How To Start E-Rickshaw Business in India? E Rickshaw Rent Business.

Table of Contents:

1. E Rickshaw Business Plan

2. What Is E-Rickshaw Business?

3. Evolution Of E-Rickshaw Business Plan In India

4. Importance Of E Rickshaw Rent Business

5. Why Start An E-rickshaw Business In India?

1. E Rickshaw Business Plan

E-rickshaws contribute to this noble cause of curbing pollution. The governments worldwide are trying to combat pollution in a tranquil way but with a sound positive impact. E-rickshaws provides eco-friendly transportation at an affordable cost to the masses.

It has been a profitable and viable business option for India's entrepreneurs. The trend will continue in the future, considering the Government's constant emphasis on Electric Vehicles in India. This blog post will see about the A to Z's of electric rickshaw business in India.

2. What Is E-Rickshaw Business?

Electric rickshaws are the updated version of regular auto rickshaws. But the twist is that while auto-rickshaws run on conventional fuel like petrol and diesel, causing pollution, Electric rickshaws run on batteries that cause zero air pollution. E-rickshaws are further divided into cargo e-rickshaws and passenger e-rickshaws.

Physical Features of an E-rickshaw

So, what makes an e-rickshaw distinct from the traditional auto or manual rickshaw? According to the Motor Vehicles Act 2014 and Motor Vehicles Act 2015, an e-rickshaw is a

• Three-wheeled special purpose battery operated vehicle that can carry not more than four passengers, excluding the driver or not more than 40 kgs of luggage in total
• The maximum permitted speed limit is 25 km/hr, and the maximum motor capacity is 4000 Watts.

3. Evolution Of E-Rickshaw Business Plan In India

According to research by A.T. Kearney, a leading global management consulting firm, the network of e-rickshaws on Indian roads was around 1.5 million in 2018, which is bigger than the overall electric cars sold in China in 2011.

This paramount growth hasn't happened in one single day. E-rickshaw started to win the hearts of people even before sustainable transportation gained momentum. Below are some of the important events in the evolution of e-rickshaw business in India:

• The first e-rickshaw was attempted to be manufactured at Nimbkar Agricultural Research Institute (NARI), Maharashtra, in the late 1990s. Then, the main aim was to make changes in the manual rickshaws. NARI developed a motor-assisted pedal rickshaw.
• In 2000, the first electric rickshaw ELECSHA was developed by NARI.
• Since 2010, e-rickshaws have become an integral part of people's lives in the cities of Delhi, Lucknow, Varanasi, Ghaziabad, Dehradun, Udaipur, Indore, Patna, Bhagalpur, Ranchi, Coimbatore, and Puducherry.

4. Importance Of E Rickshaw Rent Business

Zero Air Pollution

The essential reason for electric rickshaws gaining momentum is that it does not cause air pollution. Because it is fuelled either by electrically charged batteries or solar-powered batteries, not by petrol, diesel, or Compressed Natural Gas (CNG), that causes hefty air pollution, for a country that is battling to combat air pollution, e-rickshaws come as a saviour to reduce air pollution.

Low maintenance cost

The maintenance cost of electric rickshaws are significantly low when compared to auto rickshaws. The spare parts of the vehicle are also not exclusive and can be availed anywhere based on the requirements.

Suitable for rural connectivity

E-rickshaws are very much ideal for narrow roads in rural areas. Rural and village areas use e-rickshaws to reach significant towns or cities. And also, it has a greater turning radius making it more preferable in heavy traffic routes.

Low operational costs

The running or day-to-day operating costs are low. Since rechargeable batteries power these vehicles, the recharge cost also is meagre. It is a great boon as the traditional fuel prices are skyrocketing, and it cost a fortune.

Creation of employment opportunities

More than a million and a half e-rickshaws are running on Indian roads, increasing the employment rate.

5. Why Start An E-rickshaw Business In India?

If you are still not convinced that the e-rickshaw business is the next big thing in India, below is some of the curated information from various researches that shows the performance and potential growth of the e- rickshaw business.

• More than 11,000 new e-rickshaws are bought every month in India.
• The annual sales are anticipated to be surged by 9% in 2021.
• With a whopping market share of 80%, e-rickshaws dominate the electric vehicle sector in India.
• By the year 2024, it is estimated that over 935.5 thousand units will be sold.

Are you still thinking about starting the e-rickshaw business? The Indian government has framed so many policies and provided assistance to increase electric vehicles' usage in India, e-rickshaws included. Following a list of such schemes launched by our government  to help entrepreneurs start the business:

National Electric Mobility Mission (NEMMP), 2020

It was launched in 2013 by the Ministry of Heavy Industries. This mission aims to attain fuel security in India through the usage of hybrid and electric vehicles. This mission’s target is to make 5-6 million electric vehicle sales by the end of 2020.

National Urban Livelihoods Mission, 2013

Launched in 2013, this scheme aims to reduce urban poverty by encouraging self-employment. As a part of this scheme, procurement assistance is provided to the owners/operators by facilitating loans in cities like Jamshedpur, Ranchi, etc.

Also read: E Rickshaw Manufacturers in India

Draft Taxi Policy, 2016

Introduced by the Ministry of Road Transport & Highways, it promotes urban mobility through e-rickshaws for last-mile connectivity.

Also Read: E Rickshaw Manufacturers in India

Pradhan Mantri Mudra Yojana (PMMY) 2015

Pradhan Mantri Mudra Yojana provides loans to small businesses with a low rate of interest, repayable within five years, under the following categories:

• Shishu - Loans up to Rs. 50,000
• Kishore - Loans ranging from Rs 50,001 to Rs Rs. 5,00,000
• Tarun - Loans above Rs. 5,00,000.

This scheme is applicable to the purchase of electric rickshaws as well.

Subsidy by Fame I

As a part of Faster Adoption of Electric/Hybrid Vehicles (FAME) I, scheme subsidy ranging from Rs 25,000 to Rs 61,000 is provided by the government for the purchase of electric rickshaws based on the model.

Subsidy Scheme by Delhi Government

Rs 15,000 is provided as a subsidy by Delhi State Government to e-rickshaw owners for vehicles purchased before 2016. Rs 30,000 is provided for vehicles purchased after 2016. Apart from this Rs. 6,000 is provided by the Delhi Pollution Control Board and the Department of Environment.

6. Problems In E-Rickshaw Rent Business

Despite having so many favourable advantages and government support, the e-rickshaw business still suffers from issues. They are:

• The majority of the players in this industry are unorganised.
• Overcrowding in e-rickshaws and rash driving. Hence safety during the ride is a significant concern.
• Long-distance rides are not possible in e-rickshaws; it is suitable only for the short route.
• The number of electric charging stations are low when compared to the fleet of e-rickshaws.

However, these issues can be rectified.

As the Indian government is working towards making the country an automobile hub in the next five years, focusing on the electric vehicles segment and establishing 2,000 electric charging stations this year alone, this is the high time to invest in the e-rickshaw business.

So the Tuk-Tuks are here to stay, winning commuters' hearts and filing the investors' pockets.

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FAQs

Q. What is the cost of an e-rickshaw in India?

Ans: Well, it depends on the type, the size, and the brand of the e-rickshaw. A cargo loader/ cargo e-rickshaw costs Rs.1,00,000 to Rs 1,70,000. Passenger e-rickshaws price ranges from Rs. 50,000 to Rs 1,50,000.

Q. Where can I buy an e-rickshaw?

Ans: Through e-rickshaw dealers and manufacturers.

Q. Do I have to get a license to operate an e-rickshaw?

Ans: Yes, just like any other regular vehicle, e-rickshaws also require a valid license to run on roads.

Q. What are the types of batteries that can be used in an e-rickshaw?

Ans: Lead-acid batteries and lithium-ion batteries are the widely used batteries in an e-rickshaw.

Q. What is the time taken to charge an e-rickshaw?

Ans: While a lead-acid battery-powered e-rickshaw takes around 7 to 10 hours for one charge, Lithium-ion batteries powered e-rickshaws can be charged in just 1.5 to 3 hours.

Q. What is the life of a battery in an e-rickshaw?

Ans: The life period of lead-acid batteries varies from 6 to 12 months, and the life of lithium-ion batteries can last even for five years.

Q. What is the maximum government permitted capacity for an e-rickshaw?

Ans: For a passenger e-rickshaw, the maximum permitted commuters are four, excluding the driver, and for cargo e-rickshaws, the maximum permitted capacity is forty kgs.