Yulu is in talks to raise a $40 million funding round for its new gig workers-focused vehicle Yulu DEX. This funding round will be a mix of equity and debt, CEO Amit Gupta told BusinessLine . The company plans to add 10,000 Yulu DEX bikes across Bengaluru, Mumbai, and Delhi in the first phase, by December 2021.

The company started bike rentals for gig workers last year and claims to have seen a great market response. During India’s second Covid wave, Yulu’s revenue share from gig worker rentals has grown from being in the single-digit to almost 20 percent of the total revenue. This is when Yulu recognised the growing demand for a new category of vehicles. “Quick commerce companies are getting bigger and most of these companies require gig workers to deliver a product or a service. On the other hand, there are several people in India, who are either looking for employment or additional income. But, they do not have a driving license or a bike to become a gig worker. So we saw this white space for someone offering mobility as a service,” said Gupta.

License not required

As compared to Yulu’s people mobility vehicles, Yulu DEX will have an added carrier with a luggage capacity of 12kg, better seats, and high-duty shock absorbers. These bikes will have a range of 60 km per charge, a maximum speed of 25 km/hr , and would not require a driver’s license to ride. Each of these new bikes cost approximately ₹50,000 to Yulu, which they rent to gig workers for a daily fee of ₹200 along with refundable security of another ₹200. Yulu DEX is said to save 30% costs for gig workers as compared to what they spend with petrol-powered vehicles.

According to Gupta, a typical delivery guy uses Yulu for around 60kms to 70kms. In comparison, if they used a petrol vehicle for the same distance, the petrol cost itself will be ₹200. In addition to the fuel costs, they will also have to pay the EMI, repair, and maintenance, etc, for that vehicle. So the notional cost is another ₹125-₹250. “Now, because we rent the vehicle for ₹200 inclusive of all costs, gig workers don’t have to worry about these extra costs. At this price point, we also make a good margin to take care of our own unit economics,” Gupta added.

Also read: Yulu partners with PUMA to roll out free oxygen concentrators

For customer acquisition, Yulu has partnered with food and goods delivery companies. These apps will act as a referral channel for Yulu to reach gig workers. According to a Twitter handle going by the name @DeliveryBhoy, delivery partners of Zomato have already started seeing Yulu bike rental plans on their partner apps. The screenshot shared by this Twitter account showed that Yulu is offering a 5 percent discount on the rentals accessed through Zomato.

Currently, 1,500 out of 7,500 Yulu bikes in Bengaluru are being used by the gig workers. “There is a mix of full-time delivery executives and part-time workers who rent our bikes, so there are about 2,000 - 2,500 gig workers using our service on any given day,” Gupta added. Overall, Yulu has a total of 10,000 vehicles on the roads across Delhi, Mumbai, and Bengaluru. In the next three-four years, Yulu plans to deploy close to a million vehicles across the top 15 to 20 Indian cities.

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