Electric vehicle ride-hailing startup BluSmart is preparing to exit its core business and transition into a fleet operator for Uber. This strategic pivot comes nearly six years after BluSmart launched its services, and it marks a significant shift in its business model.
According to sources familiar with the development, BluSmart’s shareholders have approved a plan to begin transferring its fleet to the Uber platform in phases, starting with 700 to 800 vehicles over the coming weeks. Once the transition is complete, BluSmart will shut down its own ride-hailing platform.
The decision follows mounting financial stress, including a monthly cash burn exceeding ₹20 crore. Founders Anmol Singh Jaggi and Puneet Singh Jaggi, who together hold over 25% equity in the company, have been propping up the business with personal capital alongside funding from external investors. BluSmart, which operates an all-electric fleet, plans to integrate with Uber’s “Green” service, which aims to include 25,000 electric cars via fleet partners such as Everest Fleet, Lithium Urban Technologies, and Moove.
Mounting Financial Pressure and Fundraising Hurdles
BluSmart’s pivot comes amid worsening financial health, further exacerbated by a funding crunch at Gensol Engineering—a solar engineering, procurement and construction firm also promoted by the Jaggi brothers. Gensol owns more than 5,000 of the 8,000 electric vehicles BluSmart operates, and the crisis at Gensol has made it difficult for BluSmart to secure additional financial backing.
Earlier this year, BluSmart attempted to raise $50 million from existing investors but failed to attract fresh capital. As a result, the company delayed salary payments for the month of March. In an internal email, cofounder Anmol Jaggi assured employees that salaries would be paid by the end of April, starting with those in the lowest pay brackets.
Currently, BluSmart is hoping to secure a $15–$20 million investment from Uber, although sources say this will depend on how successfully the fleet transition unfolds and whether certain performance milestones are met. Under the proposed arrangement, BluSmart’s vehicles—whether owned or leased—will start operating on Uber’s platform, with the startup receiving a portion of the fare revenues after Uber deducts its commission.
Vehicle Sale Deal Collapses, Gensol Seeks to Offload Assets
A deal between Gensol Engineering and Chennai-based Refex Industries to sell 2,997 electric vehicles was recently called off. The condition of the vehicles, which were being used by BluSmart, reportedly played a role in Refex’s decision to walk away from the transaction. Refex is already a fleet operator for Uber and is said to be reevaluating the deal, taking into account financial, operational, and legal factors.
BluSmart’s asset-light business model was heavily dependent on Gensol leasing vehicles to it. With Gensol now trying to divest those vehicles to cover its debts, BluSmart’s cost structure is under renewed stress. New leases from Gensol have also stopped since early last year.
Shrinking Ride Volumes and Rising Competitive Pressure
BluSmart’s operational challenges have resulted in a significant drop in daily ride volumes. The platform, which once handled 25,000 to 30,000 rides per day, is now seeing less than half of that. Additionally, the company has scaled back international ambitions, shutting down its operations in Dubai and shelving expansion plans for Saudi Arabia.
Meanwhile, Bengaluru-based Rapido has launched an aggressive campaign to poach BluSmart’s driver partners, offering higher payouts and incentives. In Bengaluru, some users have even reported receiving BluSmart vehicles while booking rides through the Rapido app, signaling an erosion of platform loyalty.
Leadership Exodus Adds to the Turmoil
BluSmart’s internal troubles are also deepening, with a series of high-profile leadership exits. In recent weeks, several top executives have left the company, including CEO of BluSmart Fleet Anirudh Arun, Chief Technology Officer Rishabh Sood, and Chief Business Officer Tushar Garg, a former Uber India executive. Additionally, Vice President Priya Chakravarthy has also departed. Nandan Sharma, another senior executive, is expected to take over as CEO.
Financial Performance and Future Outlook
Since its inception in 2019, BluSmart has raised more than $180 million in a mix of equity and debt from investors including BP Ventures, Venture Catalysts, Green Frontier Capital, responAbility, and actress Deepika Padukone. In the financial year ending March 2023, BluSmart’s operating revenue rose to ₹71 crore, up significantly from ₹13.84 crore the previous year. The company also managed to reduce its losses to ₹14.89 crore from ₹35.37 crore in FY22.
Despite these gains, BluSmart has faced growing skepticism from investors due to ongoing financial stress and operational setbacks. While earlier talks of Uber acquiring BluSmart were denied, industry insiders say Uber remains interested in either acquiring the startup’s assets or deepening the partnership, contingent on BluSmart’s ability to stabilize its operations.
A Turning Point for BluSmart
Once a challenger to ride-hailing giants like Uber and Ola, BluSmart now finds itself scaling back ambitions and pivoting its business model in the face of rising competition and financial strain. With Uber and Rapido consolidating their positions in the market, BluSmart’s future hinges on a successful transition from platform operator to fleet partner—an uncertain but potentially life-saving move for the embattled EV startup.
