session 3.2 – formalizing informal transport

49
Informal Transport Sector in India: Issues & Challenges EMBARQ India 6 th Talking Transit Workshop on Integrated Transport Services November10, 2014

Upload: embarq

Post on 30-Jun-2015

223 views

Category:

Government & Nonprofit


0 download

DESCRIPTION

Presenter - Umang Jain

TRANSCRIPT

Page 1: Session 3.2 – Formalizing Informal Transport

Informal Transport Sector in India: Issues & Challenges

EMBARQ India

6th Talking Transit Workshop on Integrated Transport Services

November10, 2014

Page 2: Session 3.2 – Formalizing Informal Transport

India to be 40%Urbanized by 2030

Background

Page 3: Session 3.2 – Formalizing Informal Transport

Scenario

Existing Public Transport is overloaded

Page 4: Session 3.2 – Formalizing Informal Transport

Informal Public Transport system

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

Page 5: Session 3.2 – Formalizing Informal Transport

To conduct in-depth review of Informal transport sector in the country

Objective

IPT Sector

Supply and operating characteristics

Demand characteristics

User perception

Organizational and stakeholder

characteristics

Page 6: Session 3.2 – Formalizing Informal Transport

Public Transport Scenario

Prior to JnNURM Scheme, many cities did not even have a formal city bus service

Most small and medium sized cities, continue to have significant IPT patronage

Integration of informal modes of transport with the formal public transport is crucial to address the mobility needs of the people

Page 7: Session 3.2 – Formalizing Informal Transport

Overview of IPT Sector

IPTSector

Stake Holders &

Beneficiaries

Infrastructure

Operation &

Finances

Vehicles

Regulations

Enforcement

Bus stops repair

facilities

FareCapital Cost

O & MRidershipRevenueVehicle

UtilizationManufacturers

ModelsPermit

MaintenanceFitness

CertificatePUC

Routes/PermitsVehicles

FaresSchedules

InfrastructureQuality of Service

Traffic Police

Dealers

Insurance Company

Route President

Union/Association of Owners

Transit Agency

Traffic Police

Finance Companies

Middle Men

Users

Conductors

Drivers

Operators / Owners

RTO

Self Driven

Hired Drivers

Salaried

Contract (Fixed amount to be paid to owner )

Routes PermitsDriving-License

Page 8: Session 3.2 – Formalizing Informal Transport

Supply and Operational Characteristics

Page 9: Session 3.2 – Formalizing Informal Transport

RTO prescribes the route and the number of vehicles

The methodology is unscientific and adhoc

There are no periodic revisions to the routes or to the number of vehicles that ply on the routes

In many cities no new permits have been issued for a number of years leading to emergence of grey market

Routes

Page 10: Session 3.2 – Formalizing Informal Transport

MinibusesThere are different types of minibuses, with capacity of 17- 28 seats

Major manufacturers of the vehicle are

Tata Motors

Eicher

Swaraj Mazda

Average age of minibuses is around 10 years, with a vehicle life of 15 years

These vehicles are poorly maintained

Vehicles

Page 11: Session 3.2 – Formalizing Informal Transport

Tata Magic

Official seating capacity of 7 passengers

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

The capital cost of a new Tata Magic vehicle is around Rs. 375,000/-

Vehicles

Page 12: Session 3.2 – Formalizing Informal Transport

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

The actual fares charged depends on each individual conductor.

Tata Magic: Fares lower than minibuses and standard buses, to attract passengers to their service.

Fares

Page 13: Session 3.2 – Formalizing Informal Transport

RTO doesn’t prescribe schedules

The schedules are decided by the operators themselves through the mechanism of

Owners Association

Route President

Route Managers

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

Schedules

Page 14: Session 3.2 – Formalizing Informal Transport

No designated stops for either Tata Magic or minibuses

No depots, parking spaces

No designated maintenance, washing and repair facilities

Infrastructure

Page 15: Session 3.2 – Formalizing Informal Transport

There are two models in minibus operations

Owner drives the vehicle (owner-driver)

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

Each Minibus operates 150-180km/day

Economics-Minibus

Page 16: Session 3.2 – Formalizing Informal Transport

Given each minibus operates 150-180km/day

Net Revenue/day(owner-driver) Rs 600-700

Net Revenue/day(Renter-Driver) Rs 500-550

Economics-Minibus

 

Owner-driver Renter-driver

Total cost/km 16-18 17-19

Revenue/km 18-21 18-21

Net Revenue/km 2-3 1-2

Page 17: Session 3.2 – Formalizing Informal Transport

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)

Each vehicle operates 120-150 km/day

Economics- Tata Magic

Page 18: Session 3.2 – Formalizing Informal Transport

Given each vehicle operates 120-150km/day Net Revenue/day(owner-driver) Rs 400-450 Net Revenue/day(Renter-Driver) Rs 350-400

Economics- Tata Magic

 Cost

Owner-driver

Renter-driver

Total cost/km 7-8 8-9

Revenue/km 10-11 10-11

Net Revenue/km 2-3 1.5-2.5

Page 19: Session 3.2 – Formalizing Informal Transport

The economics of IPT modes is similarThe capital cost of Tata Magic is nearly a third of the Minibus, therefore minibuses are facing stiff competition from them

Economics- Formal PT Vs IPT

ModesFormal Bus Minibus Tata MagicDaily ridership/vehicle

Net (Profit/loss)/km

Daily ridership/ vehicle

Net Profit/km

Daily ridership/ vehicle

Net Profit/km

500-800 Predominantly loss making

300-350 Rs 1-3 250-300 Rs 2-3

Page 20: Session 3.2 – Formalizing Informal Transport

Institutional Setup

• Minibus owners association

• Tata Magic owners Association

• Financers

Traffic Police

RTO

IPT Operations

(Traffic Police/ Enforcement

Agency) Middlemen

( Regulation, Licensing,Permits and Routes,

fares)

Institutional Setup for Public Transport

• Urban Development Department

• State PWD

• Transit Agency

• RTO• Traffic Police

• Public Works Department

• Development Authority

• Municipal Corporation

(Urban Planning)

(Transport Planning)(Building and Maintenance

of Roads)

State Level Agency Local level Agency( ) Function performed by the agency

Page 21: Session 3.2 – Formalizing Informal Transport

Stakeholder Profile

Private Sector

Owners

Owner's Associations

Drivers/ conductors

Financiers

Middlemen/agents

Vehicle Manufacturers

Public Sector

RTO

Traffic Police

Transit Agency

Page 22: Session 3.2 – Formalizing Informal Transport

Private Sector Stakeholders

Page 23: Session 3.2 – Formalizing Informal Transport

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. Owners

Page 24: Session 3.2 – Formalizing Informal Transport

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 10-20/vehicle /day to the route manager by the owners

2.Owners’ Association

Page 25: Session 3.2 – Formalizing Informal Transport

3. Drivers-Personal InformationAge Profile of Drivers

41% of the drivers are in the age group of 30-40

years.

Educational Qualification

60 % of drivers are educated till 8 th standard

Migrants Vs. Locals Work Experience

upto10 yrs 55-60%20% of drivers are migrants

25%

41%

24%

10%

20-30

30-40

40-50

50-60

25%

60%

15%

Illiterate

Till 8th Standard

12th Standard

80%

20%Local

Migrant

Page 26: Session 3.2 – Formalizing Informal Transport

3. Drivers-Personal Information

Monthly Earning Monthly Savings

Low standard of living

58%

42%10000-15000

5000-10000

59%

38%

3%

0-1000

1000-2000

2000-3000

Page 27: Session 3.2 – Formalizing Informal Transport

4.Conductors- Personal InformationAge Profile of Conductors

55% of the conductors are less than 35 years of age.

Educational Qualification

73% of conductors are educated till 8 th standard

Migrants Vs. Locals

18% of conductors are Migrants

Work Experience

upto10 yrs 75-80%

26%

55%

19%18-25

25-35

35-45

2%

73%

25% Illiterate

Till 8th Standard

12th Standard

82%

18%

Local

Migrant

Page 28: Session 3.2 – Formalizing Informal Transport

4.Conductors- Operation Details

Passengers/Day/Minibus

Revenue/Day/Minibus Trips/Day/Minibus

15%

76%

9%

1-2 round trips

2-3 round trips

3-4 round trips

3%

60%

37% 150-250

250-350

350-450

23%

69%

8%

2000-2500

2500-3000

3000-3500

Average daily earnings –

Rs 3500-4000

Page 29: Session 3.2 – Formalizing Informal Transport

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

Major Finance Companies are• Tata Finance • Shriram Transport Finance • Shakti Finance

Tata Magic vehicles cost around Rs. 3,75,000 for a new vehicle

Financed at 11.5% rate of interest for a term of 5 to 7 years.

5.Finance Companies

Page 30: Session 3.2 – Formalizing Informal Transport

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)

Tenure of Loan (Yrs)

Rate of Interest EMI/Rs 100,000

3 12% Rs 3500

5 12% Rs 2300

Tenure of Loan (Yrs)

Rate of Interest EMI/Rs 100,000

3 13% Rs 3550

5 13% Rs 2350

Page 31: Session 3.2 – Formalizing Informal Transport

Middlemen have permeated the entire system

Driving License

Fitness

Permits for vehicles

6. Middle Men (Agents)

Page 32: Session 3.2 – Formalizing Informal Transport

Public Sector Stakeholders

Page 33: Session 3.2 – Formalizing Informal Transport

Authority which decides routes to be operated on basis of surveys (ad hoc)

Issues permits (capped) on submission of

1.RTO

Permit fees along with documents

Tax Report

Colour Report

Speed Governor Report

Page 34: Session 3.2 – Formalizing Informal Transport

Enforcement of rules and regulationsEnforcement of

2.Traffic Police

Validity of drivers

Validity of permits

Valid vehicle registration and certifications( fitness & PUC)

Checks on illegal parking

Checks on vehicles stopping at designated stops for pick-up/drop-off

Checks to prevent overloading of vehicles

Page 35: Session 3.2 – Formalizing Informal Transport

Regulation and Enforcement

Parameters Regulation Enforcement

Routes/Permits

Routes/Permits Vehicles & Fares

are regulated by RTO but the rest of the parameters are largely unregulated

Enforcement is largely lacking in all aspects

Vehicles

Fares

Schedule

Infrastructure

Quality of Service

Page 36: Session 3.2 – Formalizing Informal Transport

Demand Characteristics

In most small and medium sized cities,IPT (Tata Magic+ Minibuses) caters to 65% of total PT ridership

65%

35%IPTFormal Bus Transport

Page 37: Session 3.2 – Formalizing Informal Transport

User ProfileAge Distribution

Frequency

Purpose 10%

31%

54%

5%

0-20 20-30

30-50 Above 50

65%

12%

17%

6%

Daily

Weekly

Monthly

Occasionally

40%

30%

18%

5%7%

Work

Education

Social

Recreation

Health

85% of passengers lie in the age group of 20-50 years

65% of the users are daily users of the system

70% of trips are predominantly performed for Work &

Education

Page 38: Session 3.2 – Formalizing Informal Transport

Trip Length Frequency Distribution

Average Trip length = 5-6Km

Page 39: Session 3.2 – Formalizing Informal Transport

User Perception-Issues

1%

23%

57%

17%

2%

Don’t follow rules & regulations

No stadard Fares

Unreliable (Frequency)

Over Crowded

Poor Maintenance

Minibus services are Unreliable

Page 40: Session 3.2 – Formalizing Informal Transport

Key Challenges facing IPT System

Page 41: Session 3.2 – Formalizing Informal Transport

Tata Magic, minibuses and standard buses compete with each other

Do not operate in integrated/complementary manner

Minibus ridership declining due to

Shift of passengers to Tata Magic

Lower capital cost of Tata Magic

Ease of operations

Lack of Integrated System

Page 42: Session 3.2 – Formalizing Informal Transport

Low fares & need to maximize revenues per trip lead operators to overload their vehicles beyond their official seating capacity, leading to overcrowding

Operators focus on providing service mainly during peak periods to maximize revenue, resulting in unreliable services during off-peak periods, which have lower demand

Poor Quality of Service

59%21%

17%

2% 1%

Not reliable in timings

No standard fares and no fare chart provided

Over crowded

Poor condition and maintenance of buses and bus stops

Lack of adherence to rules and regulations

Page 43: Session 3.2 – Formalizing Informal Transport

Long working hours (typically 12-14 hours per day) and generate low net earnings. Majority of the minibus drivers (60%) earn in the range of Rs. 9,000 – 15,000 per month, while 45% are reported to earn Rs. 4,500 – 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

Challenges faced by Operators

Page 44: Session 3.2 – Formalizing Informal Transport

Roadmap for Public Transport and IPT Reforms

Page 45: Session 3.2 – Formalizing Informal Transport

Current level of Motorized Trips

Atleast 50% of Motorized Trips

Public Transport Vision

Page 46: Session 3.2 – Formalizing Informal Transport

Vision for Integrated Bus Transport

Reliability /accessibilit

y /frequency

Affordability

Reliability /accessibilit

y /frequency

Safety/Comfort

Standard Bus

Service

Minibus

Tata Magic

Integrated bus system

with enhanced capacity

efficiency and integrated operations

Page 47: Session 3.2 – Formalizing Informal Transport

Broad Framework for Reforms

Institutional Capacity(Planning , technical , Coordination)

Institutional Capacity (Contracts & PPPs)

Subsidies

Buses

Land

Integrated operations & BRT

Cu

rren

t P

ub

lic T

ran

sp

ort

S

yste

m

Pu

blic T

ran

sp

ort

Syste

m t

o

meet

futu

re d

em

an

d

Page 48: Session 3.2 – Formalizing Informal Transport

Key Enablers for PT Reforms

Bus agency capacity

Planning

Technical

Monitoring and

evaluation

Trained drivers/mec

hanics

Contracts

City/state government

Funds for capex

Operating subsidies

Land

Operators

Access to finance

Integration into formal bus system

Training

Losers (hidden beneficiaries)

Addressing their

concerns

Page 49: Session 3.2 – Formalizing Informal Transport

Thank you!

[email protected]