Though the mobility sector took a blow from Covid, ride-hailing and rental services are picking up pace again
The dynamics of vehicle ownership in India have been constantly evolving since the nascent stages of shared mobility, almost a decade ago. It has been a journey of rediscovery and unlearning for the Original Equipment Managers (OEMs), mobility players, and city planners as the commuters grappled with the truth that one doesn't have to own a bike or car to go from point A to point B. With cities like Delhi, Mumbai, Bangalore, and Kolkata losing 1.47 lakh crore rupees annually to congestion costs and vehicular emissions going up by the minute, it is vital that we seek more convenient and affordable commute solutions.
Ours has been a culture that has always equated ownership with success. But with changing times, the buying trends are also transforming. Today, India is the land of startups and thriving digital infrastructure, uniquely placed at the cusp of a socio-economic revolution. Though the mobility sector took a blow from Covid-19, ride-hailing and rental services are picking up pace again. P&S Intelligence has predicted that the Indian shared mobility market is expected to grow by 56 per cent in the next few years, with its revenue reaching a whopping 3,952.8 million dollars by 2025.
Given the current pandemic scenario and the altered consumer perceptions, here are a few factors that I believe will tilt the scale in favour of two-wheeler rentals as opposed to ownership.
The Shift from Ownership to Usership
To millennials, the concept of winning in life is not tied to assets anymore. They invest in experiences rather than assets. Given their fast-moving lifestyle and the rising cost of living, more and more youngsters are choosing to rent houses, furniture, and vehicles. As many of them tend to shift cities for job changes, not being tied down by assets is a convenient choice. The pandemic has played a part in this “rent” revolution. As the frequency of people going out has reduced, renting a vehicle is a smarter choice than investing in a personal vehicle, be it for an urgent errand, the weekly grocery run, sporadic office commutes, or occasional hangout plans.
The Thriving E-commerce Culture
We live in an era of convenience where everything gets delivered to our doorstep. Along with the growth of online infrastructure in India, the fleet of delivery personnel has also increased exponentially. Food and e-commerce delivery workers were our lifeline during the lockdown, and theirs were two-wheeler rentals. The majority of these workers choose to rent scooters or bikes as they do not want to be tied up with maintenance costs or worry about vehicle wear and tear.
The Rise of Short-term Rental Subscriptions
Many vehicle rental providers are adding flexible subscription plans to their offerings, lending a temporary sense of ownership to riders. The customers can take their pick from daily, weekly, or monthly rental plans to make their rides as convenient and contactless as possible. With lack of contact being a top priority at the moment, the subscription model is swiftly gaining traction in the shared mobility market. It offers all the advantages of owning a two-wheeler, minus the hassles of asset depreciation, vehicle insurance, or the calculation of resale value.
The Emergence Of Mobility As A Service
The future of mobility will be smart, predictive, and connected. MaaS can be defined as a centralised system or platform where all transportation modes will be streamlined into a single unit. By developing and deploying a mobile app, you will be able to book a scooter, scan your route, complete the ride, pay for it, and leave a review, all with a single tap. MaaS coupled with the rent-over-buy movement will accelerate last-mile connectivity. In a few years, we will be looking at connected micromobility running the show. It would make an impact, not just on the individual rider but also on the corporates that would hire two-wheelers to operate within their campuses and around metro stations.
The Growing Concern About Sustainability
With every Internal combustion engine (ICE) vehicle purchase, the tailpipe emissions will keep going up. While it is evident that going electric is the most straightforward solution to reduce our carbon footprint, a 100 per cent transition would take at least a decade. Until then, shared mobility is a viable option when travelling short distances, as it can reduce tailpipe-based GHG emissions and other harmful pollutants like nitrogen oxide and sulfur dioxide.
The mobility choices we make today as individuals and as a country are crucial, be it socially, economically, or medically. With effective planning and awareness, widespread adoption of shared mobility, and the optimised utilisation of existing assets, we could save 1.5 gigatonnes of CO23 and cut the annual mobility demand by nearly 1,800 billion km in 2035. Since we intend to share the Earth a while longer, let’s make up our minds to share mobility too.
The author is Co-founder and CEO, Vogo Automotive Pvt. Ltd.
DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.