How three bright minds beat all odds to build a strong scooter rental biz

A 2015 Chennai flood washed away his fleet of cars, but failed to water down Anand Ayyadurai's dreams; he built a fleet of scooters that became an instant hit in the vehicle rental space

“When someone looks out the window, I want her to see a Vogo scooter” — that’s the vision Anand Ayyadurai has set for his company Vogo, a dock-less scooter start-up trying to solve intracity mobility for daily commuters. 

While that may sound like a lofty goal, Vogo is clearly moving in that direction, establishing itself as one of the largest scooter rental companies in India. Recently, it signed a deal with Ola, under which which the cab hailing major will invest as much as $100 million in expanding Vogo's fleet of scooters, apart from providing it with customers. That's Vogo ticket to scale. 

Interestingly, Vogo’s ride in the scooter hailing space has not been very smooth. Starting off as a car rental company in 2015, Vogo lost almost everything it had even before it could service the first customer, when the fleet of cars it had put in place was damaged during the Chennai floods. 

Putting behind the shock of such a mammoth loss, the company thought of introducing scooters in the rental market, even as it waited to get the the insurance money for its cars. Slowly and steadily, Vogo began setting up a new business in vehicle renting, by placing its bikes at different colleges in Chennai, for starters. The move was an instant hit and Vogo also benefitted owing to the fact that it was and early mover in this space. Though it re-launched cars, scooters were the main service people used Vogo for and, by late 2017, the company shifted focus solely to two-wheelers.

“We exited the car rental business and thought that scooter rentals had a lot more potential. We felt that if you really want this (scooters) to spread across India and, possibly, you need to give people the option to go up to the scooter, pick it up and drop it anywhere,” says Ayyadurai, an alumnus of IIM-Ahmedabad, who worked in companies such as AstraZeneca, Flipkart and Housing.com before starting on his own.  

This is how the Vogo model works: Find a Vogo scooter parked at one of the designated locations, unlock it by scanning the quick response (QR) code on the vehicle with the Vogo app, and that’s it; you’re good to go. Once you arrive at the destination, leave the scooters at a Vogo zone, end the trip on the app, and simply walk to your office, the shopping mall or wherever else you're headed. The service is charged on hourly basis. 

The concept, now popular in the West, is fast gaining ground in urban centres in India. With Ola and Uber, which hooked users to a whole new experience of on-demand mobility, people are ditching vehicle ownership and moving to pay-per-use options. Yet, there are gaps on the demand side, as people want more modes of transport moving from point A to B. 

“The opportunity is not coming from the person, who for example wants to go to Pune from Mumbai, but someone who wants to get to his office from home,” Ayyadurai adds. 

The company put out an initial pool of scooters and built the locking and unlocking technology into the vehicle itself. The next challenge was to create hotspots where the scooters could be placed, and parking areas where people might want to drop the two-wheelers off after using them.

Though Ayyadurai knows that the opportunity ahead is huge, he has adopted a strategy to go small, expand to one location at a time after properly testing the market. Vogo currently operates in 3-4 localities in Bengaluru and Hyderabad. “Our focus is to go deeper into the localities where customer is located. The idea is that a user shouldn't have to travel more than 200-300 meters to get to the scooter," he says. 

The three-year-old start-up doesn't believe in blowing up money to put in place a huge team. While Ayyadurai looks after product development, branding and analytics, the other two co-founders -- Sanchit Mittal and Padmanabhan Balakrishnan look after technology and operations respectively. Over the next few quarters, Vogo’s vision is go deep into Bengaluru and Hyderabad and add more electric vehicles to its fleet.