The global attention to transportation has risen over the years as Goal 11 of the SDGs (UN Sustainable Development Goals) emphasizes making cities and human settlements inclusive, safe, resilient, and sustainable. Sustainable transportation and mobility have been identified as quintessential to sustainable development.
Growing transport demand coupled with rapid urbanisation, and a shift towards personal mobility has started to burden urban infrastructure, leading to increasing traffic congestion in cities and towns. Indian cities are some of the most severely congested in the world. The four most congested Indian cities – Bengaluru, Pune, New Delhi, and Mumbai – have average rush hour speeds as low as 20-25 km per hour, compared to global average of 35 to 40 km per hour.
Increasing congestion also gives rise to several economic and environmental concerns. High congestion results in longer driving time resulting in lower economic efficiency. Moreover, with increase in personal mobility, adoption of public transportation is continuously declining, with its share in urban trips falling from 60-80% in 1994 to 17-20% in 2020.
A strategic push towards public and shared mobility is critical to combat India’s increasing traffic congestion. While the stagnation (and fall in some cities) in bus ridership can be attributed to largely stagnant fleet sizes and poorly maintained buses, the underutilisation of metros can be largely attributed to poor first and last-mile connectivity, which significantly reduces the networks’ capability to provide door-to-door mobility. The solution to drive metro utilization must be affordable, available at the commuter’s doorstep, reliable, fast, and safe to ensure mass adoption.
Bike-taxis provide an affordable form of transportation for metro commuters’ daily needs. Fares charged by bike-taxi aggregators (INR 8-10/km) are far lower than that of a regular taxi (INR 22-25/km) and regular auto-rickshaw (INR 15-18/km). These fares are comparable to that of a shared auto-rickshaw (INR 7-8/km), however without the associated challenges of overcapacity and fixed operational route. This stems from the lower operating expenses to run a two-wheeler thant he alternatives. Despite opposition and bans in various states across the country, bike-taxi demand has been steadily on the rise since 2016. It is estimated that aggregators in the market have collectively completed approximately 280 million rides in 2022.
The bike-taxi industry is at a critical juncture where the future of the industry hangs in a balance. Despite recognition of motorcycles as valid ‘transport vehicle’ from the central government since 2004, absence of clear state-wise regulations has resulted in bans in some states and strong opposition from auto-rickshaws and cabs in others.
Key tailwinds for the bike-taxi industry include:
- Affordability: Low operational cost of INR 8-10/km makes bike-taxis highly affordable for a commuter
- Faster commuting option: The smaller form factor of two-wheelers makes them easily maneuverable resulting in shorter travel times
- Support from Central level policy makers: Central government allowed motorcycles to be used as ‘transport vehicle’ in 2004 by amending the Motor Vehicles Act, 1988
- Increasing partnership with public transportation: Lucknow and Hyderabad Metro have tied up with a leading bike-taxi player for convenient last-mile connectivity
Headwinds impacting growth of the industry include:
- Lack of clear regulations: Despite favourable central government policy, state regulations are still playing catch up
- Onerous conversion process: Lengthy/unclear conversion process from white to yellow number plates across states
- Resistance from auto-rickshaw and taxi-unions: Resistance from auto-rickshaw and taxi-unions from various cities due to the fear of loss of livelihood
- Perceived lack of safety: General perception of low safety associated with two-wheelers
Countries such as Bangladesh, Brazil, Thailand, Kenya and many more have helped the industry thrive through regulation, favorable tax policies and providing affordable financing solutions thereby allowing their population access to a cost effective and convenient mobility option which encourages use of public transport by solving last mile connectivity issues. It is time India wakes up to the opportunity and follows a fair regulatory approach for the industry to thrive and grow.
