Anand Mahindra bats for electric kick scooters in India, says happy with Scoot investment

Michael Keating, founder and chief executive officer, Scoot Networks, said electric vehicles are the future of mobility and he thinks that biggest issue with electric kick scooters is theft.

Michael, a strategist, designer and environmentalist, is building 21st century mass transit systems in San Francisco, California, Barcelona, Santiago and other cities globally. He is a graduate of Wesleyan University, the Harvard Graduate School of Design, and Harvard Business School.

Mahindra: He is still here by my side and we are still smiling at each other. So things are going well. He was a customer first. You are aware that we started manufacturing electric scooters in Detroit, designed in California and it was a punt. We just designed this way before electric two-wheelers were in vogue and we said let us see who is going to buy this.

Interestingly, fleet companies like Scoot, which had already been focusing on shared mobility and this gentleman here is one of the visionaries, he did this in 2012, when Uber was starting up. So, he became a customer and then we got introduced to Scoot and I was intrigued. The Mahindra Partners decided to make an investment and now we are a major investors. We are very happy. He is moving gradually, but very irrevocably into multimodal offerings. So, he started with electric scooters, but he is already into ebikes. I think in some places he offers ecars as well or he will be planning to and then of course what we are going to talk about kick-scooters. So, the most exciting news was three-months ago, he won the franchise along with one other company to provide kick-scooters in San Francisco and he beat out all the big boys in that. So, am I happy that we invested? Yes.

Keating: I have been to India few times in the past mostly for Mahindra.

Keating: It has been surprising how positive the feedback has been.

People have been very encouraging of the idea of a vehicle that anyone can ride.

It's electric vehicle that you can pick up at one place and drop off at another. So, we are really happy to be here and hear such a positive reception from such important people in the government of India and in Delhi.

Keating: There is so much demand for better transportation in cities whether it's faster or more affordable or more convenient and competition is actually something we don’t worry about in Barcelona and San Francisco and I don’t think we would worry about it here also. I think the big challenge is offering a great service, maintaining the vehicles, keeping them recharge, making sure they are there when people needed for ride and to meet just an incredible demand that people have for better mobility.

Mahindra: One forms an expectation when you have a definitive view of what the future is going to look like. I cannot claim I do, I cannot claim anyone in the world knows how the landscape is going to pan out. What I look for, from where I am coming from, is does the leadership in this country have a commitment to moving towards electric mobility. If they do, and let’s face it, all their statements have been in alignment with that goal, whether it’s from Prime Minister Narendra Modi to Piyush Goyal, who made that famous statement about wanting the cars to be electric in 2030. I haven’t seen the waiver on that goal of moving towards electrification and even when oil prices began to fall, they said no.

So, I believe there will be a lot of experimentation, what is the right template, regulatory template and should there be subsidies. Let’s take charging stations. I came from MIT earlier this year and there is a new company which talks about induction charging. So, a car gets into its garage, it sits over a plate and by the next morning, it’s charged. If that’s the kind of world we are going to have or even highway charging while in motion, should there really be an enormous impetus in setting up charging stations. That sounds like heresy coming from me, but all I am saying is do not blame anyone for...

Mahindra: We will keep goading them to move faster and we will keep goading them to live up to their commitments to take more from us as we have invested. Those to me are the smaller hiccups that will come, but happily they haven’t waiver in their commitment to put electric cars on road.

However, going back to your question about when is the inflection point. I do not even think a futurist will be able to tell you. There is this guy, Tony Seba at Stanford University who says all cars will be electric by 2020. Do I agree with that? No. My view is given where batteries are, even though the cost will come down, there is going to be variation in cost of lithium, in cobalt availability, so one doesn’t know.

Inflection point will come in fleets, they will come in ride sharing as ultimately you break even the more you use. The more kilometers you put on a car, then you get to a break even. So who is using more kilometer? Not personal transport. It's in the fleet and shared transport.

Keating: For that product, it was $2 a ride in the US and most of that cost is actually our labour. It's the time we put into maintaining the vehicles and recharging them and the cost of the vehicles itself is a pretty small fraction of that. So, when you think about going to other parts of the world where people have a different willingness to pay, for example, India most of the cost of providing our service is going to come with the people that we hire to maintain, recharge these vehicles and the cost is whether the vehicle cost more or less is not going to be most important things. So, we think the service adapts really well to different markets with different willingness to pay.

Mahindra: San Francisco choose Scoot as they believe Michael had, if not all the answers, had begun to address all these issues about safety, about driving on the pedestrian walkways and pavements when you ought to do that. To talk about vandalism, they are putting the lock in, there is a software lock, there is a GPS tracking capability and there is a code that they are going to put around it. Everyone is working on these solutions real time. I believe all the solutions haven’t emerged, but given how the market is valuing all the players in this area, the market believes this is the right solution and we will find answers to all those thorny issues.

Keating: Our riders have loved this product and they used it for all kinds of short trips. It gets actually used more often than many of our other types of vehicles.

This vehicle need to be secured and to be kept good track of with GPS. The technology that we develop at Scoot to manage these fleets is our job to make sure that these vehicles are there when our riders want to ride them. Developing those technologies, practices and locks are the things that are part of our value.