In this post I will try to present a comprehensive review about Drivezy two wheeler attachment ranging from details of RoI(Return on Investment) on two wheeler attachment, procedure involved to attach two wheeler, present situation with bookings and pay out to Drivezy partners. Those interested in car rental business must check out my previous post Investing in car rental business (with actual returns from Drivezy).
As covered in previous post two wheeler rental business in India starting your own two wheeler rental business comes with several statutory requirements. This makes starting and running a two wheeler rental business more of a full time activity. For individuals that would like to generate passive income by investing in two wheeler rental business, attaching a vehicle with an existing two wheeler / bike rental platform would be the way to go.
Choosing a Bike Rental Platform to Attach Vehicle
For a passive income I choose to invest in bike rental business via Drivezy JustConnect (JustConnect is the partnership program from Drivezy for attaching vehicles). The primary reason for going with Drivezy was I had already attached a Hyundai Eon with Drivezy. This car attached seemed to be doing okay, at least at the time of my decision to invest in two wheeler. I have discussed this in detail in my other post that I have mentioned at the beginning of this article.
Drivezy offered a 48 month contract period for a new two wheeler that is listed on their platform. A 4 year long contract looked favourable and was one of the factors why I went with Drivezy.
The other option I was considering was Wicked Ride (part of Bounce – a hourly bike rental platform). Wicked Ride also offered a partner program for bike attachment. The Wicked Ride partnership program may not be active at present. I reached out to WickedRide to check on this but there was no response from them.
Procedure To Attach New Two Wheeler on Drivezy Platform
First thing would be to choose the bike that you want to attach. Back in 2018 the choices available for investment were: Royal Enfield Classic 350, Royal Enfield Thunderbird, KTM Duke 250, Aprilia150, Yamaha Fascino, Yamaha FZ, Bajaj Avenger 220, Bajaj Dominar, Honda Dio.
I had attached two bikes with Drivezy. First an Yamaha Fascino and then an Aprilia. When I attached Yamaha Fascino by August 2018, I was asked to visit Yamaha show room to choose the vehicle and make the payment directly at the showroom. I was instructed to visit Vinayaka Yamaha in Domlur, Bangalore to choose the vehicle. After completing the payment I was asked to send scanned copy of bill to Drivezy as confirmation.
Post payment it took 5 weeks for the vehicle to go online in their platform. I was said the formalities were taking more time than expected and hence the delay. The RC book would not be in your name, the vehicle would get a black board number plate.
Lured by the guaranteed return clause I decided to attach an another two wheeler on their platform. I choose and attached an Aprilia by June 2019 for my second listing. This time the on boarding procedure was different. Rather than visiting the Showroom and making direct purchase I was asked to transfer the amount to Drivezy bank account. They had a current account with Yes Bank in Mumbai with IFSC code YESB0CMSNOC (When I listed my Hyundai Eon the previous year they had asked to transfer money to Axis Bank in Victoria Layout, Bangalore).
All Drivezy vehicle have a GPS tracker installed in them. The cost of fitting GPS tracker was Rs 2,000. The below was the quotation split for the Aprilia that I attached to Drivezy
Ex showroom after discount: Rs.81,690/-
GPS tracker: Rs.2000/-
Total investment cost for Aprilia: Rs 1,04,408/-
After a few months of completing payment I was asked to drop in to Drivezy office at Bangalore to counter sign and receive the Vehicle Rental Agreement, that was a 11 page article 12 bond of Karnataka. I have put a snap of first and last page of the agreement below.
The vehicle rental agreement would be with AS Justride Tours & Travels Private Limited, which is the registered name for Drivezy.
Monthly Charges Deducted From Payout By Drivezy
Each month Drivezy would deduct the below three charges and make the pay out
- Parking charge of Rs.300 for two wheeler attachment.
- IOT device charge of Rs.200 for two wheeler attachment.
- TDS (Tax Deduction at Source) at 2% of pay out amount.
The payout for a month was usually done before 10th of subsequent month.
Drivezy Minimum Guaranteed Payment
Up until early 2020 Drivezy had a minimum guaranteed payment clause. Irrespective of revenue generated each month Drivezy offered an agreed minimum payment for each listed vehicle. The clause was applicable for both 2 wheeler and 4 wheeler. The minimum guaranteed pay out would be an amount that is sufficient enough to cover EMI charges of the vehicle. The minimum guaranteed pay out scheme made things look very lucrative, until it was abruptly cancelled in the beginning of 2020.
The minimum guaranteed pay out was not applicable in months when the vehicle was blocked by partner (the person attaching the vehicle to Drivezy) for his personal use, even if it is for a single day in the month or just for a few hours in a day.
Return On Investment For Attached Vehicles
As per the contract with Drivezy the revenue is shared on 70:30 basis. 70% of monthly revenue generated from the two wheeler goes to the partner, 30% goes to Drivezy.
There was not a single month where the revenue generated from vehicle booking was higher than the minimum guaranteed pay out agreed as per the contract. This was the case with both Yamaha Fascino and Aprilia that I had listed with them. Thankfully the minimum guaranteed payout came for the rescue..
For an example, in the month of December 2019 my Yamaha Fascino generated revenue of less than Rs 700. To reach the minimum guarantee amount Drivezy added Rs 2085.51, after which pay out for the month was Rs 2,220.68 (after monthly deductions I mentioned above). Below is a snap of the December 2019 monthly pay out statement.
But things went sour after the minimum guaranteed pay out which acted as a cushion was removed abruptly by early 2020.
Current Situation On Earning and Payout
From early 2020 there was a hint of situation getting tough for Drivezy. The monthly pay out to partners were getting delayed. The COVID crisis that followed was the final nail in the coffin. Situation appeared to get bleak with each passing day at Drivezy.
Forget about earnings, it is unclear on what is happening with the vehicles attached with Drivezy. The partner’s dashboard portal to track the vehicle booking are not updated any more. Below is a screen shot from Drivezy Partner Dashboard at the time of writing this article. It can be observed Drivezy stopped reporting revenue and booking details.
I like many other Drivezy partners think we would be lucky if we even get our vehicle back. The partner support team has gone completely incognito, or much worse many of the Drivezy employees might have been fired owing to covid crisis. It simply has become impossible to reach out and get any information.