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Urban Public Transportation Slowly Descending Into A Monopoly

Public transport is always playing catch up to meet the requirements of the population. This was observed in the overcrowded trains, buses and rickshaws that plied on the tracks an streets of India. With a low growth, high taxes and a socialist approach to economy, the ordinary citizen depended on public transport for travel. Private transport was a luxury afforded by a few wealthy people.

The Leyland buses that operated in the 1980s
Courtesy: Team-BHP.com

Rickshaws and auto-rickshaws were the feasible modes of transport available to the public. Frequent strikes by auto unions and RTC worker unions brought the cities to a halt. Standards of service by these operators did not help in retention of customers. They improved only when the other was on strike.

While the bus fares were regulated by the government and subsidised to keep the rates low, the fares of rickshaws were arbitrary. Despite meters fitted to the vehicle, they were seldom used by the driver. They quoted prices according to their fancy. Having control over the setting of the fare auto-rickshaw fleeced the customers with exorbitant prices.

Of the three availables modes of transport at the time available to the ordinary citizens – rickshaws, buses and railways – railways offered a better experience. All three transport services operated as a monopsony and the passenger did not have much of a choice.

The Rajdhani Express. Earliest launched air conditioned train in India
Courtesy: Zee Business

The railways due to the courtesy of being a government run transport service saw incremental improvements. It launched the fully air-conditioned Rajdhani trains in the year 1969. Shatabdi trains were introduced in the year 1988. Road transport however was a casualty of poor economic development policies and dithering governance.

The situation of the public transport improved the economic liberalisation of 1991. It abandoned the socialist government control on production and services. This gave breathing space for companies and industry to flourish in a less restrictive marketplace. The period saw India receive foreign investment and the arrival of multinational companies. It coincided with rapid urbanization and rural migration to cities. The governments and other governing bodies did not build the infrastructure to keep pace with the urbanization.

Entry of private players saw a drastic improvement in the transport sector. Before liberalisation, the buses were a by-product of the trucks. Buses were built on the chassis of trucks bought from Tata Motors and Ashok Leyland.

An insight into the period before the entry of Volvo buses
Courtesy: Business Today

Private transport companies had individual fleets of air-conditioned buses. It was the introduction of the Volvo buses on the Indian roads that broke the monopsony of state transport corporations. This enhanced the experience of road travel for the passengers. To stay afloat and be competitive along with private travel companies state transportations added air-conditioned Volvo buses to the existing fleets. The introduction and addition of these buses improved interstate, intrastate and intercity travel.

Intra-city travel continued to remain a woeful experience. The number of buses plying on the roads does meet the needs of the people residing in cities. Infrastructure has not kept pace with the growing population. It resulted in a breakdown of public services. Efforts by governing bodies have lacked the thrust to plan the growth of cities. It is evident by the paucity of the availability of services and infrastructure.

The state of public transport services in the urban centres of India is dismal. Hyderabad and Delhi have been in the news about the state of their urban transport systems for different reasons. It does not suggest that the other cities are faring well on the issue. The malaise runs deep across the states. I picked up the examples of Hyderabad and Delhi as they were in the recent news cycles.

The city of Hyderabad is long waiting for an upgrade in the services and amenities provided by the state road transport corporation. For a city with a population of 10 million (1 crore) people there are only 3800 buses. It comes down to an average of 1 bus for 2600 people. Of the 3800 buses plying on the road, more than 185 buses violate the law by being in service for more than 15 years.

Old buses transporting commuters in Hyderabad.
Courtesy: Telangana Today

As per the law, vehicles over 15 years are prohibited to be in service on the road. These old rusty buses are used by passengers to commute to their destination. With inadequate number of buses available for public use, the delay in procuring new buses is increasing the burden on the existing fleet of buses.

There are other reasons besides a lack of adequate number of vehicles that do not make public road transport services popular among the public. A severe lack of amenities and bad connectivity along bus routes make it irksome. Adding to the paucity of buses, there is a shortage of bus shelters for people to wait to board a bus.

Bus drivers who drive on the routes decided by the state transportation do not stop the buses at the bus shelters. People have to wait on the roads near these shelters to receive their ride. The shelters are available at regular distances in the business hubs of the city. As we move into the interiors they are spaced unevenly and are absent in some places. Such infrastructure adds to the problems of the commuters instead of alleviating theirs issues to make it a pleasant ride.

The capital city of Delhi due to the shortage of its public transport facilities battles with rush hours and air pollution.

The situation is dire in Delhi. Rising number of private vehicles on the roads have made them congested. They add to the pollution levels in the city. To get a grip on its rising pollution levels, the Delhi government has tried to implement an Odd-Even scheme for private vehicles. On specific days, cars with even number plates can be on the roads and vice versa.

Delhi public transport system unable to meet the needs of the public
Courtesy: Down To Earth

However successive governments have failed to tackle the issue of building a robust public transport network in the city. Down to Earth, a fortnightly magazine published by the non-profit Centre for Science and Environment reported that in the year 2013, Delhi road transport corporation had a fleet of 5223 buses operating on 579 routes. By the year 2016, the number of decreased to 4027 which were operational on 474 routes.

The pandemic further exposed the challenges of public transport in urban and suburban areas. Restrictions imposed by travel norms during the pandemic allowed only 30 passengers to travel on buses run by the road transport corporations. These buses have the capacity to ferry around 50 people.

People who commute regularly by these buses find them overcrowded. A study by Climate Trends, a Delhi-based strategic communication body points out the reasons for these overcrowded vehicles. The bus system is India is overwhelmed due to a skewed demand and supply between the vehicles available and the number of passengers.

India’s Public Transport System is under-equipped
Courtesy: Business Insider

According to the study, India possesses 24 percent fewer buses in its public transport than required to meet the necessities of the people. In numerical terms, it means the current fleet of 25,000 buses is inadequate to meet the needs of the people. India requires a whopping 666,667 buses to safely transport its 25 million commuters daily.

This gap in urban public transport was filled by the arrival of private cab aggregators. Ola popped on the scene in 2010. It provided an alternative to the public accustomed to auto rickshaws and buses. The private cabs were rare and few. The arrival of Ola provided respite from the auto rickshaw drivers who quoted exorbitant amounts to transport people.

Uber looking to expand its business globally arrived in India in 2013. With the arrival of Uber, there was a tussle for market share between Ola and Uber. This provided the commuters with low fares and optimal comfort. The auto rickshaw drivers were up in arms as they were losing money. A lot of the blame for the rickshaw drivers losing out on income could be laid at their doorstep.

A thread on Quora examines the reasons for people shifting their loyalties from auto rickshaws to cabs. The auto rickshaw drivers developed a reputation of being rude to the passengers. Backed by the unions that worked like cartels they would demand amounts that caught their fancy. They would not drive passengers if they did not want to. The drivers fleeced tourists and new visitors by taking them for a ride.

This was making earning livelihoods harder for the rickshaw drivers. To cut their losses, they joined hands with the cab aggregators. As the saying goes, ‘If you can’t beat them, join them’, the rickshaw drivers did the same. They became a part of the ecosystem that was being run by Ola and Uber.

Earlier Ola and Uber offered cars as the vehicle of choice to provide their services. The middle income and high middle income families were the main target market for their service. With the autos joining their fleet, they could expand their market to target lower middle income and low income families as well.

Vying to be the market leader, both companies began to attract customers with deals and pricing offers. The battle for dominance has seen the companies compete hard. Both the companies had their share of controversies. Uber found itself in a rape scandal after a driver molested a woman passenger. This saw the cab service banned in a few cities temporarily. Ola faced public backlash after its driver had called a passenger an anti-national.

The loss of Ola’s fleet makes it easy for Uber to become a monopoly.
Courtesy: Financial Express

The companies weathered the storms. However, of late Ola cabs are rarely seen on Indian roads. Uber has become the go to choice of passengers who travel by cab. Ola saw its losses shoot up by 92 percent in FY 19. The loss of revenue stems from its cab leasing business Ola Fleet Technologies. With a reduced fleet Ola is not able to match the penetration of Uber and customers have to wait longer for booking cabs. The prices on Ola are expensive in comparison with its competitor Uber. It saw Uber have a virtual monopoly over the urban public transport system.

Today, the cab drivers are going down the route of the auto drivers. It has not devolved to the levels of the era before the arrival of the cab aggregators. There are however emerging signs that cab drivers are behaving like their auto driver counterparts.

Cab drivers call or message customers after their ride is booked. They ask for details of the location where the passenger is to be dropped. Depending on the answer given by the customer they cancel rides. Customers now have fallen back to the practice they used to with the auto drivers where they gave the address of the locality to get them to drop at the desired destination. The latest development is that the cabbies have stopped returning change. They round off the total and pocket extra change they are supposed to return to the customer.

Despite newer modes of travel such as metros and local trains available, the last mile connectivity to reach the preferred destination is dependent either on buses, autos and cabs. There is a push to modernise the public transport service and private operators try to provide a good service lest they lose consumer. But being a monopoly to themselves, the state transport corporation takes its time to make changes and people are stuck with Uber.

For a small period, the urban consumer experienced and enjoyed a range of options to commute with the city. It was too good to last. And they are once again saddled with a dualistic monopoly.

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