Bounce has been catering to only 35 percent of total ride hailing traffic till Nov-Dec 2020, despite the lockdown having ended in June
Bounce, a private rental bike service company is on the brink of closure. The company, which was once valued at $450 million and had 600 persons on its rolls, is on an employee reduction spree. It is also learnt that the company has lined up all of its two wheelers for sale at an open ground near the Bharat Nagar Metro Station in Hyderabad.
Bounce had earlier laid off around 130 employees or 22 percent of its staff in June 2020. Now, the recent layoff has reduced its employee count by 80 percent and this time round it also includes some employees in the senior management level, leaving the current count to just 70 employees.
Cost Cutting in Times of Pandemic
The primary reason for this layoff and putting up bikes on sale are due to the current scenario in the country. The Pandemic has caused much havoc to various businesses while the overall economic situation in India is dismal. The two wheeler rental startup has hence had to resort to such extreme measures.
Having laid off some senior managers, it is now only the founders in senior roles that continue at the Sequoia Capital and Accel-backed firm. The earlier employee cost of around Rs.21 crore in February 2020 has been brought down to Rs.7 crore per month after the pandemic struck and will be further reduced to Rs.1 crore following the latest layoffs.
Bounce, which had earned Rs.8-10 crores per month in January 2020 has seen revenues dip to Rs.1 crore per month with a fleet of 3,000 scooters on the road, mainly in Bengaluru. Bounce CEO Vivekananda Hallekere stated that while in 2019, the company was keen to go after platform play and hired accordingly, the current scenario is not conducive and hence this decision. The company is also said to be working on the laid off employees to be placed in other organizations.
The senior employees who have been laid off are from steering products, operations, HR and engineering departments and this lay off now leaves four rungs of top management positions empty. As per reports, the company has offered three months of severance pay to the impacted employees while they will also be receiving all medical benefits till end of 2021.
It was in 2014 that Vivekananda HR, Varun Agni, and Anil G started Bounce as Wicked Rides. It initially offered premium motorcycle rentals under Wicked Rides, while the company later added commute bikes under the Metro Bikes label.
Push towards Electric Vehicles
Bike rental startups in India are making a beeline towards electric vehicles and are reducing their fleet size due to the fund crunch as an effect of the COVID-19 pandemic. A large number of bike rental companies are seeking to increase EVs in their fleets and are hence phasing out petrol scooters in their lineups.
Source: Bike - rushlane.com
