Shell Foundation and EMBARQ India back three startups in the $10 billion Indian auto rickshaw industry
Auto rickshaws, also adorably known as tuk-tuks, are one of the biggest modes of transport in India. If Wikipedia were to be believed, Indian three-wheelers have followed the original design of the Piaggio Ape C from 1948, which was originally based on the Vespa.The three-wheeler vehicle is found in almost every city and a report in ‘The Hindu’ quoting EMBARQ says that across India, auto rickshaws make more than 229 million passenger trips per day. That number is expected to more than double to 482 million by 2031. The range runs from 15,000 to 30,000 vehicles in medium-sized cities (population between one and four million) to more than 50,000 in large cities (population greater than four million).
It is more than a $10 billion market but an unorganized one. Almost every other city in India has problems in the area -- be it strikes, overpricing or issues on basic rights. Shell Foundation has been supporting sustainable mobility initiatives for over 12 years having co-created EMBARQ an international network of expert centres catalyzing the implementation of sustainable transport and urban planning solutions. Through their support to one of the regional centres - EMBARQ India, they recognized the importance of the intermediate transport sector, including auto rickshaws, as a means of providing mobility and accessibility to city dwellers in India.
“We know improvements are needed across the industry for auto rickshaws to truly deliver an easily accessible, clean and safe transport service with transparent fares to their customers and provide a sustainable living for their drivers,” says Judith Pollock of Shell Foundation.
Shell Foundation hosted the Rickshaw Rising Challenge with EMBARQ India to identify and support leading entrepreneurs in this sector who are bringing about change. Eight companies were shortlisted in February and out of them, three winners have been selected. Autowale won the first prize of $50k (see our recent coverage) while AutoRaja and Three Wheels United were the runners up ($25k each).
All three of them pitched their business to Robin Chase (ZipCar), Harish Hande (SELCO), Judith Pollock (Shell Foundation), and Madhav Pai (EMBARQ India) on the third day of the event:
The first award of $50,000 and a six-month business support went to Mukesh Jha and Janardan Prasad of Ubida from Pune. The company addresses auto rickshaw hailing problems on the consumer side and optimizes rides and income for drivers.
The second award of $25,000 and a six-month business support went to Aishwarya Raman and Anubhav Agarwal of AutoRaja from Chennai. AutoRaja runs auto rickshaws on call with the aim of creating dignified lives for drivers by increasing business and facilitating access to finance, healthcare and education.
Three Wheels United
The third award of $25,000 and a six-month business support went to Ramesh Prabhu of Three Wheels United from Bangalore. TWU addresses problems in the auto rickshaw ecosystem through financial services, alternate channels of revenue, and bringing in a shift to cleaner engines.
The auto rickshaw industry is one of the toughest one in India to create a business in. redBus successful did it with buses and there are a lot of players trying to do it for cabs. The auto rickshaw industry was largely an untapped one. “We see a lot of investments in the cab aggregation space but VCs seem to be very apprehensive of the auto rickshaw space,” says Janardan, Co-founder of Autowale.
They’ve had a challenging ride but have done a phenomenal job in Pune. The company has managed to bring together 1000 auto rickshaw wallahs over the last three years. They have also tried out a lot of models and are currently working with the subscription model where a driver buys the subscription (~INR 5,000) and Autowale then sends in business to them. Drivers are earning up to INR 35,000 via Autowale. “We’ve had a very good learning curve and are determined to make a strong mark in this space,” says Janardan. The company is contemplating about entering Bangalore as well.
The Rickshaw Rising competition has a bigger picture for Shell Foundation and EMBARQ India as well. There were 38 applicants to this inaugural challenge, including the 8 finalists who attended a 3-day selection bootcamp. Following the event they will all be connected together with other entrepreneurs in this space as part of new online community. “Our support doesn’t stop here. We look forward to working with the three winners to help them to build large-scale, sustainable, auto-rickshaw businesses as well as interacting with the wider mobility sector through new platforms initiated by the challenge event. This will allow us to support broader change, understand the market barriers that need to be overcome and where our future support can best be targeted,” says Judith. Shell Foundation has started exploring ideas with EMBARQ India for a next mobility challenge event – to find innovative transport solutions that will improve the quality of life in cities.