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Challenges Of Being A Startup In The Personal Transport Space

Challenges Of Being A Startup In The Personal Transport Space

In the Indian startup ecosystem, though it might not be as much popular or stealing the limelight kind of scenario like for example, edtech or fashion and lifestyle ecommerce, the urban road transportation business is making its presence felt very strongly in the recent times. The number of startups that has cropped up in the transportation space bears a solid testimony to this fact.

No matter, which city in India you live in, you know you are not immune from inherent road transport, pollution and traffic woes. In fact, many of us have come to accept such challenges as just a way of life.

Some specific pain areas in the transportation domain that startups are trying to solve, includes – the safety and security of commuters, reducing road congestion levels and optimising utilisation of transportation resources. Many startups are also looking to help the Government of India in building up the right kind of infrastructure for its smart cities transportation project.

Public Transport, Policy Changes – Roadblocks

If we pay a cursory glance at the country’s public transportation infrastructure, we will see how immensely chaotic it is, where public taxis, trains and metros operating well beyond their capacity. Moreover, the state-controlled mass transit systems are failing to keep up with the humongous number of people and the number of private operators are also inadequate.

Apart from these roadblocks, outdated regulatory policy frameworks are stopping several private players to bring forth much change. The good news is that – this situation is changing, albeit slowly.

The trend of Private car ownership and car sharing is exploding by leaps and bounds. Delhi’s Odd-Even rule, launched by the State Government to bring a check on the city’s hazardous pollution levels, was seemingly successful. Customers today are aware and discerning which is reflected in the trend. The number of startups emerging in the transportation space prove just how massive the demand and supply gap really is.

Challenges Faced By Cab Aggregators

The support meted out by the local administration and the initiatives such as Car-Free Day have a two-pronged benefit – one in terms of organised online system and the second in terms of last-mile connectivity in places where state provided transport systems are inadequate.

Furthermore, there are a lot of loopholes when it comes to policy issues and rules and regulations and a service in transportation needs support from the Government to sustain and mitigate the same. These regulatory gaps have also made venture capitalists and angel investors wary. Though investors are largely optimistic about the market on the whole, as is evident from the number of investments flowing into the sector, they are very cautious.

Another issue is that of cost-optimisation, especially in regions such as the Delhi NCR. Many of the shuttle services making rounds in the city are operating at direly low utilisation rates- as low as 15% on some days.

As per entrepreneurs and investors, there is an urgency for such companies to better integrate technology so that the utilisation rates can go up and cost per trip can come down. This, in turn, will make the business more sustainable in the long run.

Public Commuting, Employee Transport – New Areas Of Interest

Daily commuting and employee transportation are two areas that are offering a plethora of scope to newbie entrepreneurs in the space. Whether it be taxi aggregators, employee transportation fleet management companies, self-drive cars or car sharing, there is a place or everybody in the space

While historically, car ownership has been an emotional aspect where people used to save up money and buy a personal vehicle of their choice – which now is changing. People are opting for other options, mostly perturbed by the traffic and road congestion woes.

Experts in the space contends that startups in this domain can work at the ‘hyperlocal’ level and can leverage changing technology at a pace that is challenging for government to do. These private players, instead of competing with public transportation systems should work alongside them as a part of integrated transport system.

Disruptive businesses are emerging in the transportation space. Most dominant among these are mobility-on-demand, commuter experience, product innovation and connected mobility.

[The author of this post is Ashok Vashisht, the founder and CEO of Aaveg – an end to end mobility provider.] 

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.