One of the most popular and readily available means of local transport in Indian cities is the 3-wheeler auto rickshaw. There is a strong pulse that connects the people of India with their favourite yellow 3-wheeled automobile. Besides, the humble 3-wheeled automobile is also being discussed in global forums as a possible option for sustainable transport.
The rapid growth in the 3-wheeler auto rickshaw segment can be attributed to increasing consumer needs, digitisation and innovative business models. The launch of services such as Ola, Uber, Rapido Auto, etc has further streamlined and digitised access to the country’s most ubiquitous mode of transport and significantly impacted the lives of customers and driver-partners.
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In this context, it is important to note that 3-wheeler auto rickshaws function as a catalyst and present themselves as a viable and efficient option to support the delivery of goods that weigh between 20 and 250 kg. The move will specifically benefit goods that cannot be moved on a 2-wheeler bike and are not cost-efficient for 3-wheeler cargo vehicles, given that the 3-wheeler cargo caters to a higher weight segment (ie, up to 500 kg).
As mentioned above, 3-wheeler cargo vehicles can carry goods up to 500 kg in weight, but, as there is no vehicle catering to the market in the 20-250 kg weight segment, the masses end up utilising 3-wheeler cargo vehicles. This is not efficient at all. The 20-250 kg weight segment can be served by 3-wheeler auto rickshaws efficiently, effectively and economically.
In India, because of government regulations and guidelines, 3-wheeler auto rickshaws are not licensed to have dual usage of passenger movement as well as goods transportation. This has created inefficiency in the market, where people are utilising 3-wheeler cargo vehicles to address the 20-250 kg segment, which is not cost-effective at all.
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As a majority of people are utilising the ‘3-wheeler cargo vehicle’ to address the 20-500 kgs segment, we need to understand if 3-wheeler auto rickshaws can support this gap. To do this, we compared the prices of ‘3-wheeler auto rickshaws’ and ‘3-wheeler cargo vehicles’ across different areas in Delhi during different times of the day and in different distance brackets.
From the above table, it is evident that 3-wheeler auto rickshaws are more economical and more reasonable for people to afford. The lower cost of utilising an auto rickshaw for movement across different distances at different times of the day makes it a suitable option for both, passenger services and the movement of goods. This ‘dual usage’ of a 3-wheeler auto rickshaw will solve a major logistics burden, helping businesses including MSMEs and the general population at the same time by creating a new category of vehicle for the movement of goods in the 20-250 kg segment.
Another important factor to consider is that, currently, the majority of 3-wheeler auto rickshaws are underutilised, and thus, their earning capabilities are very limited. If dual licensing is allowed, then 3-wheeler auto rickshaws can cater to passenger services as well as the movement of goods. Based on Porter’s limited survey, this can lead to the 3-wheeler auto rickshaws utilisation to go up by ~35% to 60% and the net earnings to go up by ~Rs 250 to Rs 400 per day. Subsequently, the number of trips of a 3-wheeler auto rickshaw will increase from the present 6-7 rides in a day, which will immensely contribute to a higher income potential for drivers while also catering to the need of the general population and the logistics market. Moreover, as the accessibility of logistics improves, there is a probability of the cost to reduce by 40-50%.
The intracity logistics market stands at around USD 40 billion, with multiple utilities and efficiency gaps. It is thereby pivotal for all agencies and stakeholders to look for an option that is suitable to move goods between 20-250 kg. Opting for 3-wheeler auto rickshaws seems to be the perfect fit for not just maximising efficiency, but also improving the lives of the many drivers associated with it.