Ride-hailing apps have provided Indian urban consumers with a convenient, hassle free, and accessible option for their commute. These vehicles represent a significant share of traffic in cities, but their projected growth presents a deeper complication of rising urban air pollution.
Fortunately, EVs have emerged as a viable alternative solution in ride-hailing services, and their benefits – environmental, financial and energy security – have shaped consensus among mobility stakeholders in India, for the need to transition. Based on an analysis of India’s EV value chain, WBCSD has identified ride-hailing as a scalable use case for EV adoption. This article looks at a few reasons why ride-hailing has the potential to lead the electric mobility transition in India.
- App-based ride hailing services is a large market and can create significant impact: Ride-hailing is evolving as a preferred form of commute in Indian cities. It is projected to grow at a CAGR of 19.1 per cent, and achieve a turnover of USD $ 52.5 billion by 2024. As per WBCSD’s analysis, a 100 per cent adoption of electric ride-hailing cars in India by 2030 would avoid 51 per cent of the CO2 emissions caused by their internal combustion engine (ICE) counterparts.
- Higher utilization levels in ride-hailing makes EV adoption economically viable: The upfront cost of EVs are higher than ICE vehicles, i.e., 30 per cent more expensive for cars. However, due to their lower running cost, most EVs are already economically viable. They are at par with their ICE counterpart in terms of Total Cost of Ownership (TCO), if the daily utilization is high enough, i.e., above 100 km for both two and three wheelers, and above 200 km for cars.
- Ride-hailing EVs should be ahead in adoption priority compared to personal EVs: Electrification strategies should be focused on increasing the proportion of kms travelled in EVs than increasing the number of EVs on road. Ride-hailing cars typically travel more than 50,000 km a year, compared to 12,000 km per year for personal cars. Thus, electrification of a ride-hailing car offers more than four times the environmental benefits compared to a private vehicle.
- Recent policy advancements in favour of fleet EVs offers new market opportunities: Policy efforts at both, the national and state levels, to support electrification of electric ride-hailing fleets have intensified in the recent past — recognition of battery swapping as another form of charging EVs, registration and sale of electric two-wheelers (2Ws) and three-wheelers (3Ws) without batteries, and preferential treatment through legalisation of electric two-wheeler taxis in some states. These policy advancements extend new opportunities for ride-hailing companies to capture economically viable options, and take advantage of the developments, especially for 2W and 3W vehicle segments.
- Ride-hailing EVs can set the ball rolling for personal EV adoption: Integration of EVs in ride-hailing operations is a progressive way to catalyse uptake, and substantially enhance public awareness of the technology, which can encourage personal adoption.
- Several forward-looking ride-hailing businesses have adopted EVs already: The application and scale of EVs is not limited to government fleets or e-rickshaws, as it was a few years ago. The technology now finds its place across various vehicle segments and use-cases, including ride-hailing. Numerous promising start-ups and pilot projects have deployed electrified ride-hailing services such as BluSmart (4Ws), Smart-e (3Ws), and Bounce (2Ws), and having tested the waters, corroborates the business viability argument for EVs.
The ride-hailing boom and acceleration of electrification efforts are among some of the key transitions that have occurred in the Indian urban mobility space in the past decade. As we enter the next decade, it is time that the convergence of these two transitions must happen.
WBCSD’s most recent report documents India’s EV implementation experience of first all-electric car ride-hailing company, and outlines practical steps for businesses to adopt and scale electric fleets.
It is highly unlikely that a single stakeholder, business model or city pilot breakthrough will bring about this transformation. Extensive collaboration with various stakeholders will be required to create impact at scale.