The GDP per capita in India is experiencing exponential growth. The increasing population in India with simultaneous growth in wealth are leading to a great increase in demand for modern traffic solutions, which include shared mobility along with others. In between 2006-2016, traffic demand across the country has doubled. So far, the rise in India’s population and financial power is constantly leading to an increase in the traffic demand.
As per a research by h&z, the passenger kilometer travelled between 2020 and 2030 is expected to grow 14 times. This transformation is likely to be heavily driven by the mega trends like electrification, shared mobility, followed by connectivity and autonomous driving as well.
Shared mobility has been one word that created a lot of headlines in the half a decade. Companies like Ola, Uber, Rapido etc have helped the growth in the sector in India in the last couple of years. According to the research, the shared mobility fleet in India is expected to grow to 4.7 million units to 2025 from 2.0 million units in 2019, at a CAGR of 9.7%.
Even though the segment has been hit hard by the Coronavirus pandemic, as people are preferring personal mobility over ride sharing, the research forecasts that shared mobility market size will grow 27.6% until 2024 and reach approximately 3.5 billion euro. In 2019, the shared mobility market size in India was 640,7 million euro. The research also claims that 17% of all the vehicles will be sold to fleet owners by 2025.
By 2040, 35% of the total distance travelled by people will be attributed to ride sharing services. This will reach 50% by the end of next decade (2050). This certainly makes India a very attractive market for the shared mobility operators.
According to the research, the ride hailing services like Uber, Ola, Rapido etc currently dominate the revenue share in this segment. The Southern region of the country accounts for the largest share of the ride sharing market in India.
Factors encouraging shared mobility growth
There are some key factors that give the shared mobility segment lucrative growth potential. Besides the cost factor increasing the number of vehicles, specially personal vehicles cause huge traffic problems in big cities.
Traffic jams in Bengaluru, Delhi, Kolkata and Mumbai cost around $22 billion every year, leading to a huge economic loss. In the US, every person loses 97 hours in every year due to traffic jams, while in India 243 hours per year are lost per person due to the same reason.
Apart from that, more than half of young people who are key drivers in the auto sales growth in India are questioning the need for a private car. In many cases, they prefer the ride sharing over owning a personal vehicle. The number of cars available per household in India is implying the present readiness for shared mobility. In the US, while the passenger:car ratio is 1.5:1, in India, the ratio is 3.2:1.
Challenges ahead of shared mobility growth
Despite the potential of India becoming an attractive shared mobility market, there are several challenges ahead as well. These include an outdated Motor Vehicles Act, lack of clear regulations, lack of data standards and guidelines, lack of adequate infrastructure, cheaper transportation modes, private vehicles are considered as status symbols.
The Motor Vehicles Act of 1988 is outdated and it doesn’t promote the shared mobility solutions over personal mobility. Lack of infrastructure is a major hindrance for the growth of shared mobility. Several regions across the country still rely on mass transit like train, bus etc. Also, the non-motorized transport mediums and lack of pick-up or drop-off points along with parking space crunches are other challenges.
A large number of people in India still see owning a private vehicle as a status symbol. There is a lack of awareness about the societal and environmental costs of a private vehicle, over shared mobility.
Bottomline
So far, India with its huge population and economic improvement, appears to be one lucrative market for shared mobility. The ride of shared mobility operators have propelled the growth in the segment and it would continue as well. However, there are challenges that need to be addressed with government intervention and societal awareness as well.
Also Read: Social media influencers and automotive ads: A 50-50 marriage proposition?
