For Va-Yu It’s Word OF Mouth All The Way When It Comes to Building A Base

Va-Yu Or Wind, as the name translates in English, is a Delhi-based rental EV start-up that has found success in the rough weather of the Covid pandemic in its debut year. One year down, their plans have stood the test of some of the toughest market challenges and founder Ashish Aggarwal has learned some valuable lessons. Will the wind finally favor Va-Yu? We spoke to Ashish on the journey so far.

Q. Why EV’s? Did you consider other opportunities when you decided to turn founder?

Actually, the opportunity presented itself. We had seen how the country hit global headlines for its pollution in 2016, and even earlier, and that made me wonder surely we can do something about it. Our research showed us that vehicular pollution was a big factor in the most polluted cities, especially Delhi NCR, and within that two-wheelers surprisingly hogged a major share. Thus, it became obvious that targeting this segment for a shift to EV was key to tackle the pollution problem.

Q. So how has the journey been, considering how the pandemic came in just when you launched?

Frankly, it caused a disruption, but being our first year, it didn’t phase us as much as you would expect. We were still building up and didn’t have much to lose. The pandemic helped us see the opportunity in the space of long-term rentals for commuters and delivery. Workers suddenly found themselves struggling for cash flows ad a lot of people lost jobs. In jobs demanding their two-wheelers, people were in trouble, with not enough money to buy one, or even finance one. Our model, of nominal security (Rs 1000), very competitive monthly costs for rental, along with an all inclusive package of doorstep delivery & service made great sense suddenly.

Q. How has the response been?

We have a 300 strong fleet out on the roads today, and utilization levels have been at 97 percent. So much so, that we are not even trying to go for the short-term, hourly, or daily rental market as of now. With rentals ranging from Rs. 3069 to 3599 per month (depending on the rental duration), our offer has been good enough to require virtually no marketing, with word of mouth doing the job for us. In between the pandemic in a year, VA-YU has grown its fleet size 6x and the revenue has grown rapidly and VA-YU’s users have touched the milestone of 20,00,000 Km. In The Past Year, VA-YU EVs have made a meaningful impact on Delhi’s environment.

Q. How do the economics work for you? Are these costs sustainable?

See, we have done our homework on what we need to do to get from point A to B on our ambitions. We source our custom-designed two-wheelers from a contract manufacturer in Nasik, and at these prices, we are not out to lose money. We have a very strong focus on operational efficiency and that shows in our fleet utilization and uptime. Yes, it’s a learning phase, and we have done much already to keep costs down, as well as squeeze out the risks. From multiple anti-theft measures to strong partners on the insurance front, we have taken care to cut out risk as much as possible.

Q. Worldwide, especially in China and now in India too, fraud and vandalism have been an issue for two-wheeler EV firms playing the rental game. How has it been for you?

We follow a strict KYC policy, and so far it’s worked for us. We have not lost a single vehicle to theft, or even a case of total damage. Together with our manufacturing partner, we have designed a vehicle that can take the punishment rental vehicles can get. A VA-YU scooter is custom-built for city commutes as well as delivery segments and has many anti-theft features. Its 48-volt lithium-ion swappable batteries allow it to go up to 70 Kms on a full charge. Integrated GPS technology allows for geofencing, driver monitoring, and remote immobilization

Q. How do you differentiate in a market that is increasingly crowded?

We have started with word of mouth, and we are building on that. Being a first mover and having the largest fleet in NCR helps us get noticed, but it is our superior service that helps us retain customers and create WOM. It was WOM that got us our first cohort of users, and it is WOM that will recommend us for our service quality too. Yes, I say service quality because that really will be the key differentiator in this market. Today, in case of a breakdown, we try and get a team across in 2 hours or less. Our batteries are swappable, so users can simply take them out and recharge overnight. The market is huge, as we estimate it at over 150,000 in Delhi NCR itself, for people who would rent a two-wheeler.

Q. Have you considered the leisure segment? Surely it can offer you better realizations and less wear and tear on the machines?

Yes, we have considered it, however, our mission is to make EV’s mainstream and that means we need to change perceptions and target a large volume of customers. The leisure market is really too small and possibly makes sense in smaller markets like tourist spots in Goa, Manali, etc. But in metro cities, it simply doesn’t make sense to go for that, when the larger opportunity is so big. 

Q. Can you share a breakup between individual customers versus say, institutional customers?

At this stage, our customer mix is dominated by individuals, and that is by design. We have targeted individuals because that is where the acceptability of EVs has to increase, the B2B customers are already on the EV bandwagon and understand the advantages. Though we have been able to place almost our whole fleet on the road with just this category of users, we also have business owners who have rented vehicles for use by office staff and other such cases, but the major focus remains individuals so far.

Q. Do schemes like the FAME guidelines help you source at a lower cost? Do your EV’s qualify for incentives there? What’s your view on the long-term price trend for two-wheeler EVs?

As yet we have not utilized government grants under FAME and we are operating with vehicles that do not qualify for the incentives. We are nonetheless looking at FAME qualified also for future growth. We expect a cost parity of electric two-wheelers with petrol two-wheelers in the long term. We are also going to see more manufacturers and more research and development in the sector to reduce costs and to present more features to the customers.

Q. Are you bootstrapped currently? What are your plans for the future? What are the big changes you are looking to make besides more EV’s on the ground, post fresh funding?   

We are bootstrapped up to now and currently we are looking to raise capital through a pre-series A round. We would like to build on our success and increase our fleet by doing what has worked well for us, at the same time customer feedback is very important for us. We like to understand the needs of our customers and to make small tweaks to serve them better. We are also working on our IoT modules to collect more data, have vehicle diagnostics, and do predictive maintenance on our fleet. We believe that the EV revolution is in its very early days and that lot of R&D will go into the manufacturing side as well as on the fleet management side to make it a success.

Q. Do you think an out-and-out focus on the blue-collar segment changes the perception for you, should you need to consider expanding your reach to categories like students, etc, once universities open up?

Mobility needs in India are increasing at a very brisk pace. Be it students, work commuters, delivery executives or leisure riders more people are traveling than ever and they are traveling long distances. Our vehicle as well as our service is designed to cater to the needs of all these segments. It seats 2 people comfortably, it can carry the weight of cargo, it is safe, stable, zippy, and powerful and it has a distinct advantage in cost per km. All of this reflects in our customer profiles who are from across different social and economic backgrounds. Lockdown has created a situation where students and office goers are confined to home, however, once the restrictions are lifted, I am sure we will find a lot many takers in these segments as well. We have already built a reputation for superior service and excellent condition of the scooters in our fleet. Our customers are very happy to ride the good-looking and well-maintained scooters that we offer. That is a perception we are glad to maintain.