Pvt cars for pooling: Policy hurdles need to be cleared first

The genesis of the Niti Aayog studying the possibility of allowing private cars to operate as carpools comes from the rising problem of traffic and congestion in urban centres of the country. In the national capital alone, Delhi Police has identified 55 areas prone to congestion or traffic jam.

Written by Pranav Mukul | New Delhi | Published:July 8, 2017 3:06 am
Niti Ayog, Niti Ayog pooling of pvt cars, traffic and congestion, Indian express, india news Policies need to be revised to allow driver-owned fleets of transportation network companies and other private service providers to operate with stage carriage permits.

Pooling of private cars in India may have been operated on a trial basis earlier by some of the ride-sharing companies, but in a regulatory blind-spot. The Centre’s think-tank Niti Aayog has started work on resolving this by conducting a study through which it will aim to suggest a regulatory framework that would allow cab-aggregators to use private vehicles as shared taxis. While this could help in arresting the growing traffic and congestion problems, government officials and experts have highlighted a number of policy-related hurdles that need to be crossed first.

The genesis of the Niti Aayog studying the possibility of allowing private cars to operate as carpools comes from the rising problem of traffic and congestion in urban centres of the country. In the national capital alone, Delhi Police has identified 55 areas prone to congestion or traffic jam. Furthermore, as per data from the Ministry of Road Transport and Highways, 5,01,423 road accidents happened across the country in 2015, higher from 4,89,400 in 2014 and 4,86,476 in 2013. According to the data, 1,46,133 people were killed in road accidents in 2015, compared with 1,39,761 in 2014, and 1,37,572 in 2013. However, the ministry also said that road accidents are caused “due to the complex interaction of a number of factors”, which include aspects such as increase in vehicular population, driver’s fault, mechanical defects in the vehicles, fault of pedestrians, bad roads, bad weather, increase in population, heterogeneous traffic.

“It is the need of the hour, but some concerns have to be ironed out first. For example, cars without commercial registration do not have to pay state taxes while crossing states in Delhi-NCR. It could be opposed by Haryana and Uttar Pradesh, but it can be worked out,” a senior government official said. Furthermore, the driver community, which is already under stress from reduced incentives, cab-aggregator companies could also contend the proposal.
A Delhi-based driver, who has his car attached to Uber, said that registration fee for commercial vehicles in Delhi was Rs 6,000-7,000 higher than for it is for private cars, depending on model to model. “If private cars are allowed for commercial use, then we might as well sell all our commercial vehicles and drive second-hand private cars. Why should we pay extra for commercial vehicle registration?” the driver said.

In February this year, drivers affiliated with Uber and its Indian rival Ola, had gone on a strike to protest an alleged reduction in the incentives paid by these companies. A recent report by RedSeer Consulting pointed out that driver incentives as a percentage of the gross booking value had fallen to 25 per cent in May, compared with 32 per cent in March, and 52 per cent in January. “Rationalisation of driver incentives spending has enabled better unit economics for the industry. However, RedSeer research shows that this has come at the cost of falling driver satisfaction with the players — also leading to many of them leaving the platforms and potentially threatening the industry growth,” the consultancy firm said.

Apart from these issues, a number of policy-related lacuna might also arise. A document published by the Niti Aayog and Rocky Mountain Institute in May this year, titled ‘India Leaps Ahead: Transformative Mobility Solutions For All’, said that a shared system that is based on “usership”, and not ownership, could increase utilisation and decrease congestion, providing better service and greater access at lower cost. However, it points out that policies adopted by certain states could prove a hurdle towards implementation of such a proposal. “Many states’ contract carriage permit policy inhibits ridesharing by allowing only point-to-point trips; in other words, it prevents service providers from picking up and dropping off passengers along a specified route. While this statute enables free carpooling like Ola CarPool, some states may not permit ridesharing services like UberPOOL,” the document noted.

To counter this, the report suggests, policies need to be revised to allow driver-owned fleets of transportation network companies and other private service providers to operate with stage carriage permits. Interestingly, the Motor Vehicles Amendment Act, 2016, has liberalised the issuance of licences of aggregators, and has also suggested that states follow central government’s guidelines on the same.

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