Mobility over ownership
Emerging threats to the automobile industry such
as Uber and driverless cars provide mobility via access rather than ownership.
Research shows that this can lead to greater savings, less traffic, less
pollution and a better quality of life
India has become a regional hub for the
manufacture of small cars. We produce more than three million passenger cars
annually.
The automobile industry, which includes scooters
and motor cycles as well, accounts for about eight per cent of the GDP (that's
roughly Rs 8 lakh crore), and contributes one fifth of all excise duty collected.
It provides jobs to 2 crore people. It is also considered the single largest
job creator every year, employing ten lakh new drivers. Naturally, it is a
darling of both the government and investors.
Most of the famous foreign brands of automobiles
are already manufacturing in India.Their Indian competition comes from
companies like Tata, Mahindra, Bajaj, Hero, TVS and others. This week, while
unveiling new models of cars, Chairman Anand Mahindra said that the car
industry was facing a threat from the emergence of Uber and Ola. This was not
meant to add to the already negative sentiment against these companies from
taxi unions. It was meant to be a factual statement of the disruptive force of
mobile app-based taxi services. He said that society was moving away from the
concept of ownership to the concept of access. What the youth want is mobility,
not a car. Uber and Ola have unleashed the sharing economy which makes it
possible to have comfortable mobility without owning a car.
Before internet there was always the
share-ataxi. When you get down at Dadar station or CST, four people get into a
kaali-peeli. Because of high occupancy, this reduces the number of taxis
required. But this arrangement works only at peak hours. During non-peak hours,
many taxis just hang around waiting for passengers. Now imagine that all taxi
services are `Uberized' and all vehicles are fitted with GPS enabled mobiles.
That includes the black and yellow, the blue, the Merus and Easy Cabs as well
as the Uber and Ola. And now imagine that all access is through mobilebased
apps, which locates the nearest vehicle, and optimizes the routes. This
enlarges the scope of the share-a-taxi phenomenon. Such an “imag ination“ of
city-wide Uberization was carried out in a detailed research project conducted
by Columbia University in 2012. The researchers applied their study to
Manhattan. They also included the possibility of driverless cars. Manhattan has
1.6 million people, about 0.4 million trips per day, with an average trip
lasting 11 minutes and stretching to two miles. Their research finding was
simply astonishing. They concluded that costs would come down by 90 per cent
due to savings from fewer taxis, lesser “empty miles“ and lower labour costs.
The savings have a domino effect. Less cars means less traffic, less delays and
less real estate required for parking. This translates to less demand for cars,
and that's what Mr. Mahindra meant, when he said Uber and Ola can reduce
demand. This also means lesser demand for car loans and falling real estate
prices.Less demand for loans means falling interest rates. This chain of
reasoning could go on.
And if driverless cars catch on (such cars are
already being tested on California highways by Google), then demand for drivers
will also fall drastically.
For the automobile industry, this sounds like
ascary scenario declining demand, and less employment for drivers. But
society will benefit immensely. Less traffic congestion on its own eliminates
wasted human hours. Then there is less pollution and better air quality. Maybe
real estate prices will fall enough for homes to become affordable. People will
have shorter commutes.The cities will become walkable. Using renewable energy
like solar on dedicated point-topoint mobility services will also enhance
quality of life. As time is released from commuting, traffic or even driving,
it could be channelled to other creative and recreational services. A smart
city might emerge.
The change of paradigm is from demanding a car,
to demanding mobility. The possibilities are endless.
|
AJIT RANADE
|
MM12SEP15
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