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Is Shared Mobility Doing a Comeback?
As restrictions and fear of the virus ebb, the business of shared taxis, auto-rickshaws and public transportation show signs of a slow recovery
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Before the coronavirus wreaked havoc on the world, the popular narrative of those in the shared-mobility space used to be, "the Millennials don't want to buy cars and choose the Ola and Uber for their daily transportation needs, instead". That notion quickly disappeared as India went into lockdown after March 25, 2020. In many recent surveys, respondents have shown a strong inclination to use private vehicles rather than public transport. The main trigger spurring this trend, of course, is the fear of getting exposed to the virus. Says Aravind Sanka, Co-founder Rapido, "When the pandemic started ten months ago, shared commute along with all modes of commute came to a standstill. However, people had to step out of the safety of their homes eventually to get back to work - vaccine, or no vaccine - with the support of masks and sanitisers."
He points out that in India, 80 per cent of people rely on public transportation and shared commutes because of their affordability, connectivity or availability. "Suddenly, these commuters had no public transport like buses, trains, and metros, to depend on as they were hesitant about their safety and overcrowding whereas cabs were expensive," he goes on to say, adding, "This became an opportunity in adversity for us. We are currently witnessing a 60 per cent recovery of the pre-Covid business overall and 100 per cent recovery in some cities."
In a BCG survey, between 40 per cent and 60 per cent of respondents in the United States, China and Western Europe said they would be using less public transport and rely more on walking or driving their own car. A Deloitte survey indicates that there is a clear shift away from public transport, taxis and ridehailing schemes towards individual modes of transport. A third of its respondents believed they would walk more or make greater use of bicycles or electric scooters.
A McKinsey & Company survey indicates that 81 per cent of survey respondents consider private vehicles 'safe'. It is, therefore, no secret that ride-hailing companies in multiple geographies have experienced 60 per cent to 70 per cent decline in passengers during the Covid-19 crisis. But brands like Ola and Uber are addressing the safety issue on a war-footing. For example, Uber has put up safety screens in over 87,000 three-wheelers across 20 cities, and in 43,000 cars across seven cities.
SOME GREEN SHOOTS
In a country like India, with crowded metros and towns, the concept of shared mobility offers effective and resourceful transport systems, optimal asset utilisation and enhanced connectivity, say experts. Unlike private vehicles, which remain idle most of the time, shared vehicles carry more passengers per vehicle, thus reducing overall vehicle kilometres, saving fuel consumption, reducing emissions and lowering transportation costs.
As the situation eases and more and more places open up, ride-hailing platforms begin to witness a recovery. But people are still preferring cabs and "autos" (or three-wheeler scooters) over public transport because of safety concerns. "We continue to see a surge in demand, with a positive growth trend over the past few weeks in cities that we operate in. Demand is recovering faster in metro cities like Bengaluru, Mumbai, Delhi and Hyderabad, with the opening up of offices and increased leisure travel. We continue to strictly adhere to our hygiene and safety protocols with industry-leading initiatives, thereby enabling every ride to be safe for both our customers and driver partners," says an Ola spokesperson. The new normal has brought about a paradigm shift in some forms of transport, however. Ride hailing platforms, for instance, are seeing growth in rentals and outstation categories. It is worth mentioning that Cab aggregators are still not offering pool services to maintain social distancing norms. "Our mobility business is showing strong signs of recovery after resuming operations and expanding to 89 Indian cities. The Delhi-NCR has emerged as one of the top ten global markets for Uber, based on the number of trips taken in the month of September, with more than a million weekly rides," an Uber India spokesperson tells BW Businessworld.
One of the key drivers of the recovery in Uber's business are low-cost products like auto-rickshaws. "We also became the first ride-sharing company in India to introduce auto rentals in six Indian cities, namely the Delhi- NCR, Mumbai, Chennai, Hyderabad, Bangalore and Pune," says the Uber Spokesperson.
Apart from cabs, bike taxi providers like Rapido have seen demand return to 60 per cent of pre-Covid levels. Sanka, Co-Founder Rapido, is positive about the revival. "We expect the adoption of bike taxi travelling to increase in tier-2 and tier -3 cities, as a solution to the unavailability of shared autos or last-mile connectivity gaps and among blue-collar workers travelling daily to work. We also feel people using bike taxis for short hauls, work, ordering groceries, etc. will continue to drive the demand for our service."
Vogo, a scooter and bike rental startup, has introduced two new services, keeping in mind the requirements of consumers in the new normal - offering short-term rentals for a couple of hours and long-term rentals which go up to two months "The trend is moving towards personal mobility and other rental platform: There has been a fundamental shift in consumer needs post Covid. Safety is now a priority and people are more comfortable driving themselves rather than public transport or driver dependent commute. It is also evident that they are now looking to rent for longer durations and get all the benefits of personal ownership without actually buying it," says Anand Ayyadurai, Co-founder and CEO, VOGO.
The epidemic has indeed added additional dynamics to the mobility sector. Operators in the business of providing shared mobility need to rapidly adapt their business models to changing circumstances and user demands. However, this ability to adapt quickly is only possible with flexible technology, allowing operators to expand the fleet, develop new business models, and integrate new partners.