Bike startups had boomed just before the bans rolled out in Mumbai, Delhi

Funding, number of new startups had both risen significantly since the pandemic began

About a dozen new bike taxi startups had opened in India in the past five years, before recent action cast a shadow over their operations. Eight of them were founded after 2019 (Chart 1).

 

Including ventures from previous years, India had 46 bike taxi startups over the years, or one in every four such startups globally. And though these companies have collectively raised more than $317 million since 2015 (chart 2), not all have attracted equal funding. Rapido alone raised about $231 million in 2021 and 2022.

 

Bike aggregators in India have gotten into trouble over the legality of their services. The Delhi government banned bike taxi services from plying on its roads in February, saying they violated the Motor Vehicles Act, 1988. According to some estimates, Delhi accounts for a fourth of the 10-12 million bike taxi rides a week. In January, the Bombay High Court had asked Rapido to halt operations in Maharashtra as the firm did not have a valid licence.

Funding had risen significantly in 2022 ahead of such action, as ventures vied to dominate a market that was expected to grow nearly 30x by the end of the decade. Data from Allied Market Research shows that the bike taxi market in India was worth $50.5 million in 2021. The market was projected to jump to nearly 30 times that number and reach close to $1.5 billion by 2030 (chart 3).