Shared Mobility vs. Car Ownership: A Clear Emerging Trend for Digital India

Based on recently published estimates, over 850 million Indians are below the age of 35. With these younger people adopting new global trends far quicker than the generation before, it is expected that emerging first-time potential car buyers in a digital India will choose from shared, self-drive rentals or subscription-based mobility options, rather than bothering with car ownership. This is in-step with what is a strongly emergent trend in urban centres of the US and Europe.

In India, owning a car has always been associated with status; people aspire to move up from a two-wheeler to a car, as a statement of having economically arrived. However, with the explosive growth in vehicles and the resultant pressures of traffic congestion and parking, this status symbol isn’t worth as much anymore.

Even with a relatively low 30 cars owned per thousand population, Indians are already feeling the need to do things differently. With no slow-down to vehicle sales and the urbanization megatrend continuing to play-out, owning and maintaining a personal car is turning out to be far too much of a hassle. With multiple rides and shared-mobility options now prevalent in major cities, Indians too are beginning to question their expectations for personal mobility.

And people in India are not new to the concept of shared commuting. Shared taxis and auto-rickshaws have been a necessary and well-accepted practice in the country for decades. Shared cabs shuttling between Mumbai and Pune, taking three to four passengers, including luggage, have been an inter-city option since taxis were first licenced in the country.  In most towns, fleets of auto-rickshaws, driving fixed routes, loading up with passengers well above their allowed capacity, dropping them along the way wherever they want to get off, are a familiar sight.

While such archaic public transport systems still operate in the country, technologically-enabled shared-mobility providers, such as Uber and Ola, have proven their capability to provide reliable, convenient, (mostly) safe and cost-effective alternatives for urban India. Leveraging on the burgeoning smart-phone utilisation and improved internet connectivity, and by focusing on accessibility, comfort and safety, these technology companies have encouraged a broad shift of privately-owned vehicle use toward shared mobility. On another positive note, having these mobility options for commuting has encouraged, empowered and enabled more women to consider joining the workforce. In the near and mid-term future, personal transportation in the country will significantly swing to these shared and environmentally-friendly platforms as leading players scale up their vehicle fleets even further and expand deeper into other towns in the country.

Self-driven car rentals are another mobility option currently trending in the country for fulfilling personal transportation requirements. Self-drive rentals are a liberating and empowering experience for users, as they don’t need to bother with maintenance and service. However, only a few enterprises offer self-drive car options nationwide. Such self-drive vehicles need to be easier and more flexible to hire, ranging from hours to days, accessible 24×7 through mobile applications and need to be far more affordable than they are now. They also need to be locally supported with an ecosystem of convenient pick-up and drop-off points, as well as have reserved slots in public parking spaces, railway stations, metro stations and airports. Rental companies should consider scaling-up, initially in smaller cities and towns where ownership of personal vehicles is still low. Promoting such self-drive ventures through partnerships between OEMs, financiers and insurance companies is likely the way forward to ensure maximum vehicle utilisation, as well as sustain new car sales, all while discouraging private ownership. Self-drive rental groups will require scaling-up their inventory to ensure vehicles are available on-demand, encouraging their usage and reinforcing their commitment to flexibility and reliability. Mandated installation of security devices such as speed governors and GPS can mitigate operational risks. Anticipating further policy clarifications allowing private vehicles to be commercially tied with car rental companies, higher enrolments to self-drive fleets in the country are to be expected.

On a more global context, subscription-based business models, allowing consumers access to a range of product/services for days, weeks or months, i.e. streaming videos, music, vehicles, mobile phones, office spaces, are now a way of life. To keep up with the trend, automotive OEMs too have adopted their own, branded versions of subscription services, e.g. Porsche Passport, Mercedes-Benz Flexperience, Access by BMW, providing cost-effective alternatives to traditional car leasing, renting, or purchasing. These subscription services are specifically tailored and targeted for next-gen millennial car users who want simple, economical, hassle-free temporary mobility solutions, with easy cancellation, replacement and return policies. Gauging by the rapidly-growing number of subscribers to recently introduced Netflix and Amazon Prime in India, it’s likely an inevitable conclusion for Indians to also leapfrog to subscription-based car programs as they become more widely available.

Clearly, challenges of rapid urbanisation, traffic congestion, affordability and pollution are the primary driving forces behind digital-savvy Indians re-imagining their mobility requirements. Emerging ride-sharing technologies and self-drive alternatives are at the core of this transformation. Urban commuters in major cities who have done the math, have already smartly concluded that ride-sharing mobility options beat car ownership. The shift from ownership to shared mobility will likely have a profound economic and environmental impact in the years to come, potentially saving the country billions of dollars just in fuel costs alone.