Sharing Economy in Transport: Adapting & Excelling International Car Sharing Model in India
According to an October 2015 report by NASSCOM and Earnest & Young, the growth of this sector is marked from the fact the global sharing economy is forecasted to grow at a CAGR of 139.4 per cent to reach USD 115 billion by 2016 from USD 3.5 billion in 2012.
The Indian automobile industry is currently witnessing a new trend in the market that is proving to be the next big thing in urban mobility. The car sharing and/or car rental services segment is showing signs of growth owing to a rising demand among the on the go millennial population, who are looking for a cheaper alternative to purchasing one’s own car. The latest sharing economy within this segment has enabled many players to come forward with their own services to cater to this rising demand.
Advantages of sharing economy in Transportation
According to an October 2015 report by NASSCOM and Earnest & Young, the growth of this sector is marked from the fact the global sharing economy is forecasted to grow at a CAGR of 139.4 per cent to reach USD 115 billion by 2016 from USD 3.5 billion in 2012. The report also specified that a sharing economy can also change other aspects of the transportation market. In India, emerging carpooling/car sharing platforms have proven to be reliable alternatives to both car ownership and car rentals by offering convenience and flexibility to customers, who are seeking such services to make their lives easier.
While the concept of car sharing has been around for years in several western countries, it is only now that this collaborative consumption model is evolving in the Indian market. Some key benefits of shared economy are: Resource utilization, Job creation, Social mobility, Skill development, Convenience, Transparency & Accountability, Digital literacy, and Improvement in Environment & Infrastructure.
In the past couple of years, a new culture in urban mobility has emerged in an effort to supply integrated and sustainable transport planning for better transport management in the Indian subcontinent, viz. car sharing model.
Growing need of better Urban Mobility
According to July 2015 analysis by Research and Markets – World’s largest market research source, the car sharing market in the Asia Pacific (APAC) region is touted to grow at a CAGR of 39.06 per cent over the period of 2014 – 2019. The report also stated that the growing number of megacities in emerging economies is one of the biggest factors that is directly affecting the car-sharing market. Since both India and China are steering the growth of car sharing segment in the APAC region, the report has shown some vital facts that can help us in determining its future in the Indian subcontinent.
As mentioned in the report, Shanghai and Beijing have been the fastest growing megacities in China over the past decade. Likewise, India plans to develop five megacities in Gujarat, Maharashtra, Haryana, and Madhya Pradesh soon. The major reason for developing these regions is attributed to the rapidly rising population and growing proportion of urban residents, which is leading to a shortage of parking spaces, and related issues. Thus, these factors are projected to be the main reason for decline in car ownership in India, and as a result, are contributing to the imminent growth of the car sharing market in the country.
Advent of car sharing / carpooling services in India – Indian Youth’s Top Choice in sustainable mobility
In recent times, car sharing / carpooling services in the urban mobility space has given the Indian youth with a unique ecosystem that provides effective alternate solutions to attract drivers, passengers, as well as pedestrians to adopt more responsible mobility. However, this segment began showing its true potential following the realization of the urban Indian youth that car sharing was a relatively cheaper alternative to owning a car.
Witnessing this gradual shift towards car sharing, various technology enabled On-demand aggregators have begun to disrupt the market with a mutual objective of facilitating hassle free commuting / travelling options for people from all walks of life.
However, this segment is currently facing certain issues that have slowed its progress in the country. As stated in the APAC report, the major reason for slow adoption of ride sharing services in emerging economies like India is lack of awareness about this market. Moreover, the cultural difference between India and her western counterparts makes it even more difficult for people to adapt car sharing models effectively. Trust issues and security concerns about one’s personal vehicle are some of the main reasons why most Indian people tend to think twice before opting for car sharing services.
Nevertheless, despite such challenges, car sharing services are slowly but steadily, becoming the norm in urban mobility in India as they are cost-effective, and are also helping in reducing the level of pollution in most cities to a certain level.
As the youngest nation in the world in terms of its growing youth population, India certainly has a huge market for car sharing services as the millennial generation is more open to new concepts and developments, unlike their older counterparts; and so, are the prime target of on-demand aggregators who are developing their services to cater for the former’s demand for sustainable commuting facilities. While it is too soon to determine the success rate of adoption & implementation of car sharing model in India, it can be safely assumed that this market is poised to attain greater growth in future – mutually benefitting both the society as well as the environment.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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