The Next Frontier Of Technology – Mobility

Shailesh Gupta Mar 15, 2021

Mobility as a sector comprises intracity and intercity. In Intracity, there are many branded players such as Ola, Uber, Rapido, Shuttle, etc (operating on an attached cum owned model), metros in major cities such as Delhi, government buses, autos, and rickshaws, etc. However, in intercity, there are typically three major means of travel - buses, trains, and flights.

India is steadily getting urbanized and the domestic intercity travel market, valued at $49 Bn in FY 2019 growing at 8.2% CAGR is poised to reach $84 Bn in FY by 2025. However, the expansion in intercity travel is severely under-served by trains (4% CAGR while 86% of the trains are overbooked for the next 10 days) and flights (80% of flight capacity serves only the top 6 metros). On contrary, rapid growth in road infrastructure (National Highways have grown at 21.44% CAGR in between 2016-2019) has connected 5000+ previously obscured pin codes and resulted in more than 1,000 intercity routes which have similar travel time as compared to trains.

In India, there are 46 cities with a 1Mn+ population that act as the hub for over 300+ smaller towns with a 100k+ population size. Out of the 50+ Mn people that travel intercity on a daily basis, nearly 20+ Mn people travel by trains and roughly 30+ Mn people travel by buses. Over 60% of this bus-carried traffic moves across the dense network of the 50+ cities consisting of all major hubs.

Over short and medium-haul distances (200-600 Km.), buses have several structural advantages:

Flights are prohibitively expensive and time consuming for short routes
Trains accessibility and availability is a major issue outside Tier-1 cities; tier-II cities often don’t have direct connections
Bus transport is usually amenable to higher flexibility over trains and flights owing to its modular structure (less constraints as compared to trains and flights).

Despite the massive underlying opportunity, India's bus services have largely remained archaic due to three major reasons - high fragmentation of bus operators (2,500+ active bus operators and 25+ state-owned road transport corporations) that has led to localization of supply, lack of customer centricity as most operators have little incentive to deliver superior service excellence, and slow adoption of technology that is critical to customer experience and operational efficiency. Furthermore, local operators have shied away from investing in training and building standardized processes that promise the customer timeliness, comfort, and safety.

The new-age, digitally savvy Indian commuter, however, has a fast-rising disposable income albeit COVID headwinds and has been made used to the expectation of a professional experience in almost all spheres of activities be it food delivery, e-commerce, or travel and transportation.

That there is a clear need for a trusted, reliable, and safe pan-India brand in the intercity bus segment is now anybody’s guess and if we connect the dots, it’s easy to see why this is a massive opportunity for bus travel operators.