Karnataka chief minister BS Yediyurappa, in his budget speech for the financial year 2020-21, proposed to implement an electric bike taxi project to improve last-mile connectivity in the state.
The government has allotted Rs 10 crore for the project.
The state also announced a grant worth Rs 100 crore to add 500 electric buses to BMTC’s (Bangalore Metropolitan Transport Corporation) fleet, according to the budget speech.
Last year in April, ride-hailing app Ola had moved the Karnataka High Court over the state government’s reluctance to issue licences for two-wheelers operators. The plea sought a bike-taxi permit, in line with a central government notification of 2016 allowing licences for two-wheeler operators.
Before issuing notices for violating licence rules and suspension of permits, the Karnataka government had impounded 200 bike-taxis in a week-long drive belonging to Ola and Rapido.
A total of 14 states in India now accept bike taxis and startups in these areas have been issued commercial licences.
The startups in this segment include Dot, TuWheelz, Rideji, Headlyt, Heybob, Zingo, Baxi and Rapido.
Last year in January, Rapido raised $10 million (Rs 71 crore) in a Series A funding round led by Hong Kong-based multi-strategy private investment firm Integrated Capital.
However, bike taxis are not allowed to operate in Bengaluru and Mumbai.
The Karnataka government had constituted a committee to study the bike-taxi model in October 2018.
The global electric vehicle (EV) market is projected to grow to 24.6 million units by 2026, representing a compounded annual growth rate of 32% from the 2.5 million units sold in 2018, according to a study by Fortune Business Insights. Fueled by increasing competition and government subsidies, and incentives to reduce carbon emissions, the EV market is set to see steady growth, the study noted.