Green digital startup idea – e-Rickshaws for Bengaluru?


The new metro-rail system in the hi-tech city of Bengaluru besieged by traffic problems is gaining popularity. The network, called ‘Namma Metro,’ with a total length of 42.3 kilometers has an average daily ridership of 315,000 passengers. The challenge for metro users, especially those living in the suburbs is the commute back to their homes from the nearest metro station that could be few kilometers away.

This is not a problem unique to Bengaluru. Commuters of other metros across major cities of the world have adapted unique solutions to this ‘last mile’ problem. Western cities like London, and New York have developed an extensive ‘feeder’ system of city-busses in the suburbs. Cities like Toronto and others in Europe have invested in an extensive train, tram and bus system to connect to the last-mile.

Given the constraints in investing in additional infrastructure for public transit, could Bangalore adopt a homegrown solution to this problem? Perhaps the Delhi model of eRickshaws will work.

The State and Central Governments in the National Capital Region around Delhi have supported schemes to boost private e-rickshaws, battery-operated vehicles, which have already replaced cycle-rickshaws in most suburbs, and are slowly inching out auto-rickshaws too.

e-Rickshaw Economics 101 :Lessons from the Delhi model

Let us briefly look at the Delhi model of a large network of e-Rickshaws. According to Wikipedia

“Electric rickshaws (also known as electric tuk-tuks or e-rickshaws) have been becoming more popular in some cities since 2008 as an alternative to auto rickshaws and pulled rickshaws because of their low fuel cost, and less human effort compared to pulled rickshaws. They are being widely accepted as an alternative to petrol/diesel/CNG auto rickshaws.”

A whole cottage industry has sprung up around the erickshaw transportation ecosystem with dealers, financiers, maintenance and electric charging networks operating a hub-and spoke supporting individual drivers and entrepreneurs.

In Delhi, the government under the leadership of Arvind Kejriwal and Aam Aadmi Party has defined a framework for operating e-rickshaws with government loan schemes, easing licensing an operating restrictions. Municipal Corporation of Delhi (MCD) aims at replacing all cycle rickshaws in the city with battery-operated rickshaws. After accounting for government subsidies rickshaws that retail for about rupees 80,000 to 1,00,000 are being offered to unemployed youth for Rs 30,000 to Rs 35,000.

The cost of a rickshaw may seem reasonable (even without subsidies) but there are hidden-costs like need to frequently replace batteries and need for reliable power supply at charging stations that need to be accounted for.

 

Some of the benefits of a network of eRickshaws are obvious:

  • Low/No pollution – The electric rickshaws operate on battery and do not emit smog and have very little noise pollution.
  • Social Benefit – generate employment and entrepreneurial opportunities for youth in neighborhoods helping the local economy.
  • Economical and easy to operate – the Delhi government has stepped in to ease licensing and permit requirements for e-rickshaws. A new scheme — Deen Dayal e-rickshaw scheme — will allow e-rickshaws to operate without any testing to ensure basic quality standards. Also, Traffic Police can no longer fine them. “No case can be registered against e-rickshaws and no challan can be issued as these battery-operated vehicles do not fall under the category of motor vehicles,’’ a Delhi traffic police officer said.
  • Reduce overall traffic and parking problems. Commuters taking a Namma metro need not worry about parking his bike or car at the station, minimizing traffic and congestion in major hubs. The easy availability of e-rickshaws in a neighborhood will also minimize the need for personal transportation – cars, bikes and scooters for short commutes.
  • Not just for Namma metro users – Taking the Delhi example, people in Mayur Vihar generally don’t take their bikes or scooters for a trip to the local market since they can depend on frequent e-rickshaws crisscrossing the neighborhoods. This has also helped the elderly, housewives and others in the community.
  • Opportunity to adopt and integrate other digital technologies to enable on-demand calling of eRickshaws, GPS based tracking etc.

One can argue that the timing for widespread introduction of eRickshaws is ripe. However, entrepreneurs and startups need to be prepared for opposition from those who may not want a change in the status quo.

  • Autorickshaw unions – Cities like Bangalore have strong, vocal unions supporting auto-rickshaws that are well entrenched. They are already being threatened by increasing adoption of on-demand ridesharing services like Ola, Meeru and Uber and are not likely to take kindly to e-rickshaws encroaching their turf.
  • Traffic concerns – Delhi too went through teething troubles in regulating erickshaws that were starting to cause traffic hazards, especially on main roads. A study by The Energy and Resources Institute (TERI) — done at the request of the Delhi government — had recommended that these battery-operated vehicles be kept off the ‘main’ roads. Defining what is a ‘main’ road is not as easy as it sounds.
  • Technical and operating challenges – Some drivers may invest in cheaper vehicles with poor quality batteries that may drain out faster. A network of support services including battery charging stations and repair shops need to be established while developing the infrastructure.
  • Other challenges – e-rickshaws are generally not recognized by the state as a mode of transport and operators find it hard to get bank-loans and financing. A Public Interest Litigation filed in the Delhi High Court also pointed out the absence of insurance options for the rickshaws since they are not recognized as ‘motor vehicles.’ This puts the passengers of e-rickshaws at risk as they cannot claim any insurance in case of an accident

 

Opportunity for entrepreneurs in Bangalore: e-Rickshaws

How would a network of e-Rickshaws work? In the Delhi model, eRickshaws are authorized by the government to operate in the suburbs. For instance, a network of eRickshaws could operate from hubs around metro stations like Banashankari, Srirampuram, Jalahalli, Mahalakshmi layout, etc. Starting from the stations, the e-Rickshaws might cover a radius of 2-3 kilometers into the suburbs, dropping and picking up passengers along the way, charging a nominal 10 rupee per passenger, per ride.

The time seems to be ripe for startups to leverage their technical and entrepreneurial skills to introduce eRikshaws in Bengaluru. As with any infrastructure challenge, entrepreneurs need to take a top-down and bottom-up approach here to address the different aspects of a ‘master plan’

  • Policy and regulation – Currently there is no policy in the state and city to address eRikshaws. The local governments need to be engaged and agree on a policy to ease the introduction of e-rickshaw. Else, initial operations may face issues with the local police and traffic authorities.
  • Sales, Financing, leasing and support of eRickshaws, batteries and spares
  • Design the logistics including a network of charging, service and support stations
  • Other hi-tech support ideas including managing database of databases, creation of ‘call based’ eRickshaw networks, GPS back tracking system, routing and planning systems etc

The opportunity for startups and the consumer need is clear, especially in a growing metro like Bengaluru. Entrepreneurs will have to design and implement a transportation ecosystem of dealers, financiers, maintenance and electric charging to support individual driver-operators.

We will continue to scan this space to feature entrepreneurs here.


Links and References

 


Compiled and Edited by: Mohan K  July 2017 – Reproduction with permission only |

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