless mobility revolution has always been plagued by one very important question. Is it economically viable?
For starters, there is the capital outlay. You have to buy a large number of vehicles in the hope that you can put them to good use before they wear out. In the off chance that the utilization levels are low, you’re going to have a lot of trouble trying to turn a profit on your investment. And so, an optimal solution is to manually intervene and ensure your fleet is well dispersed. So every night your personnel physically move the vehicles from no man’s land to hotspots like malls, town squares and popular Restaurants. Ergo, anyplace where you are likely to see higher footfall and higher utilisation levels. But this imposes another constraint. Now you have to spend considerable sums of money in employing people who will ferry your vehicles around the city. The only possible alternative is to achieve scale which would likely render the whole exercise useless.
Imagine having so many Bounce vehicles that you are likely to find one every street, every corner and every gully you could possibly think of. That would be the ideal scenario. But can you actually get there without compromising on utilisation levels? Perhaps not. Maybe the best-case scenario in real life is to strike the right balance between total fleet size and the manual ferrying operation. And hope it’s good enough to build a profitable business model.
Another fundamental question is this — Can you actually bring down the cost per km to levels where Bounce becomes cheaper than every other transport option out there. Right now we have Bounce offering travel options starting at Rs 1/km. But this, in all likelihood is due to the Venture Capital Money flowing in from all sides. So how does one get to these ridiculously low fare charges without external funding?
One possible alternative is to introduce an all-electric fleet. This way you can bring down the running cost considerably — from Rs. 2.5/km to Rs. 0.5/km. However, it introduces another challenge — charging. To top it all off, you also have to take into consideration that electric scooters cost way more than your regular run of the mill gasoline scooters. All in all, capital outlays are going to increase simultaneously.
And if all this doesn’t work, there is one final argument. Pivoting to a docked model — where users pick up the vehicle from a designated spot and then drop them at a specific spot. This way you can exercise a higher degree of control on your fleet and it also reduces a lot of operational overhead helping you improve your profitability metrics.
Either way, it’ll be very exciting to see where Bounce heads from here on in and here's hoping they finally figure out how to crack the shared mobility ecosystem.