Startup creates electrifying finance for India’s tuk-tuks

Three Wheels United is using analytics and fintech to help drivers financing electric tuk-tuks, supporting green transport and small businesses

TWU Tuk-Tuk driver/owners have an app to help them get more fares, optimise routes, and improve performance from their trikes.
TWU Tuk-Tuk driver/owners have an app to help them get more fares, optimise routes, and improve performance from their trikes.

Last mile transport is an issue for many cities, and while many cities have established options, such as tuk-tuks or motor trikes, many of these vehicles are still petrol-driven, adding to urban pollution.

Startup Three Wheels United is aiming to address this issue, with a solution to encourage electrification of last mile transport, while at the same time providing business opportunities for people in the global south.

The company has launched in India, where the three-wheeled tuk-tuk is a common last mile option. TWU’s model makes it easier for drivers to buy their own electric tuk-tuks through - greening the last mile, while also supporting small businesses, and in turn helping them pay back loans and build better long term prospects.

Company CEO Cedrick Tandong explained that TWU makes loans to purchase of electric tuk-tuks, usually of $2,000-$3,000. Use of new fintech capabilities is where TWU stands out from similar schemes however – with a mix of telematics providing data from the tuk-tuks, and mobile apps keeping TWU in touch with their drivers and agents.

TWU has financed over 2,400 vehicles so far, says Tandong.

“This holistic loan management system uses behavioural data and telematics data, driven by AI and ML to allow us to make smart decisions, while maintaining the critical human elements required in lending to this clientele. Our technology is a modular system with mobile applications for our collection agents and for our clients as well as a AI/ML engine and back-end loan management system,” Tandong said.

In order to ensure loan repayment, one of these modules is focused on supporting the drivers to generate more income.

“To improve client income, we provide them with heatmaps, client data, and optimized routing and we connect them to alternative revenue streams such as ride hailing and advertisements. We use the data from the vehicles’ telematics and battery monitoring system to encourage behaviour that improves the profitability of the vehicle. This includes pushing notifications to drive in the optimal speed range and to charge the battery in a certain manner that improves the vehicle's life,” he said.

At the same time, the drivers are encouraged to pay back their loans, using proven microfinance principles such as peer pressure, nudges and social competitions, Tandong added, while behavioural data collected from drivers allows agents to prioritise those that need most support. This smart approach means an agent who would normally handle 30 loans is able to manage 100 or more, and TWU has a loan default rate of less than 1%, compared to 30% in the market.

With over 2,400 vehicles financed, TWU estimates it has eliminated 26,400 tonnes of CO2 emissions, and generated an extra $86m in income for its ecosystem.

To increase penetration of electric transport, TWU is working with metro operators in Indian cities to install low-cost or free charging points for tuk-tuks, to provide a sustainable last mile solution for the metro, improve the drivers’ profitability and ease public transport travel for passengers.

TWU has been recognized by the Climate Policy Initiative and it’s partners of global banks and DFIs for being one of the world’s most innovative models for climate finance in the global south, Tandong added.

The company recently participated in the Techstars Dubai Accelerator, Tandong added.

“The Techstars Accelerator helped us shift our attention globally and be able to grasp the full potential of our solution,” he said. “We plan to license this technology to other financiers while also offering them debt funding for them to finance income generating electric vehicles in other countries in the global south.”

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