Opinion | The Mobility Economy Can Unlock Massive Livelihood Opportunities For India
by Sreelakshmi R. and Aishwarya Raman
As hubs of opportunity, cities attract a vast migrant populace from rural areas; creating a high demand and high supply of low, semi-skilled jobs. The urban mobility sector caters to the city-dweller’s use of vehicles and transportation modes for daily travel. Public and intermediate public transport such as two-wheelers, auto-rickshaws, taxis and cabs, mini-buses and buses, etc can help drive opportunities.
On the other hand, the ubiquity of smartphones has allowed app-aggregator solutions to kickstart the digitised, shared mobility phenomenon. With a vision to disrupt mainstream transport, they are making mobility more demand-responsive and customer-centric. This has scratched the surface of a budding market and has tapped potential to digitise substantive commuter trips.
For now though, India is far behind China where 5% of commuter trips are digitised. China even boasts 110 million cab drivers, etc. — many still migrants, piecing together livelihoods in a booming digital economy. These opportunities account for about 15% of the entire labour force — compared to about 10% in the US. Asia dominates the ‘rideshare market’ globally, with India being the third largest market (in ridership terms, with 5.08 crore people projected to use ride-share apps by 2021). Industry experts estimate that the Indian rideshare market may grow at a Compound Annual Growth Rate of 13.7% by 2022 to reach $14.3 billion: all thanks to rising disposable incomes in Tier-1 and Tier-2 cities.
Changing consumption patterns drive the digitised, shared mobility phenomenon. There is a marked increase in professional drivers in the country (commercial licenses grew by 58% in 2010–12, a period marked by the advent of app-aggregators) while the market for on-demand rides has gone up, as demonstrated by the visible growth of ride-sharing platforms. Overall, 15 lakh livelihood opportunities have been created in the digitised, shared mobility industry between 2010 and 2018. National and subnational governments in India need to recognise that good livelihood opportunities lie in the intersection of increased demand for urban mobility and asset-sharing. Mobility platforms acknowledge this and cater to the market supply of assets and labour, by using technological tools. Job roles are being augmented to suit the needs of an on-demand economy. Indeed, from a projected 60 crore-strong workforce by 2022, 35% are youth, that tend to be mobile. Thus, exploiting India’s demographic dividend in this regard is indispensable going forward.
The role of technology is critical in on-demand services and jobs as well. Several apps offer vernacular options allowing a migrant to navigate cities seamlessly. This eliminates the need of knowing English, or even the city. Further, combining the increased access to institutional credit for vehicle ownership and the demand for filling of gaps left by public transport, there is also scope to create millions of micro-entrepreneurs. Access to this work and assets is facilitated by the technology companies seeking supply, such as the interventions of mobility platforms in assisting access to formal banking services for potential driver-partners. Thus it not only creates livelihood opportunities, but changes each asset-owning partner into an entrepreneur in their right.
States can unlock the potential of the mobility economy in many ways. Today, several entry barriers adversely affect shared mobility services as well as the associated livelihoods ecosystem. Consider entry restrictions on newly skilled drivers equipped with only private licenses, not always allowed to drive taxis or cabs. Only 14% male and 1% female qualified drivers in the country hold requisite licenses to drive commercial vehicles. A distinction made between private and commercial driving licenses mandates a one-year waiting period for holders of private licenses before they can start driving commercially. Although this was disregarded by the Supreme Court recently and was followed by a notification by the Ministry of Road Transport and Highways, the restriction continues in some states. By removing this entry barrier, states can make mobility equitable and accessible to all while also creating massive livelihood opportunities for their citizens.
Secondly, while the demand for urban commute exists, enough government-recognised driving-based livelihood opportunities are not available to prospective young workers. For instance, in the first five months of FY2018–19 alone, almost 63,000 two-wheelers were sold every single day in India. This metric is not one of vehicular growth or personal preferences alone, but as a new urban mobility livelihood opportunity for Indians. Bikes are available in abundance and so are delivery and driving “jobs”. The convenience and cost-effectiveness of bike taxis in ensuring first and last mile connectivity is significant. This is along with the realisation of asset-sharing and the opportunity to monetise to willing bike riders, enhancing resource utilisation overall. Similarly, restrictions on types and numbers of taxis or cabs that can operate in a city or across a state must be removed to permit lakhs of young men and women to take up driving as a substantial livelihood opportunity.
Driving taxis and cabs, auto-rickshaws and bike-taxis is an opportunity for the semi or low-skilled workforce of the country that has hitherto been neglected. A recent report from BetterPlace, which trains and places workers across sectors, shows that the e-commerce industry demands the most jobs currently, attributing to the fact that in the next 6 months as many as 10 lakh opportunities of the 19 lakh jobs that would be created in this industry will be those of driving and delivery. It also traced migration patterns, and determined that most migrants from states like Uttar Pradesh prefer participating in the shared mobility economy in cities like Bengaluru, Gurgaon and Delhi. Considering the mobile nature of youth, exploiting India’s demographic dividend by leveraging digitised, shared mobility is indispensable going forward.
As India is driven to be a leader in shared mobility by 2030, the future of mobility and work will only be more intertwined: a dream that can be secured by technological, regulatory and industrial advancements.
Originally published at http://www.businessworld.in on October 19, 2019.