This Bengaluru startup is financing auto drivers to help them switch to e-rickshaws

Till date, Three Wheels United says it has worked with over 30,000 drivers offering them various products and services, financed 3000+ auto rickshaws.
Three Wheels United
Three Wheels United
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Cedrick Tandong, who was born and raised in Cameroon, Africa, was looking to build solutions that would help low-income populations. Having first visited India in 2008 for work, he found the country to be the ideal place for his entrepreneurial dreams. “I made the move back to India because at that time, India was already using mobile apps and smartphones which wasn’t the case at that point in Africa,” he says. 

After coming to India, he realised that he could create solutions and impact the lives of auto rickshaw drivers to help them build a sustainable livelihood. Cedrick is the co-founder of Three Wheels United (TWU), which was started in 2010 to focus on creating a more sustainable auto rickshaw ecosystem.

“Having identified a lack of adequate financing as one of the main challenges in the market, we began to act as a service company for banks to help drivers receive a loan. In 2017, we restructured TWU as a tech-enabled finance company that provides loans for auto rickshaw drivers to make a switch from conventional rickshaws to electric rickshaws.”

Cedrick says the overarching goal is to reduce the climate impact of the transportation sector by helping auto rickshaw drivers seamlessly switch to cleaner mobility. 

TWU finances drivers at a 23% interest rate -- as compared to NBFCs (non-banking financial corporations) providing loans at over 30% interest rate -- covering up to 100% of the cost of the vehicle and offers various tailored financing solutions to support the shift to electric vehicles. TWU’s loan tenure varies from 3-4 years and the loans can fund up to 100% of the asset cost versus NBFCs which fund up to 70% of the asset cost. TWU says it earns a fraction of the interest. 

It also has a rental model where it earns daily rental fees.

“Today, most auto rickshaw drivers rent their vehicles due to lack of access to funds. The income they earn is far from sufficient to sustain their day-to-day expenses. Drivers who want to buy their own vehicle depend on informal /unregulated money lenders and financiers who charge very high interest rates. Financial institutions stay away from lending to them due to high default rates. Due to these barriers, auto rickshaw drivers are unable to upgrade to a more profitable option such as an electric auto rickshaw,” explains Cedrick. 

For the EV rental scheme, drivers who are interested can contact TWU and submit the relevant documents (Bank and Aadhaar card). The drivers have to make a daily payment starting from Rs 300 depending on the city, for 26 days a month. It can be paid daily or as a lump sum amount at the end of every week. The driver can own the vehicle within 36 months of paying the rental fees. 

“EV auto rickshaws require very little maintenance; they’re easy to navigate and far more economical when compared to renting conventional 4-stroke engines. We are currently in partnership with Mahindra for this rental and we will be increasing our partners soon,” says Cedrick.

Having seen the low maintenance required for EV autos, drivers are now much more receptive to the idea of EVs, says Cedrick, adding, “To make the switch easier for drivers, we have also introduced an auto buyback programme where we help drivers to scrap their existing pollutive vehicles that are older than ten years and purchase a new electric vehicle. The buyback amount will be used as a down payment towards an affordable loan for the new electric vehicle.”

However, once the pandemic hit, it severely impacted the livelihood of auto rickshaw drivers, who saw a decline of about 30% in revenues at the start of COVID-19. Their income went to zero with the lockdown.

TWU claims it has created additional financial products to reach more drivers and worked closely with auto rickshaw drivers to address some of the day-to-day challenges that they face.

Some of the initiatives introduced included a mobile app for drivers where they could find all relevant local information related to COVID-19 safety and sanitisation protocols, government relief initiatives for drivers, service station locations, peer-to-peer vehicle rental, charging points for electric auto rickshaws and other resources.

It also leveraged increased home deliveries during the pandemic and connected auto drivers to grocery stores for delivery of essentials during the lockdown. TWU says it assisted a small fraction of drivers by connecting them with online delivery platforms. 

TWU is witnessing a lot of traction in tier-2 cities. “We are in 2-3 cities in Karnataka, like Chitradurga where we have a strong presence, Bellary, Hosapete etc. and extending into other places like Mysuru in the next coming months,” says Cedrick, adding that one additional reason for targeting tier-2 cities is that the impact of COVID-19 in these cities is lesser than that in the tier-1 cities. There is a lot of travel happening in these cities and many people are utilising auto rickshaws as their family mode of transport, he says.  

Till date, Three Wheels United says it has worked with over 30,000 drivers offering them various products and services, financed 3000+ auto rickshaws. This, TWU claims resulted in reduction of 22,000 tonnes of CO2 emissions, and the generation of an extra $20 million in income for the drivers. TWU plans to add 500 new vehicles in the next quarter. “We plan to finance 10k vehicles in the next 1 year and 100,000 vehicles in the next 4 years. We will expand our portfolio to include other income-generating light vehicles such as electric two-wheelers,” says Cedrick. 

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