By Ashish Kapur
In a continued push towards going electric, the Government of the National Capital Territory (GNCT) of Delhi has introduced in the public domain a draft aggregator policy. This is the 6th draft and has been arrived at after much consultations and inputs from stakeholders. The central tenet of this draft policy is guidelines aimed at promoting the adoption of electric vehicles (EVs) in the transport, delivery, and e-commerce sectors.
Though not yet implemented, the draft notification is aggressive in its intent for electrification for all categories of aggregator vehicles plying in the NCT. Interestingly, while 3- and 4-wheelers have been given some time to transition to an all-EV fleet model, bike taxis (2-wheelers) have inexplicably been asked to transition to an all-EV eco-system from the very outset. There can be no quarrel with the underlying objectives that this draft notification wishes to serve: reduction of traffic and urban congestion, sustainable mobility, last-mile connectivity, and consumer convenience, all laudable objectives. However, given the nascent stage of the evolution of the EV eco-system, the question still remains whether this has been thought through for all its repercussions, triggering a debate on the implications and its impact on mobility, convenience and economic livelihoods of the entire gig economy.
The Human impact: A deeper look
The electrification mandates, though seemingly noble, risk having a human cost that goes beyond statistics. Bike-taxi aggregators, a lifeline for the gig economy and last-mile connectivity, stand to bear the brunt of these mandates. They serve as the backbone of the ride-sharing economy, e-commerce, and delivery services, also contributing significantly to local employment and individual incomes. The draft notification’s aggressive approach threatens the livelihoods of those who rely on these services for their daily sustenance. Consider this: Roughly 11 lakh trips are made weekly in the Delhi NCR region. This provides a sense of the scale involved. The gig economy, characterised by its flexibility and accessibility, caters to a diverse spectrum of society, including students, part-time workers, those seeking supplemental income, and lower-income individuals who earn a living through various means such as bike taxis. The aggressive demands for EV adoption overlook the financial constraints faced by these individuals, making the transition unfeasible and potentially leaving them out of work.
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Additionally, one of the paramount concerns stemming from the electrification mandates in the capital is the potential disruption to consumer convenience and mobility. The draft scheme’s aggressive timeline to transition to EVs, risks disrupting the rhythm and momentum of daily life for thousands of Delhi’s residents. The current transportation ecosystem, largely reliant on traditional internal combustion engine (ICE) vehicles, is deeply ingrained in the daily routines of millions of commuters. Moreover, bike-taxi aggregators play a crucial role in Delhi’s transportation landscape, offering multi-modal convenience and bridging the gap of last-mile connectivity. They serve as a lifeline for individuals looking to move swiftly through congested urban areas, effectively addressing the challenge of urban congestion. The scheme’s mandates could inadvertently undermine this convenience, essentially disrupting the accessible, economical, and convenient transportation option that many Delhiites have come to heavily rely on.
Challenges on the EV runway
The transition to EVs, though well-intentioned, has yet to achieve the same level of cost, accessibility, and convenience as their fossil-fuelled counterparts. One of the most significant hurdles is the inadequate supply of EVs in Delhi, particularly in the 2-wheeler and 4-wheeler segments. Consider this. Just about 0.74 percent of all 2-wheelers in the NCT are electric and a mere 0.16 percent of total vehicles are EVs. Given this rather stark backdrop, the electrification targets set by the scheme seem ambitious, if not impractical particularly considering the fact that the policy expectation is that EV sales will somehow shoot up to 2x or even 3x in the near future. With EV demand still not a mass market, price points are yet not affordable to spur demand on its own- a chicken and egg situation.
The other critical constraint is the lack of maturity of the EV ecosystem in this region. Range anxiety, a valid and persistent concern, adds to the complexities of EV adoption, particularly in a city where charging infrastructure remains underdeveloped and unreliable. There are current challenges that lead to charging downtime going up, limited charging options besides the fact that adequate range is not quite available for a bike taxi today. Then, there is the question of economic viability as well. The higher costs associated with EVs compared to their ICE counterparts are a deterrent for many drivers, especially those in the gig economy who operate on a hand-to-mouth basis and earn meagre incomes. The disparity in cost further deepens when considering the performance of EVs over time, with challenges like limited charging stations and the gradual dropping of battery performance. Legacy ICE players and some commentators believe EV-ICE cost parity is still a long way off. While the jury is still out on that one, for those drivers who make their livelihoods on the roads, such barriers are critical concerns.
Defeats the underlying objective of the Gatishakti scheme
A key public policy objective of the Government of India is multimodal integrated transport connectivity. The Gatishakti scheme brought in by the Union Government envisages precisely this- integrated planning and coordinated implementation of infrastructure projects in the country with the ultimate objective of improving connectivity and thereby enhancing the country’s business competitiveness. Urban mobility is a key element of this piece and the gig economy which includes among others the e-commerce sector, the food delivery sector as also the ride-hailing sector is an important marker in the evolution of urban connectivity in the country. This also has attendant implications on urban decongestion through last-mile linkages. Bike taxis play a critical role in this process.
An adverse notification, if impractical in its sweep and unrealistic in its ask, inherently brings the potential to undermine consumer convenience and urban decongestion plans. The apprehension is that, if the proposed notification is ratified as a binding legal directive by the GNCT, it could very likely trigger a supply choke or even a partial disruption in the demand-supply equilibrium. Such a situation would substantially constrain the app-based economy, thus defeating the core principle on which the Gatishakti is premised.
The way forward
The city-state and its policymakers would do well to relook at the aggressive electrification mandates, especially in the light of a nascent EV system, and allow for smoother transitioning from the ICE economy through realistic sunset clauses to allow for the EV eco-system to mature. Besides, it’s imperative that more extensive deliberations are held with the industry to arrive at EV targets by consensus, which will have a greater buy-in by key players. The EV targets themselves should be in consonance with the availability of vehicles and supporting infrastructure.
Adopting a consultative stance could facilitate Delhi’s positioning as a progressive capital, characterised by a pragmatic aggregator policy that prioritises the convenience of its citizens while balancing industry interests with broader economic considerations.
This could then be a template for the rest of the country to follow.
(The author is CEO, Investshoppe. Views expressed are personal and not necessarily that of financialexpress.com)
