Vogo Business Model – the new way to go!
Picture this — you are a short distance away from your destination but not close enough for you to walk. No auto or bus nearby and surge pricing is attempting to dig too big a hole in your pocket to be a promising option. What do you do? The same question troubled the founders — Anand Ayyadurai, Padmanabhan Balakrishnan, Sanchit Mittal and they worked together to build the Vogo business model.
Vogo is a bike and electric scooter renting service available across several cities in India.
What does Vogo offer?
Vogo business model has come up with an innovative idea to provide people with easily accessible rental cycles and electric scooters to reach that last mile of their commute that would otherwise take a bigger toll on them.
Ability to rent and share a vehicle can be the next step of the company’s model. It would only seem logical for two people wanting to reach the same place to rent a bike or scooter together.
Reason Behind Vogo’s Business Success Model-
- It is affordable for everyone who is availing the service.
- Commute is an every-day problem for a vast portion of the people, be it at whatever time frame of the day. The rush is always there and to beat it in any way possible is a positive change.
- No keys are required. OTP is used to access the locks on the bikes. This use of IoT services within this implementation model was helpful.
- The use of apps makes it easy as everyone carries a phone around. The e-payment is also an asset to the working model of this service.
- This service idea works as people who use public transport on road might get stuck in traffic however, a scooter is easier of a vehicle to navigate through the swarm of vehicles. It definitely saves up the time used in travel.
- It is always fulfilling to know your life is in your hands. Since public transportation isn’t at the users’ discretion but the vogo bike is, it gives them the satisfaction of not being dependant on anyone else. Not having to run on government-designated timings is better.
YouTube Video, Vogo Working Model:
English Language: Click Here
Hindi Language: Click Here
Vogo Business Model Insight-
This model uses an IoT based supply chain. In addition to this, IoT is used to detect scooters that have inadequate battery hence request battery change rather than providing bad condition bikes to users. Thus, using new tech in the market attracts employees that have expertise in this category which otherwise was going to rather not-so-targetted use.
How does Vogo app work, booking a Vogo ride?
Much like every other application used to book things or order food online, vogo application brings to users, the same easy-to-use experience.
- Visit the app.
- Make a profile as a new user.
- Locate the nearest bike.
- Confirm the booking via e-payment. This would be valid until you receive a ride.
- Reach the point of the bike.
- Enter the OTP received and start your ride.
Vogo, investment insights:
Vogo has raised a total of 133 million USD investment. It is an amount that makes many people suck in a deep breath, but how did they do it? Answer — Venture Capital Financing. This is an iterative process that allows companies to raise funds for them, given, they survive each round of bidding for their shares to be sold to investors.
Vogo raised 4 million USD in series C bidding with the investor being Stellar Venture Partners. Other investors include Matrix Partners and Kalaari Capital. One of the biggest investors is Ola, with a total sum of 100 million USD invested. Ola brought to the company, along with its expertise, 100,000 scooters for the service.
Pedaling to Vogo’s revenue collection model:
There are several smart ways the founders are making money out of this e-smart biking business revenue model that’s been designed.
Paid promotions (not currently live)
The bikes and scooters can have paid promotions on them for gains. They are often ads of relevant items to be used with biking.
Penalties for damaging the cycle can be counted into the bill. In addition to this, any fine for incorrect driving can be fined in the payment.
Obviously, the fair for bikes that are rented is used for revenue collection. They are rented at a cheap price which dips to as low as 5 rupees per kilometer, at places.
What seems to be the problem with Vogo business model?
With a great vision of making India green, comes great obstacles that the team of Vogo seems to be handling but being a little unsteady.
Change isn’t easy
Any sort of change hasn’t been easily accepted in the country and hence, as melodious the sound of green India sounds, it isn’t going to be as easily accepted as a daily lifestyle habit, right off the bat.
Laziness gets in the way.
The number of times we put off a very important task just because we might have to get up says a lot about us. Having to ride a scooter or bike even for that last stretch of the distance can seem a lot for someone the people and hence would rather sit in public transport.
A lot of competition stands in the way of this bike rental company; yulu, ola, bounce are to name a few big ones.
The company seems to have debt overcasting them which they haven’t seemed to be able to fight off.
Quality of service
The bike’s condition and the working of the IOT service installed are supposed to be impeccable which can be a little hard to maintain with this growing network.
Renting a bike and riding it sure sounds like a very easy job to do but running the business sure isn’t a joyride in the park. Vogo has a clear vision for making a cleaner, greener India with availability of cheap travel options. Let’s hope we can make it happen.
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