its in intermediate public transport and safety

ITS IN INTERMDIATE PUBLIC TRANSPORT AND SAFETY

Umang JainManaging AssociateWRI IndiaSustainable CitiesUmang.jain@wri.org

New DelhiApril 07, 2016

India to be 40%Urbanized by 2030

Scenario

Existing Public Transport is overloaded

Informal Public Transport system

IPT is playing an important role in filling the gaps in meeting daily

mobility needs.

Pre JnNURM…..20 cities had formal PT system

Mostly big cities had bus system

Most cities relied heavily on IPT system

Shared Autos MinibusesTata MagicTaxis

Overview of IPT Sector

Stake Holders &Beneficiari

es

Infrastructure

Operation &

Finances

Vehicles

Regulations

Enforcement

Bus stops repair facilities

FareCapital Cost

O & MRidershipRevenueVehicle

UtilizationManufacturers

ModelsPermit

MaintenanceFitness

CertificatePUCRoutes/

PermitsVehicles

FaresSchedules

Infrastructure

Quality of ServiceTraffic Police

DealersInsurance CompanyRoute President

Union/Association of Owners

Transit AgencyTraffic PoliceFinance CompaniesMiddle MenUsersConductorsDriversOperators / OwnersRTO

Self Drive

n

Hired Drive

rs

Salaried

Contract (Fixed amount to be paid to owner )

Routes Permit

sDrivin

g-Licens

e

Min

ibu

s S

ect

or

Private Sector Stakeholders

90-95% owners own 1-2 vehicles

There are two models of operations

Owner drives the vehicle (owner-driver) Owner rents the vehicle to a driver for a fixed fee (renter-driver)

Highly fragmented sector

Difficult to manage

1. Tata Magic & Minibus Owners

Association is headed by a president

President’s source of power is the # permits

Not involved in daily operations

Important stakeholder due to links in the system

Orderly dispatch of vehicles through route managers

Route managers are elected by owners

Payment @Rs 10/vehicle /day to the route manager by the owners

2.Tata Magic Association

Association is headed by a president

President’s source of power is the # permits

Engages with RTO, Traffic Police and other departments on behalf of owners

Not involved in daily operations

Important stakeholder due to links in the system

2.MiniBus Association

3. Drivers-Personal InformationAge Profile of Drivers

39% of the drivers are in the age group of 30-40

years.

Educational Qualification

58 % of drivers are educated till 8 th standard

Migrants Vs Localites

23% of drivers are migrants

Work Experience

upto10 yrs –55%

3. Drivers-Personal Information

Monthly Earning Monthly Savings

Low standard of living

4.Conductors- Personal InformationAge Profile of Conductors

59% of the conductors are less than 35 years of age.

Educational Qualification

70% of conductors are educated till 8 th standard

Migrants Vs Locals

14% of conductors are Migrants

Work Experience

upto10 yrs – 80%

4.Conductors- Operation Details

Average daily earnings -Rs 3500-4000

Passengers/Day/Minibus

3. Revenue/Day/Minibus

Trips/Day/Minibus

Finance Companies preferred over banks as they are faster in completing formalities

Major Finance Companies are

Tata Finance (62% market share)Sriram Finance (19% market share)Shakti Finance (19% market share)

Tata Magic vehicles cost around Rs. 3,76,000 for a new vehicleFinanced at 11.5% rate of interest for a term of 5 to 7 years.

5.Finance Companies

Companies Finance 80% value of the cost for new Minibus

5.Finance Companies

Terms of Finance (New Vehicle)

Companies Finance 40-50% value of the cost for second hand Minibuses

Terms of Finance (Old Vehicles)

Permeated the entire systemDriving LicenseFitnessPermits for vehicles

Temporary Permits: Agent Charges around Rs 2000 which officially cost Rs 750

Beneficiaries of the above include

Officials in permit branch of RTO ,Inspectors of fitness department etc

Agent earns up to Rs 350 per transaction

Permanent Permit: Agent Charges around Rs 4000 and earns a profit of Rs 700-800 per transaction

6. Middle Men(Agents)

Public Sector Stakeholders

Decides routes to be operated on basis of surveys(ad hoc)

Issues permits(capped) on submission of:

Permit fees along with documentsTax ReportColour ReportSpeed Governor Report

1.RTO

Enforcement of rules and regulations

Enforcement ofvalidity of driversvalidity of permitsvalid vehicle registration and certifications( fitness & PUC)checks on illegal parkingchecks on vehicles stopping at designated stops for pick-up/drop-off,checks to prevent overloading of vehicles

2.Traffic Police

Detailed Costs & Revenues of Public Transport Operations

ParameterTATA Magic:

No Overloading

Mini Bus: 6m Big Bus: 12m Midi Bus: 9m

# in operation 1375 2130 320

Revenue/Km 10.40 10.40 5.20 19.33 30.00Operation Costs/Km 11.08 8.77 11.08 20.41 42.00 24.41

EMI 0.41 0.41 0.41 4.00 2.00Maintenance and depreciation 0.89 0.89 1.37 7.00 1.37Permit, Insurance and Taxes 0.11 0.11 1.00 0.37Fitness 0.01 0.01 0.04 0.04Fuel 4.07 4.07 4.07 10.00 25.00 12.00Conductor remuneration 0.15 0.15 0.15 2.50 1.50 2.50Miscellaneous 0.44 0.44 0.44 0.22 2.00 0.22Payment to the Owner 3.70 5.20Driver Remuneration 5.00 5.00 1.50 5.00

Avg Age of Vehicle 5 5 8 5 NA

TATA Magic

1. TATA Magics and mini-buses not profitable if they don’t overload2. TATA Magics undercut minibuses, which in turn undercut big buses leading to

low quality of service.

1. Overlapping Routes

Significant overlap of routes

Formal Bus Services and IPT modes compete amongst themselves

Issues

2. Vehicles- Overcrowding

Tata Magic

Official seating capacity of 7 passengers

In actual practice, upto 14 passengers are carried at a time to make the operations viable

Issues

Overcrowded Vehicles

3. Fares

Minibus fares are regulated by the Transport Department at the State level.

The actual fares charged depends on each individual conductorIn most cases, fare charged< prescribed fares

Issues

4. Non Adherence to Schedules Minibus

RTO doesn’t prescribes schedules

No route managers, therefore bunching, unreliable operations

Tata Magic

RTO doesn’t prescribes schedules

Route Managers (appointed by the operators) manage dispatch of vehicles at specific points,

Issues

5. Infrastructure

No designated stops for either Tata Magic or minibuses

No depots, parking spaces

No designated maintenance, washing and repair facilities

Issues

Infrastructure

No designated mini bus stop

Regulation and Enforcement

Parameters Regulation Enforcement

Routes/Permits O x

Vehicles O x

Fares O x

Schedule X x

Infrastructure X x

Quality of Service X x

X denotes absence of regulation/ enforcement

Hidden Beneficiaries

Beneficiary DescriptionMiddlemen/agents They benefit from the complex regulatory processes in

place, and partake in rent seeking activities to help applicants circumvent this system

RTO It has been reported from surveys that some officials within the RTO partake in the rent seeking process, in collusion with the middlemen/agents

Traffic Police They are benefitting from the system by allowing illegal operations to continue in exchange for monetary compensation. Specifically, it was observed that Tata Magic vehicles with rural permits operate illegally within city limits, through the payment of bribes to Traffic Police

1. Lack of Integrated System

Tata Magic, minibuses and formal buses compete with each otherDo not operate in integrated/complementary manner

Key Challenges-IPT

2. Poor Quality of ServiceLow fares & need to maximize revenues per trip lead operators to overload their vehicles beyond their official seating capacity, leading to overcrowdingOperators focus on providing service mainly during peak periods to maximize revenue, resulting in unreliable services during off-peak periods, which have lower demand

Key Challenges-IPT

3. Challenges faced by Operators

Long working hours (typically 12-14 hours per day) and generate low net earnings. Majority of the minibus drivers (55%) earn in the range of Rs. 10,000 – 15,000 per month, while 45% are reported to earn Rs. 5,000 – 10,000 per month.

Competition between operators is further impacting the business.

Operating in the unorganized sector with irregular incomes has impacted their credit history, resulting in many loan defaulters

Minibus and Tata Magic drivers lack access to formal sector employment benefits such as pension and insurance

Operating for long working hours has an impact on physical health of drivers

Drivers have to constantly face harassment from Traffic Police and middlemen/agents

Key Challenges-IPT

Remedial Measures

1. Increase compliance, stop encroachment, under cutting (public notices, spot checks)1. Overloading2. Operating outside route limits3. Old vehicles

2. Develop roadmap to move to BS IV compliance by 2017 (National Green Tribunal Order)

3. Create public information & data about routes, buses, stops for intermediate public transport

Incremental Actions

Increase Compliance

Public notices, Spot checks for overloading, low fare charging & old vehicles

Enforcement by Police

Technologies can be used – speed governors, GPS based monitoring (Will have similar costs)

Impounding of vehicles

This has been demonstrated again in Nairobi with the ‘Digital Matatu’Matatu route-mapping exercise conducted jointly by Columbia University and University of NairobiAs of today, 120 routes have been mapped and geocoded and available for free useThe map has been adopted by the government of Nairobi and has been made the official ‘Nairobi Matatu Map’The map is also used and referred to by Matatu drivers and the general publicThis publicly available transit data, has proved to be a valuable resource for the government as typically there is very little data available for public transport planning in Nairobi.

Global Case Study-Nairobi, Kenya

Create public information – Digital Matatus Initiative (Nairobi)

Public notices specifying timeline of April1, 2017 to upgrade to BS IV norms

No new permits shall be issued to vehicles that do not comply with BS IV norms after April 2017

Government can create a fund – for route associations, operators to access to finance new vehicles

Government can tie up with financial institutions like banks to provide loans and act as guarantors

Roadmap to BSIV

Comprehensive Approach

Comprehensive Approach

Develop City Wide Reform Plan

Create Unifying Authority

Create Options for IPT operators

and Route Associations

1.City wide Reform Plan

Develop a detailed public transport demand study for the city Classify corridors and routes for

Big bus operations- Trunk Routes (Grade A Routes)Mini/midi buses- Lower Demand Ods (Grade B Routes)Tata Magics – Realigned as Feeders (Grade C Routes)

Preliminary estimates suggest 30-40% demand will be for big buses, 30-50% demand will be for midi and mini buses and 10-20% demand will be for TATA Magics

2. Create Unifying Authority

Four Options:

1. Regional Transport Authority (RTA) takes the mandate of unifying transport authority for public transport planning, regulation and management

2. Transit Agency is given the mandate to plan, coordinate and manage all public transport services in the city

3. Existing Unified Metropolitan Transport Authority (UMTA) created as part of the JnNURM program plays the role of integrated planning, regulation and management of public transport services

4. UMTA with enhanced power under the Road Transport and Safety Bill 2014

3. Create Options for IPT operators & Route Associations

1. Transit Agency contracts private operators to operate big buses on major arterials on grade A routes

2. Tata Magic Operators & Route Association Members - 1. Realigned as feeders2. Come together and form companies to operate big buses,

alternatively upgrade to mini/midibuses3. Exit the system

3. Mini bus operators to upgrade to midi buses,1. Operate complementary to big buses on low demand ODs, or2. Come together and form companies to operate big buses3. Exit the system

Main Commitments Required

Repurposing the TATA MagicsCommitment to moving to BSIV by 2017Managed Subsidies Land for depots and terminalsNegotiating with private operators, route associations Capacity building for private operators

ITS in Informal Transport

ITS

FARES

VEHICLES

INFRASTRUCTURE

QUALITY OF

SERVICE

SCHEDULES

ROUTES

ITS in Informal Transport

GPS

Missed Stops

Missing trips

SchedulingPassenger

Information System

Route Deviation

ITS in Informal Transport

CCTV

Women’s safety

Crew Operating

HoursOverloading

ITS in Informal Transport

ETM

Fare Leakage

Passenger Travel Data

Route Rationali

zation

Scheduling

EMERGING TRENDS

Ride-sourcing Platformsare disrupting informal markets.

Car / Taxi

Auto Rickshaw

Indian company

Though mired in regulatory issues, P2P models are well developed in India. Ola Cabs bought TaxiForSure for $200 million in a cash and stock deal— the second-ďiggest ever iŶ IŶdia’s fledgliŶg startup world in 2014.

Auto Rickshaw aggregation is still in early stages in India but is gaining scale via growing startups and inclusion of rickshaws on the Ola and Uber platforms.

P2P B2C Auto rickshaw Booking (P2P)

Taxi Booking

Taxi Rental

Car Rental

NEW TRENDS IN IPT

Trend 3: Commuter Experienceis driving new businesses.

Driver Training

Transit Apps

Easy Payments

Driving Schools Trip Planning & Schedules

Aggregator of Aggregators

Traffic

Indian company

Driving Programmes

Automotive companies like Maruti, Toyota etc. have their own driving schools. In PPP models with the government, these offer most of the driver training in the country.

Transit Apps are growing at an phenomenal pace globally and in India. With open data, smartphone penetration, and technological advancement, this area will see a lot of activity.

IPT providers like Ola Cabs, Uber are at the forefront with offering commuters to pay through mobile wallets. Banks are also joining hands with PPP projects to provide payment cards, which can also function as debit cards. However, no startups have emerged in this area to really facilitate seamless payments.

Benefit to Consumers

IPT is integral to satisfy mobility needs of the people

There is a need to formalize the informal system

The strategy comprises of:

Incremental ActionsComprehensive Approach

ITS can go a long way in streamlining IPT

Conclusion

Thank you!