Potentials of Car sharing in India

A. Introduction

This paper examines and applies a tool to assess the market potential for new car-sharing operations in urban communities. Specifically, this paper analyzes geographic market segments in urban areas through a GIS-based analysis of 2 cities in India - Bangalore and Pune. Based on the results from this analysis, thresholds are outlined for high service areas where car-sharing is likely to flourish. The research reported in this paper is based on an analysis conducted for Zoomcar.

One of the newest additions to the transportation toolbox, car-sharing has attracted considerable excitement from communities seeking ways to reduce their dependence on the private automobile. Planning for car-sharing has been hampered, however, by uncertainties over the types of neighborhoods that can support an economically viable car-sharing operation. Until now, there has been no quantitative data to identify the core characteristics of neighborhoods that support car-sharing. This paper presents a descriptive model, derived from analyzing survey data from Bangalore and Pune, that can help to analyze the market potential in other areas. The data was collected through a survey conducted in September 2014. Based on the data collected Demand maps were created using GIS.

The analysis presented in the paper shows more of a demand model than a supply model. In other words the study was undertaken to understand where consumers would like Zoomcar to be next. It is reasonable to assume that demand is closely related to supply, as car sharing operators tend to add vehicles to neighborhoods where there is demand.

B. Car sharing in India

India is the 7th largest country in the world, by area, with a population of ~1.2 billion people and rising. 30% of india’s population lives in urban areas. A growing demand for public transportation has led to more air pollution and green house gas emissions. A study conducted by the Central Pollution Control Board (New Delhi, India) in six cities – Delhi, Kanpur, Bangalore, Pune, Chennai, and Mumbai, concluded that the transport sector contributes to more than 30 percent of the ambient air quality in these cities – either directly from the vehicle exhaust or indirectly via the re-suspension of dust on roads due to vehicular movement. According to the US Energy Information Administration, India's transportation energy use will grow at about 5.5 percent a year –

significantly higher than the world average of 1.4 percent per year, more than quadrupling the total energy use from road transport by 2035. Likewise the per capita energy use for passenger vehicles in India is estimated to increase threefold. Furthermore, air pollution also causes a number of environmental and health hazards.

One solution to this problem, is to introduce new transportation models. One of the models that has been successfully implemented is the self drive concept in Bangalore and Pune started by Zoomcar. 95% of taxi service in India is chauffeur driven. On the other hand, Zoomcar is a car sharing organization. Car sharing gives members access to automobiles for short term use. The shared cars are distributed across a network of locations. Members can access cars at anytime with a reservation and are charged by time or distance driven. Car sharing reduces the fixed cost of owning a vehicle (insurance, depreciation, taxes) for an individual user while retaining access to all the benefits.

Zoomcar has only been in India for the last 18 months but the demand for self drive cars has been tremendous. With increasing demand there needs to be an increase in Zoomcar’s pick up locations. To determine where to place new Zoomcar pick up locations, we conducted a short survey, which received 715 responses, to understand where there is maximum member demand for a pick up location. The survey consisted of 5 questions.

1. City 2. Would the members travel within the city or Outstations3. How far would they commute to a Zoomcar pick up location4. Where they would like to see Zoomcar next5. Email address.

Figure 1:Number of registrations in the last 14 months

2013 Sep

2013 Oct

2013 Nov

2013 Dec

2014 Jan

2014 Feb

2014 Mar

2014 April

2014 May

2016 June

2014 July

2014 Aug

2014 Sep

2014 Oct

0

1750

3500

5250

7000

Number of registera-tions

C. Results

Survey Responses

Media Reponses

Facebook 126Emails 590Total 716

Figure 2: Distance people are willing to commute to their pick up location

From the above graph we

can conclude that in Bangalore and Pune the maximum distance people are willing to commute to pick up a Zoomcar is 1km.

Figure 3:

Outstation Vs Locally

From the graph above we can conclude:

500 Meters 1 Km 1.5 Km0

75

150

225

300

BangalorePune

Bangalore Pune0

100

200

300

400

LocallyOutstation

In Bangalore, more people would hire a Zoomcar to travel locally.In Pune, more people would hire a Zoomcar to travel to outstations.

From the survey responses we received, we created demand maps to understand the following:

1. How demand can guide business decisions;2. Help in micro siting a pick up location3. Tech gimmick to get engagement on our page from people who

aren't users yet.

Maps

1. Heat Maps

A heat map is a graphical representation of data using colors to indicate the level of activity. This map represents the customer demand for where to set up the next Zoomcar pick up location. The darker the shade, the higher the demand.

Figure 4: Heat Map Bangalore

Figure 5: Heat Map Pune

2.

Intensity Map

An intensity map is a color coded map. Different colors represent different intensities of the observed value. The increasing color values portray increasing measure of intensity. It is an effective way to show characterization of a distribution. In this map, the pins represent places where a customer has indicated they would like to see Zoomcar next. The

darker color indicates higher intensity.

Figure 6: Intensity Map Bangalore

Figure 7: Intensity Map Pune

3.

Cluster Maps

This map indicates the customer demand in different areas.

Figure 8: Cluster Map Bangalore

Figure 9: Cluster Map Pune

4. Buffer Maps

This map represents how far a customer is willing to commute to his pick up location. As you can see there are several circles marked on this map. The circle indicates the distance the customer is willing to commute to pick up the Zoomcar. In our survey we asked how far one is willing to

commute (for e.g. 0.5 km, 1km or 1.5 km). If one has mentioned a 1km then a buffer of 1km is drawn around where they have dropped the location pin. The same (including the buffer) has been done for 0.5 and 1.5 km. The ruler tool can be used to measure distance between two points.

Figure 10: Buffer Map

D. Software

1. Cartodb

2.Javascript

E. Impact Assessment

Car sharing gives members access to automobile for short term use. The shared cars are distributed across a network of locations. Members can access the car at anytime with a reservation and are charged by time or distance driven. Car sharing reduces the fixed cost of owning a vehicle (insurance, depreciation, taxes) to an individual user. It is emerging as an alternative travel mode that is both flexible and less expensive than traditional ownership. Car sharing is changing the transportation landscape of the metropolitan cities.

Figure 11: Impact Assessment Survey For Zoomcar

F. Results from Impact Assessment Survey

The impact assessment survey is to understand the effect of car sharing In 2 cities in India, Bangalore and Pune. Through the survey Zoom can understand the following.1. Circumstances under which a member joins a car sharing

organization

2. Customer behavior

3. Change in vehicle ownership

4. If the industry influences the choice of car

5. Reduced carbon emissions of a member

6. How many cars does Zoom help to get off the road

G. Vehicle ownership Impacts

In developed countries, self drive cars are not a new concept. A number of different research studies have been conducted in different parts of the world. A 2008 study conducted in the USA, found that after participating in car sharing programs, US households reduced their overall car ownership by 49% with most of its shift from one car household to no car house hold. 21% of the Texan households would expect to give up at least one of their private vehicles. The San Francisco Bay area looked at long term effects of membership and found that vehicle shedding effects level off with length of membership. A first year look in Philadelphia estimates that each PhillyCar share vehicle replaced, on average, 23 private vehicles. Other North American studies have estimated the vehicle replacement rate is closer to one car sharing vehicle per 15 privately owned vehicles.

The average level of ownership of cars in India, currently 13 per 1,000 population, is expected to grow exponentially. Estimating the average level of ownership in 2025 at 35 per 1,000, this article points out that the growing number of cars has serious implications for energy security, air pollution, road safety, and equitable allocation of road space, and argues that there is an urgent need for India to learn from the experiences of cities that have decoupled car ownership from economic growth, and reduce the rate of car ownership growth in India. According to the World

Health Organization, India and other countries in Asia will witness a staggering 65% increase in vehicle population by 2020.

G. Environmental Impacts

Upon joining car sharing programs, members tend to drive less than they previously did. Environmental impacts are numerous along the way. First, vehicle “ownership” (in terms of vehicles per person) generally falls with car sharing membership, offering environmental benefits from vehicle production and parking infrastructure savings. Second, car sharing has impacts on kilometers travelled by vehicle and vehicle utilization rates (and thereby fleet replacement rates), which tends to reduce fuel consumption. Lastly, car sharing shifts many trips previously carried out by private automobile to transit and non-motorized modes (as well as some trips previously carried out by non-auto modes to shared cars). Prior research study conducted in North America estimated that while some car sharing members increase and others decrease their annual emissions, the net impact is an annual of reduction of -0.58 tons of GHG emission and 0.84 tons of GHG emission in full impact (including forgone vehicle purchase)

H. Real cost of owing a car

Depreciation is far and away the biggest expense of private car ownership. Your shiny new car will lose almost 10% of its value as soon as you drive it off the showroom floor, and 30 to 40% in the first year of ownership alone.• Fuel Costs: If there is one thing that has always increased with time,

it’s the cost of fuel in India. Petrol and diesel are more expensive than ever before and fuel alone – especially petrol – can cost as much as your monthly car payment, depending on how you drive your car.

• Interest: Your monthly car payment includes not only payments towards the original loan, but also the interest due on it. You will be charged interest rates between 6 and 14%.

• Taxes: Car loans generally do not cover other expenses like local taxes and car registration. In Mumbai, the local tax alone adds 5.5% to the showroom price of a car.

• Scheduled maintenance: On average, Indian cars require scheduled service twice a year. Expect to pay from Rs.2 000 per visit, but this amount will increase as your cars ages and some luxury cars like

Mercedes can cost Rs. 15,000 per visit. Very few cars sold in India are covered by service plans that include routine maintenance.

• Unscheduled maintenance: Though most modern cars are generally very reliable it is not uncommon for a Maruti Esteem’s air conditioner compressor – or a Honda’s fuel pump – to fail. Replacement parts can be very expensive.

• Insurance: Insurance is another unavoidable cost of car ownership. Current rates for comprehensive insurance are anywhere between 3 and 4% of a car’s book value.

• Repair costs: Consider yourself lucky if you don’t damage your car’s body or engine in the first three years of ownership. Modern cars are exceedingly efficient and reliable, but accidental damage can be exceedingly expensive to repair.

• Accessorizing: Most car buyers opt for optional extras such as upgraded music systems, anti-theft alarms, body kits, custom alloy wheels etc. Accessories also add to the overall ownership cost.

• Miscellaneous expenses: Parking costs, tolls, and tickets are just some of the additional charges that you will need to be prepared to pay for as a car owner.

I. Conclusion

The brilliant thing about car-sharing is that it leads people to drive less by providing access to cars. It allows people to give up their personal vehicles (along with the gas, maintenance, parking, and insurance costs they entail) without giving up the ability to use the car once in a while when necessary. It diminishes the need for parking spaces, since one vehicle can serve several households. And it makes people think harder about the trips they take, since each trip constitutes a higher cost than in a personal vehicle, which come with high upfront costs but low per-trip costs, encouraging more driving just to get your money’s worth out of your investment. The other environmental and social impacts would be a)fewer vehicle miles traveled, b) fewer cars being manufactured, and c) more efficient vehicles being used more of the time d)reduced carbon emissions. After all, car-sharing can avoid SUV syndrome, where people buy a big, heavy car for the one time a year that they actually go into the mountains with it, and then spend the rest of the year driving alone on highways and trying to park it in small spaces. Also, intensively-used shared cars will be replaced more often than private vehicles, meaning that more of them will have the most modern fuel-efficiency ratings.

G. References

1. http://www.slideshare.net/nehabudhiraja16/transport-problems-in- urban-india

2. Paper on ‘WHERE DOES CAR-SHARING WORK? USING GIS TO ASSESS MARKET POTENTIAL’ by Christine Celsor, 2007

3. Paper on ‘Greenhouse Gas Emission Impacts of Car sharing in North America’ by Elliot Martin and Susan Shaheen , 2010

4. Paper on ‘Opportunities for and Impacts of Carsharing :A Survey of the Austin, Texas Market’ by Bin Zhou and Kara Kockelman