Bike Sharing - solution for First and last mile connectivity woes

by Anand, Karthicknathan and Aditya 17 Jun 2019


L-R: Karthicknathan S, Anand Sethuraman and Aditya Chandrashekar

The concept of the shared mobility started in the form of carpooling with the owner trying to monetise the extra space. This concept expanded greatly when private businesses owning vehicle fleets started digitally connecting drivers and customers thereby creating value for all the players by improving asset utilisation. Ride hailing and ride sharing were concepts that bloomed out of this trend. Vehicle sharing services like ZipCar and Car2go also sprung up to enable short-term rentals while also reducing the liability for users related to vehicle maintenance, and insurance.

It is quite common for private transport to be the norm across North America. It also holds the majority in cities where public transport routes or services are not adequate for the customers. In such cases, the ride-sharing and ride-hailing players reign supreme. In spite of these players bleeding financially to stay competitive, they continue the business model without even making a profit due to the high adoption rate.

On the contrary, most cities in Europe with excellent public transport facilities seem to have little room for the Ubers, Lyfts and the Olas of the world. With dedicated public transport lanes, and mobile apps enabling smooth multi-modal transport across the city, customers do not look for ride-sharing and ride- hailing providers in these cities for travel greater than 5 kilometers.

Yet, there still exists a pain point for the customers who use public transport across the world. For distances under 5 kilometers during workdays, they are forced to buy a vehicle (mostly two wheelers) and park it at the bus or train station through the day. There is an overhead of parking charge, fuel charge and vehicle maintenance just for this daily travel to the nearest public transport station. It is next to impossible to monetise the idle time of about nine hours for such vehicles (especially two wheelers) even by the Car2Gos and ZipCars of this world.

The solution to these first and last mile connectivity issues come in the form of electric powered cycles, kick scooters and moped scooters. Numerous innovations within this segment in terms of dockless and docked bikes are providing solutions for every type of customer looking for instant connectivity to move from location A to B. Unlike North America and Europe, the concept of dockless bikes has not spread widely in Asia. We still have players like Yulu, Mobycy etc. attempting the dockless bike sharing offering in India.

Docked bikes have not taken off majorly in India in spite of being available at major metro stations and bus stations primarily because they are managed by small-time private players (FreMo, PEDL, etc.) who are not able to ensure a 3600 transport solution. With the evolution of multiple unified payment services in India, paying for such private mobility options from a digital wallet such as Google Pay or PayTM is certainly not the problem. In fact most Indian customers are used to multiple mode switches when travelling from A to B, but the key point is that they do not want to buy tickets/plans separately for their bike and suburban trains / metros / buses.

Even the bike sharing initiatives from the Governments under Smart City programmes, in cities such as Bhopal (Chartered Bikes) and Mysore (Trin Trin) have not hit the desired high rates of adoption due to the lack of a single multimodal transport subscription package. While National Common Mobility Card (NCMC) has been mooted as a possible solution, it is still a payment solution and not a multi-modal subscription solution.

It is in this precise context where the City Transportation departments or the Olas and Ubers can stake claim. City Transportation authorities can bring in transport cards issued by the city that cover all modes of transport in partnership with the private promoters. Integrating all the private providers under a single subscription package will benefit all the players as they can enjoy economies of scale. They will also be able to drive customer acquisition easily in such an integration mobility solution. There is also the possibility of allowing the customer to buy 1 QR code enabled ticket between A to B involving multiple mode switches (eBike - Suburban Train - eBike) to get from A to B rather than buy separate tickets for all the three modes from their digital wallets.

Similarly, the ride-sharing players such as Ola and Uber, can propose a 3600 transport solution between locations A & B that combines cars and bikes based on the traffic data. In fact there is already movement in this regard from them as they have started making the right investments and acquisitions. Uber acquired US based Jump last year &invested in Lime bikes as well while Lyft acquired Motivate, the largest bike-share company in the US. In China, Didi Chuxing, the world’s largest ride-sharing service having displaced Uber from the China market, is investing in Ofo. Closer home we had Ola, introducing a bicycle sharing system within few college campuses under the name of Ola Pedal late in 2017.

Even in busy cities like New York, London, Bangalore and Mumbai, which have well-connected public transport and ample ride hailing players, there is a need for slim dockless e-bikes as they will be able to help the executives get to meetings on time by beating the traffic. This will also be at a lower overall cost causing little impact to the environment as these cities have already introduced the concept of ‘Congestion charge’ for four-wheelers. As a result, a ride-hailing app can look at offering a customer, a car + dockless bike ride to get from A to B in 30 minutes at a lower cost and a car ride alone to get to the same location in 45 minutes at a higher cost.

For all the advantages of bikes, there are still unknowns in terms of safety, vehicle worthiness and insurance. The onus is on transportation authorities to devise regulations in terms of top speed to govern the multiple versions of these bikes, bike certification and the mileage limits for maintenance service. The regulations should ideally state if helmets are needed for riding the bike, if the helmets need to be owned by the driver or provided by the company and specify the part of the road (bike lanes, pedestrian walkways) where the bikes can be allowed. Insurance companies also need to setup specific plans for the driver and the company as well.

The advantages in terms of adoption rate and environment friendliness overwhelmingly favour the bikes over cars. Once these vital safety and regulatory needs are addressed, there is no stopping the bikes from becoming the focal point of any shared mobility solution.

The writers are all Automotive Domain Consultants.


 

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