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Small Cities Glide Their Commutes With Rapid Mobility Options India's tier II and III cities are untapped markets still witnessing the first wave of economic development

By Aravind Sanka

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Imagine busy roads packed with traffic, your important pending tasks, and a paucity of time to finish them all. As one travels amid bustling cities, noises of loud horns and roadblocks, the narrow passages between queued-up cars make us ponder a better alternative for zooming past this congestion. With the population rising and economic activity reaching its pinnacle, the traditional two-wheeler is the only swifter option to whizz past all congestion.

According to TomTom traffic statistics, India is home to two of the top 10 most jam-packed cities worldwide. Despite wider roads and an expanding public transport system, these alarming numbers exist to dampen our will to commute daily. While big cities have an overcrowded public transportation system, some smaller ones are still developing it. All this brings us a need for slick mobility services that can steer clear of traffic snarls, reduce commute time and save us from congestion.

The popular mode of commute in small cities

In many small cities of India, the public transportation system is either developing or underdeveloped. This leaves people with an increased reliance on their vehicles. Owning a personal car is not very convenient in these small towns, given that the average income in these cities is less than one attainable in metro cities. At such odds, the services of auto rickshaws, cabs, and bike taxis have come in handy. Looking from a long-term perspective, commuting by hiring auto rickshaws or taxis is much more affordable than owning a car. In all those spots where cab services are expensive and inconvenient, bike taxis are emerging as a solution to surf through narrow lanes.

The cheaper hourly or per kilometer rates and the facility of multiple halts are a practical way to get the job done quickly. Bike taxi aggregators are now finding smaller cities as apt places to set up their base and offer a cheaper and more convenient mode of transportation. These services have gained popularity over the years, with India's bike taxi market valued at $50.5 million in 2021. They are expected to reach $1,478.0 million by 2030, registering a CAGR of about 48 per cent from 2022 to 2030. Such statistics are promising and are leading the way for India's new, swift and innovative mobility services sector.

Electric vehicles to power future mobility needs

Besides cab and bike taxi aggregators, vehicle ownership and autorickshaw commutes in smaller cities also see a significant revamp with the onset of the electric vehicles revolution. As per reports, three-wheelers in India account for the highest number of electric vehicle registrations standing at 65 per cent, with two-wheelers being 30 per cent and EV cars being 2.5 per cent of total electric vehicle registrations in India.

A push also comes toward electric vehicles from the Department of Heavy Industry's Faster Adoption of Electric Mobility (FAME) scheme, wherein the government is offering a subsidy to the tune of INR 15,000 per kWh for the public to procure and use electric vehicles. The total outlay under this scheme is INR 10,000 crore, which is kept aside by the government to disburse over three years, w.e.f. April 1, 2019. Under phase 1 of the FAME scheme, about 280,987 hybrid electric vehicles are being subsided, while phase 2 of the scheme emphasizes the electrification of 70,000 buses, 500,000 electric three-wheelers, 5,595 electric four-wheelers, and 1 million electric two-wheelers. The process of obtaining the subsidy is simple, with the amount being directly subtracted from the total cost of the electric vehicle at the dealer's end. The dealer directly makes all claims under the subsidy from the government without any additional paperwork or burden on the consumer.

Way ahead for small cities

India's tier II and III cities are untapped markets still witnessing the first wave of economic development. With the government's major economic reforms like digitizing payments and introducing as many people into banking systems to build a formal economy, the smaller cities are at a new juncture of development. The economic activity is starting but not fully matured yet in smaller cities. Therefore, the mobility needs there are anticipated to be met either by two-wheelers and auto rickshaws or through the government's public transport network if it develops fully. As the future for smaller cities is interesting, the one thing certain here is that hiring transport for quick and local commutes remains the cheapest option, and small cities are bursting with opportunities.

Aravind Sanka

Co-founder, Rapido

Aravind Sanka is the Co-founder of Rapido, India's first and largest bike taxi app focused on making commuters' daily intracity travel affordable, faster and safer. At Rapido, Aravind plays a key role in realizing the mission and vision of the company, besides spearheading the product development, strategy and finance division of the firm.

An IIT-Bhubaneswar alumnus, Aravind started working for the e-commerce giant Flipkart’s logistics division Ekart in XX (year). For 3.5 years, the professional was deeply involved in the financial planning and expansion of logistics of Ekart. Aravind has played a vital role in accelerating the growth trajectory of Ekart from 10 to 100 cities. He has also been a part of various initiatives and was involved in initiating the last mile logistics service for the firm.

With Rapido, Aravind envisages saving people’s time and money and impacting millions of lives in the country. He also envisions Rapido as the most sought-after ride-sharing app and every commuter’s daily travel choice.

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