
Leading the Revolution of Mobility in India — Bounce
“What’s Bounce?”, a friend who had recently returned from the US asked me. I’d been living in Bangalore over the last 3 years working for an investment bank. No wonder I didn’t have any time to use the app up until now.
“It’s a mobility app, that allows you to go from point A to point B”, I said. I finally had the time to use Bounce after I had quit my banking job. In fact, I had so much time that I was finally able to explore and use apps like Rapido, CRED, Dunzo… and Instagram.
Coming back to the topic of discussion — Bounce has revolutionized the way in which people commute servicing over 100,000 rides per day, in Bangalore alone in just under 2 years. Take a look at the co-founder’s tweet below:
A primary pain point of commuters in Bangalore is the time they spend in intense daytime traffic. Peak hour is all the time in Bangalore, except on the weekends where the commute is just a little bit quicker. Offshoot problems arise because of the intensity of traffic, one of which is that ride hailing apps such as Uber and Ola can only connect you with a driver partner but the time that the driver takes to get to you can go well above 15 minutes.
Another problem peculiar to Bangalore is the extremely high cost of mobility which is unavoidable as you’re often spending the premium to compensate the driver for sitting in traffic for long periods of time.
Enter Bounce — you cut out the driver completely, move to a small form vehicle and zip through traffic to save time and money. Of course, each ride costs Bounce in fuel and maintenance expenses of its vehicles but the potential to profit from each ride is far greater than the costs.
Let’s take a look at what their business model might look like: Say they have X number of scooters as their inventory for which they have spent Y in purchasing. They also need to spend Z for the helmets provided to the users (assuming 2 users on each ride, so X*2 number of helmets). So Y + Z is their initial capital expenditure. Going by current fuel prices and average scooter mileage, it should cost Bounce Rs. 2/ km for fuel and Rs. 1.5 / km in maintenance costs per ride (assuming maintenance is done in-house). They then charge the commuter a two-part fee based on distance traveled and time spent on the ride. This is where it gets interesting — in a city like Bangalore, the time spent on a ride can become more expensive than the per km cost because of the aforementioned intensity of traffic. What’s the result of this? Positive unit economics. A portion of the profit from each ride is then used to repay the financing cost of their scooters, i.e. pay down their debt.
Further, Bounce’s recent announcement of adding electric vehicles to its fleet with further reduce their per km cost leading to greater profitability per ride. Although, its debatable if they will be able to reduce maintenance costs on each electric scooter per ride.
Needless to say, with strong cash flows, a widely adopted solution to a mass problem and an iron will to go pan-India, Bounce is here to stay.
