yulu: Yulu finds a new suitable market as delivery hands roll on
The Covid-19 pandemic, however, has been a blow to all mobility companies and Yulu was no exception. As working from home has become the norm, its business has plummeted. But soon, something changed. After the second wave of Covid-19 last year, demand for delivery staff skyrocketed amid growing home delivery needs for food and essentials. Now, 60% of its revenue comes from delivery staff, said Yulu co-founder Amit Gupta. Gupta expects it to reach 80% by the end of the year.
Yulu’s pivot was more accidental than a calculated move.
The firm, competitor of Bounce and Vogo, is preparing to deploy its new model, YuluDex, more suitable for deliveries.
It also created new pricing packages for gig workers. Personal mobility prices start at Rs 10 as the base rate and charge Rs 1.2 for every minute used. Site workers can choose long-term plans which can go down to Rs 2/km. Will this model work?
Managing Yulu’s operations is not easy and involves different types of costs, such as acquiring assets, setting up infrastructure, including parking spaces, signage, signs, and asset maintenance.
“Then there are the operating ones like moving costs
“The solution was, of course, to get more people to use it,” the person said. “The gig economy model is economical that way… A gig economy worker will be a recurring user no matter what. It cuts a lot of those costs.” Gupta said after the second wave, the gross value of its goods increased by 20% compared to pre-pandemic levels.
The company earns Rs 200 from a vehicle per day when a construction worker uses it, compared to ₹S 125 per vehicle when used by a personal mobility user.
The Yulu bike has its limitations, however. A delivery manager for food ordering platform Swiggy told ET that there are two main classifications for vehicles in Swiggy’s systems.
One is the regular bike and the other is the cycles. Since Yulu belongs to the category of bicycles, orders over three kilometers are not allocated to the delivery person who uses a Yulu bicycle. However, the importance of Yulu increases in the fast trading or 10-20 minute delivery space.
“The more people order through Swiggy Instamart, the greater the order density,” he said. “Yulu can even set up battery swap stations in dark stores.” Dark Shops are small warehouses located in the heart of a city through which orders can be delivered faster.
For this to work, it needs more capital. Yulu last raised $7 million in debt funding from Magna International in December 2019, according to Crunchbase.
“We received a commitment for a large mass of money,” Gupta said. “We will announce at the right time.”