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India – prime target for smart mobility

Mobility-as-a-Service (MaaS) refers to the concept of seamlessly integrating mobility services on a single platform. Indraneel Bardhan of EOS Intelligence considers the potential for MaaS in India, and how it can be used to move not just people, but also freight

A rapidly growing urban population (CAGR 2.35% between 2011 and 2031e), increasing motorisation rate (CAGR 12.7% between 2010 and 2025e), critical levels of traffic congestion, growing traffic fatality rates, inadequate mobility monitoring and deteriorating air quality – all of these make India a prime for smart mobility solutions.

Mobility-as-a-Service (MaaS) could be a game changer for India’s traffic and transportation woes by seamlessly integrating the first and last mile connectivity to supplement existing fragmented transportation systems. MaaS has the potential to help bridge the current gap between the increasing demand for mobility and the slow pace of infrastructure development. The rapid consumerisation of IT and technology and growing smartphone penetration should help boost the adoption of MaaS, as long as the country’s government stands by its pledge to make India ‘truly digital’.

This article takes a closer look at MaaS and the potential impact it might have on India’s transportation and travel – two areas that could be radically altered.

MaaS for transport

India’s current mix of freight transportation is heavily reliant on roads (more than 60% of freight) with underutilisation of other, potentially cheaper, modes such as rail and waterways. Lack of adequate and timely investment has been the key reason for the ineffective development of other modes of goods transportation.

In road transportation, there are several bottlenecks ranging from poor infrastructure to bureaucratic challenges (such as complex toll and tax systems) across states that result in higher lead times and transportation costs. The fact that India’s 29 states follow various non-uniform transportation rules and regulations, with multi-tier tax structures, has not helped the cause. There is also a pressing need for improvements in infrastructure as well as technology penetration to tackle prevailing inefficiencies.

Ro-Ro ferry routes - EOS Intelligence

The 2017 union budget provides a much needed boost to India’s logistics and transportation sector, by earmarking US$20bn towards modernisation of rail infrastructure and US$9bn for highways development. In an effort to reduce logistics costs and improve competitiveness, the government has also launched a multi-modal transport plan that includes setting up of 35 multi-modal logistics parks with a total investment of US$7.5bn. Some 15 of these logistics parks are expected to be ready in the next five years, while the remaining 20 will be constructed over the next ten years. In addition, the government will pursue the construction of 50 economic corridors to improve efficiency of freight movement. These projects expect to increase the average freight speed on highways from 20-25kph (12-15mph) to 50kph and reduce freight costs by 50%, which should help achieve more time-efficient management of the supply chain.

Apart from rail and road infrastructure, there is a renewed emphasis on national waterways as an integral part of India’s freight movement system. The approval of the National Waterways Bill in 2016 for the development of 111 river belts into national waterways to enhance freight movement and reduce transportation costs is a considerable step forward to make waterways a mainstream transportation option, and potentially integrate this mode with rail and road to create a seamless freight movement network.

With the government’s plan of developing multi-modal logistics parks and dedicated freight corridors, there are potential opportunities for industry stakeholders, including logistics start-ups, to move a step further and develop a solution that can bring together various players and transportation modes on a single service platform that allows freight to travel via the most efficient route possible across the country. With the way companies such as Uber or Lyft have transformed the concept of urban mobility, ‘uberisation’ of the transportation industry is the need of the hour and MaaS can play a truly critical role in this transformation.

Freight modal share in India - EOS Intelligence

Companies such as BlackBuck, ThePorter and LetsTransport are leveraging technology to bring together fleet operators, warehouses, transporters and truck drivers on a single platform to ensure timely deliveries, optimise fleet capacity and reduce transportation charges.

While there is some movement in MaaS development and adoption in the goods transportation space, it seems that still there are still no solutions available in the market that can provide end-to-end logistics solutions by integrating all modes of transportation on a single platform.

The need of the hour for the industry is to leverage the on-going government initiatives and start planning a new framework that can develop a MaaS offering by involving different transport operators as per the logistics needs of Indian businesses.

This could lay the foundations  for the development of a much needed platform that would offer the most needed functionalities – a platform that can allow GPS-based freight management helping companies with real-time tracking and information to make intelligent movement decisions; a platform which provides fleet operators with insights on market demand trends in real time, allowing them to optimise their resources and fleet capacity; a platform that enables integration of various transportation modes and operators ensuring goods travel seamlessly to reach their destination with last mile logistics connectivity.

MaaS, if effectively developed and adopted, has the potential to create a more balanced modal network that is cost and time-effective, and can also meet the transportation demands of the future.

MaaS for Travel

In recent years, there has been a fundamental shift in consumer perception of vehicle ownership, at least in urban India. App-based transportation solutions are transforming the way Indians travel in and around cities. This is evident from the growth and penetration rates companies such as Myles, Shuttl or Uber have witnessed in India. However, most of these businesses are still evolving and have a long way to go before becoming mainstream, or at least reaching populations beyond just the country’s urban masses.

Freight aggregators - EOS Intelligence

With a critical need for efficient mass mobility in India due to rapid urbanisation and an unmanageable or unsustainable number of vehicle on the roads, the need to enhance mass transport systems is more imminent than ever. This is pushing authorities to develop sustainable solutions, such as the Smart Cities Scheme or Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which lay heavy focus on improving urban mobility and public transport systems. To meet these objectives, the government has considerably invested in mass transportation schemes such as metro rail, bus rapid transit system (BRTS) and mass rapid transit (MRT), though with mixed results.

To enhance combined mobility services, projects are under way to construct ten intermodal stations across the country which can integrate all transportation modes such as rail, MRT, BRTS, auto rickshaw (tuk-tuk) and taxi under a single roof. Despite these initiatives and investments, public transportation is still perceived by many as uncomfortable, over-crowded and irregular, forcing them opt instead for private cars.

 

At an inter-city level, although improving, government-run transport services offer a poor level of service experience, with limited frequency, frequent delays and poor travel conditions. Take, for example, rail – it is a preferred choice in the developed world, yet it offers very limited route options for most passengers and is often over-crowded. Buses, on the other hand, though inefficient and surprisingly not always cost effective, end up being the preferred mode of travel for a large section of India’s population.

Impact of UberPool - EOS Intelligence

At the intra-city level, transportation systems currently lack integration. Public and private enterprises operate in complete isolation, hence failing to meet the customer’s end-to-end travel expectations. Metro, which is increasingly a preferred choice (cost, comfort and cleanliness being key reasons for that), comes with the downside of the limited last mile connectivity, again resulting in certain urban classes to prefer private vehicles instead. There is a serious need to develop and expand mass transportation systems in cities, increase frequency and reliability of services, enhance last mile connectivity and enable multi-modal integration.

With several travel-related problems within and across cities, there is a need for end-to-end mobility solutions that support Indians throughout their entire day-to-day and long-distance travel requirements. An urgent and immediate need is to address the last mile connectivity issue. Therefore, a major effort is required to improve feeder services to create a multi-modal transportation network that can fill existing gaps in the market.

It is vital for government authorities to look and learn from innovative business models adopted by different start-ups. For example, UberPOOL, in just over a year, has extended its car-pooling services to six cities in India, and now accounts for more than 20% of all Uber rides in India. Uber claims that through its car-pooling services in Delhi and Bengaluru alone, the company has saved over 7 million kilometres from being driven, which translates to 300,000 litres of fuel saved between January and June 2016. Delhi Metro and Ahmedabad BRTS are other examples of successful urban mass mobility projects in India. These projects are clearly indicative of consumer acceptance of mass mobility and point to a dire need for the provision of tailored mobility solutions as per commuter needs.

Multi-modal urban transportation - EOS Intelligence

Transportation authorities need to adopt an intelligent transport system that enables smart journey planning, ticketing, surveillance, real-time traffic management and passenger information. By harnessing data analytics, operators can study and understand commuters’ travel patterns and use them in designing mobility solutions. They can use the same data for effectively managing traffic and congestion during peak hours.

MaaS in perspective

Megatrends-Q2-2017-Uber-Go-Bengaluru-user

Transportation authorities need to adopt an intelligent transport system that enables smart journey planning, ticketing, surveillance, real-time traffic management and passenger information

While the opportunities for MaaS services are in abundance, there are various challenges that need to be managed effectively.

One of the largest hurdles for many private players is the current ambiguity of regulations and lack of government support. Government support for such service models is absolutely vital. Car-pooling service providers have run into problems with state authorities mainly over permits and competition with state-run transport services. The ambiguity around the legality of ride-sharing businesses has restricted access to funding, forcing many start-ups to shut down. Government authorities should develop a transparent regulatory framework that enables industry participants to grow.

From a consumer standpoint, concerns around safety and security are the major growth barriers that need to be carefully assessed and solved by industry stakeholders.

Solving the mobility challenge in India will require courageous and coordinated actions from private and public sector players alike. This can be only achieved by revamping current transportation systems, including a shift to collective mobility in daily commuting and travel practices. Intelligent technologies, access to funding, transparent and business-friendly policies as well as innovative business models are needed to create smart and sustainable mobility solutions. The authorities should appreciate and support innovation in the sector to create a win-win solution for citizens and industry stakeholders.

By leveraging innovative technologies such as MaaS, India can reduce congestion, improve road safety and curb pollution levels. The government, transport operators and service providers should all work together to help citizens and goods move around more effectively. The road is long and there are still many milestones left to be reached, but close collaboration between industry players is likely to lead to innovative MaaS offerings that can significantly enhance urban mobility in India.