On-demand Buses in India: Opportunities and Challenges in Implementation

Imagine hailing a bus through a smartphone application in India for that daily commute from home to college or work.

On-demand transportation leverages technology to connect a bus in the vicinity with a passenger looking to travel in the same direction This implies following a demand responsive route to a pre-determined destination, finding passengers along the way. In contrast, conventional public buses ply along fixed corridors in a city, expecting to be found by commuters.

Convenient pick up aside, on-demand buses provide their passengers the assurance of seating for the duration of the journey, only allowing as many to board as there are empty seats. Consequently, accommodating fewer passengers on board, unlike conventional buses, also means fewer stops and a relatively quicker commute.

With air-conditioning and, in some cases, wireless internet as one of its features, an on-demand bus may be well-positioned to attract those commuting every day by privately owned vehicles. This is important if our roads are to be rid of traffic jams. An on-demand bus can ferry up to forty passengers, reducing as many cars and motorbikes on the road, thus alleviating congestion. Commuters may also benefit personally, saving capital and operational costs involved in private vehicle ownership and usage.

Despite the benefits on offer for cities and commuters, this model, backed mostly by the private sector, has repeatedly run into problems with state authorities. In Delhi, Mumbai and Bengaluru, where the model has been in service since 2015, operations were suspended from time to time over issues of permit or competition with government-run public transport services.

In recent months, however, government agencies have recognized the benefits described and have sought to regulate the sector. Implementation of on-demand buses has remained a challenge in Indian cities due to three key factors which regulation must address: Permits, fare structures and route selection.

1. Types of Permits:

Public bus transportation in India, in simple terms, may be understood based on how commuters use a bus. If all passengers may only board a bus at Point A and be dropped off at Point B, as it happens on inter-city buses, a Contract Carriage Permit is awarded. On the other hand, if passengers may board or get off a bus anywhere along its route, as on any city bus, the operator needs a Stage Carriage Permit.

For operations in a city, therefore, on-demand bus operators require the latter. They have been unsuccessful in procuring one so far as the issue of such a permit has until now been reserved exclusively for state-run transport corporations. The reason: in order to extend public transport access to the poor, fares had to be kept low, making such operations unviable to the private sector. To guarantee uninterrupted services in such an environment, public transport came to be operated by government agencies.

Targeting a city’s premium-end commuters, however, on-demand bus operators could make a case for Stage Carriage Permit. But with state-run corporations providing air-conditioned bus services as well, regulation will need to ensure on-demand buses complement existing services and don’t compete.

2. Fare Structure:

While competition ensures that fares remain static or low, it may not ensure the long-term viability of either bus service and therefore threaten urban mobility. In a scenario where competition is eliminated, on-demand buses and state-run buses could collaborate in serving a city, resulting in a net addition of bus services.

Such an increase in bus capacity is crucial to meet the travel demands of a city’s rising population, which often turns to private vehicle ownership citing the scarcity of public transport services. For instance, in Bengaluru, studies have indicated a bus fleet requirement of over 10,000 while the city’s public transport provider currently only operates around 6,300 buses.

The elimination of competition may be achieved by a combination of co-operation and optimum fare levels. Working together in Public Private Partnership (PPP) models, the sharing of costs and revenues could better ensure the long-run sustainability of premium public bus services in Indian cities.

3. Route Selection:

Partnerships also hold the key to preventing on-demand bus operators from limiting services to the most profitable routes. A city needs connectivity throughout and not only on select corridors.

The current policy framework in which public buses operate in India allows little room for innovation. With restrictions on permits and capping of premium fares by law in some states, technology-enabled public bus models like the one described here, are too constrained to serve the cities in which they operate.

Greater involvement from the private sector in the provision of on-demand bus transport presents an opportunity for Indian cities to scale up capacity and meet the rising demand for everyday commutes. Enabling more innovation in public transport is crucial for less congested urban roads and more liveable cities.