The Rationale Behind Ride-Sharing: A Smart Way Out Of Urban Travel Woes

  • Can cab pooling services with their easy one-touch smartphone access change the way we travel in urban India?Besides giving a thought to the environment and fuel consumption, it definitely appears to be more convenient than looking for keys, finding directions and a parking space for the personal car.

Cities have always attracted people from its surrounding rural areas with a promise of better social, economic and cultural life. Indian cities are not an exception. Between 2001 and 2011 censuses, India’s urbanisation rose from 27.8 per cent to 31.1 per cent and is expected to increase to 60 per cent in the next 30 years, according to NITI Aayog’s former vice chairman Arvind Panagariya. Such a rapid urban expansion has naturally created an increasingly mounting need for basic services such as housing and transport.

In the case of transport, there is currently a huge gap between demand and supply of infrastructure facilities. While road network has grown only at a snail’s pace, the motor vehicle population in India has increased 100 times from 1951 to 2004. During the same period, the road network has expanded only by eight times. According to the data released by the Ministry of Road Transport and Highways, the compound annual growth rate (CAGR) of the total registered motor vehicles in India during the period 2001 to 2011 was 9.9 per cent vis-a-vis the CAGR of 3.4 per cent in total road length. Such an inadequacy of road network combined with poor quality public transport has given rise to a series of problems such as congestion and longer travel time. The average speed of a car in urban India is only 22 kilometres (km) per hour, thanks to road congestion and quality.

A rapid rise in the number of private cars especially in cities has added to the problem by increasing pollution levels and fuel consumption. A lack of adequate transportation in Indian cities not only poses a major challenge to realising the growth potential of the economy but also has adverse impact on the health and well-being of the people. While sprucing up road infrastructure and public transportation definitely have some of the answers to the problem, information technology and high smartphone penetration in India have opened up new possibilities for transport planning in large cities. Cab sharing is one such avenue based on the concept of collaborative consumption. Collaborative consumption is based on an economic model in which people swap, barter, trade, rent or share resources with each other, and can cover a number of areas such as space sharing or in this case, ride sharing.

In an interview to Business World in 2017, Amit Jain, country head of Uber India said: “It is important for the citizens to understand the rationale behind ride-sharing. The issue of traffic congestion and pollution is real – it’s a waste of resources, drain on productivity and making our cities environmentally unliveable. Over half of the world’s 20 most-polluted cities are in India. We have added more than double the number of cars in the last 16 years than we did in the first five decades since Independence.”

Even though the ownership of cars, especially in urban areas, have been constantly rising and reflects the improved financial status of India’s urban population, privately-owned cars remain an under-utilised resource. According to the Ministry of Road Transport and Highways, the average occupancy of a car is just about 28 per cent. This means while a car can carry four people, it only carries 1.15 persons. Globally too private cars are not utilised for over 90 per cent of the time.

Thus, cab sharing can potentially kill two (or multiple) birds with the same arrow by reducing congestion, improving environment as well as increasing the utility of the vehicle as resource. A number of independent studies reveal the benefits of car-pooling. Research by the University of California, Berkeley reveals that each shared car helps in removing nine to 13 vehicles from the road. The International Transport Forum conducted a modelling study for Lisbon and found that when cars on the road were converted to shared assets, congestion reduced by 37 per cent and parking spaces freed up by 90 per cent.

The model for allowing private cars to operate for a cab aggregator for some hours already exists in some countries like Australia and Singapore, but is still not functional in India due to regulatory issues. For example, in the US, much of Uber’s business comes from the “peer to peer” model where any person who owns a car can become a driver for Uber. Private ride sharing can become a long-term solution for urban commuters especially given the fact that percentage of commercial vehicles is very less in India. Ride sharing as a concept however is gaining immense popularity in Indian cities and both the major players in the market (Uber and Ola) are continuously pushing to expand in this area.

Uber, which operates its UberPOOL cab sharing service in six major Indian cities (Mumbai, Delhi, Bengaluru, Pune, Hyderabad and Kolkata) claims that since the launch of the service in 2016, 3.44 million litres of fuel, 73.38 million km of travel, and 8.12 million kilograms (kg) of carbon dioxide emissions have been saved. In Delhi National Capital Region (NCR region), known for its substandard air quality and vehicular pollution, UberPOOL claims to have contributed to cutting around 1.7 million km travel, which equals a saving of 84,000 litres of fuel and a reduction of over 198,000 km in CO2 emissions.

Ola, which provides cab sharing services as well, had launched its #DoYourShare campaign in August 2016 across Delhi, Mumbai and Bengaluru along with World Resources Institute (WRI). The company’s target was to reduce CO2 emission by 1,200 tonnes across the three cities by 15 August 2016. Its last (10 August) social media post on the target says Bengaluru has saved 255 tonnes, Mumbai 247 and Delhi 246 tonnes. In order to raise awareness about the benefits of cab sharing, the company had also put up billboards across the three cities to display real-time data on carbon emission saving by commuters using Ola Share services.

Regarding the campaign and the larger role of cab sharing in conserving environment, Vivek P Adhia, head business engagement, WRI India, said: “Initiatives promoting sustainable transportation, such as Ola’s ride-sharing offering have the potential to significantly reduce the carbon footprint on the environment. We believe the proliferation of such initiatives would help support ambitious climate action at the ground level and play a key role in accelerating progress towards India’s national commitments on 33 to 35 per cent intensity reductions made at Paris COP21 last year (2015).”

So, can cab pooling services with their easy one-touch smartphone access change the way we travel in urban India? It definitely appears to be a more convenient way than looking for keys, finding directions and a parking space for one’s personal car.

This article is part of our special series on urban mobility.