With shared mobility, why own a car?

Recently, we faced the difficult decision of selling our 2005 Chevrolet Optra. It had diligently served us for last 14 years and had many memories linked to it. However, the policy of phasing out vehicles more than 15 years old helped us get over this emotional decision, and we had the satisfaction of being law-abiding and environmentally-sensitive citizens.

Who knew that we would have to face an even more difficult question — whether or not to own another vehicle. Fifteen years ago, a personal vehicle was an absolute necessity for convenient living, apart from being a status symbol.

This issue is not only intriguing us but also important to deliberate upon for the future of transport. According to Deloitte’s 2019 Global Automotive Consumer Study , more than half of country’s millennials are already questioning the need for purchasing and owning a car. The consultancy says the concept of shared mobility is gaining ground in a country where about 600 million people, close to half of its population, are under the age of 25. Today, not having a car is an option worth exercising largely due to available alternatives like Uber and Ola, public transport, shared cab services, etc.

A simple calculation indicates that the per km cost of personal vehicle is 40-50 per cent more than the fare charged by cab service providers. This is primarily due to the high proportion of time the personal vehicle remains idle.

Increasing acceptance

The NITI Aayog in its report Moving Forward Together, 2018 has defined shared mobility as “any mode of transportation that is shared by users on an as-needed basis, from bikes to 4-wheelers to mass transit . ” So all kinds of public transport and taxi services — normal as well as online platform-based aggregators — come under the ambit of shared mobility .

Shared mobility offers several benefits in terms of effective and efficient transport systems, optimal asset utilisation and improved connectivity. In contrast with private vehicles which remain idle most of the time, shared vehicles are better utilised with more passengers per vehicle, and thus lead to reduction in total vehicle kilometre travelled, savings in fuel consumption, reduced emissions and lower cost of transportation. Shared mobility, as a considered policy, therefore, needs to be encouraged by the government.

Shared mobility is gaining traction in India thanks to the increasing availability of these services not only in major cities, but also in Tier-II cities. According to a Morgan Stanley report (2018), India offers all the right ingredients to be one of the largest shared-mobility markets in the world, as it has large population clusters, a young demographic that is well-connected to the Internet and rising real incomes. By 2030, Morgan Stanley expects shared miles to reach 35 per cent of all miles travelled in India and this will further increase to 50 per cent by 2040.

Vehicle ownership in India is just 20 per 1,000 people as against 600 in the European Union, 800 in the US, 520 in the UK and 85 in China. India is among the youngest countries with, an average age of 27.9 against 43 in the EU, 38 in the US, 40.5 in the UK and 37.4 in China. India is known for a high penetration of data-supported technologies. With 451 million monthly active Internet users at the end of financial year 2019, India is now second only to China in terms of Internet users, according to a report by Internet and Mobile Association of India (IAMAI).

The number of smartphone users in India is expected to double to 859 million by 2022 from 468 million users in 2017 — growing at a compound annual growth rate (CAGR) of 12.9 per cent, according to an ASSOCHAM-PwC joint study. This preference for shared mobility by the younger generation has already started impacting the demand for vehicles. An SBI Capital Securities report (2019) has revealed that the popularity of cab aggregators like Ola and Uber caused the passenger vehicle demand to collapse by one-third over the last two years.

Future of mobility

This has aggravated the slowdown faced by the automobile sector in recent months, and has forced the auto industry to align itself with the era of shared mobility.

The recent campaign of Hyundai, ‘Once upon a time Hyundai was a car company’, truly reflects the future of mobility. The campaign aims to consolidate the future of mobility with shared, connected and clean technologies. Hyundai, through its campaign, has highlighted its transformation from an automobile brand to a smart mobility solutions company, which is based on three pillars — ‘shared mobility’, ‘connected mobility’ and ‘clean mobility’.

These trends hold important lessons for the future evolution of policy. The mobility needs in a city are determined by the way it is being built and developed. Development, urban design and public spaces, building and zoning regulations, parking requirements, and other land use policies shall incentivise compact, accessible, liveable, and sustainable cities which are best suited for shared mobility.

Different modes of shared mobility should complement each other to provide a comprehensive transportation system.

Integrating different modes can lead to seamless multi-modal transit where users have a choice to take their preferred modes in shared mobility regime.

Data crucial

The availability of data is a key enabler in the shift to shared mobility and multi-modal integration. For example, exchange of transit data gathered by transport service providers (metro, bus, platform-based taxi services, navigational tools, etc) can present a comprehensive picture of the transportation situation in the city and help the user to decide optimum transport service.

Depending upon the congestion on the road from origin to destination, the user may plan to travel by the fastest available mode, like metro trains. A clear policy for collecting, standardising, aggregating, and sharing transit data can increase the interoperability of data.

The government may also need to adopt some ‘push’ measures to force people to adopt shared mobility such as high vehicle registration fee, increasing parking charges, and an environmental cess on fossil fuel, among others. Shared mobility is the future of urban transportation. The earlier we plan enabling infrastructure, the better.

Surbhi is with the Finance Ministry, and Amit is with the Ministry of Railways.Views are personal

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