QR codes, GPS trackers and digital payments. This is could be the future of bus journeys in Indian cities as startups step in to offer contactless solutions to bring public transport system up to speed with the “new normal”.
As India begins to unlock the economy in a staggered manner, resuming public transport is a key challenge. The paper-based ticketing system can make buses a breeding ground for the novel coronavirus. Infection can spread quickly as ticket stubs are handed out and cash is exchanged in crowded buses.
Indian startups are trying to solve this problem by taking the ticketing system digital. Chalo and CityCash along with major players like Paytm are working with several state governments to digitise city-based public transport.
“Our aim is to digitise 100 percent of bus tickets in the country, we are ready to invest in terminals and hardware infrastructure, just need a partnership with state transport corporations,” said Dhruv Chopra, co-founder and chief marketing officer at Chalo.
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Initial success has come mostly from Tier 2 and 3 cities, large cities are still trying to find ways of deploying technology at such scales.
Chalo, which is already at work in 23 cities, is talking to transport authorities in several other cities looking for a digital solution.
The startup offers mobile ticketing, online passes and also allows GPS tracking of buses, reducing the waiting time and increasing efficiency of the system.
It has raised $23 million in equity funding over series A and B rounds from angel investors and institutional players like Waterbridge Ventures.
Mumbai-based CityCash, which is working with Maharashtra State Transport Corporation, is to “very soon” launch bus ticketing with another state corporation, said founder Vineet Toshniwal.
CityCash has raised $2.7 million from Fino PayTech and other investors, Tracxn data shows.
Toshniwal wants to create a single-window payment option, which can start with a bus ticket and can be extended to bring in merchants as well. He wants to create an ecosystem where brands in high-street malls can offer free rides to commuters using CityCash for bus ticket payments against purchases made there.
These ideas are good but implementation remains a challenge.
Public transport is the responsibility of state governments, so accounting norms and ticketing systems vary. Approvals from different departments within these governments also take time, say industry executives. While some are active on the tech front, others tend to be slow to adopt innovation.
Cash and ticket-free solutions have been tried in the country. National Common Mobility Card was launched by the Centre in March 2019 to digitise all forms of transit payments through a single card. National Payments Corporation of India runs this card in partnership with banks and the Centre for Development of Advanced Computing.
Even before the idea of a common card was mooted, multiple banks were trying to digitise travel payments as part of the smart-city projects. Not many of these took off.
Startups are taking one step at a time. Chopra of Chalo said progress was slow but wherever they tried, there were results.
“We have seen a jump in ridership by 20 to 100 percent in cities where we have deployed the solutions. Our aim is to increase ridership that eventually will also help us generate more revenues,” Chopra said.
It has also helped transport corporations reduce both operational and manpower costs. Having started with six cities in 2018, today the startup caters to ticketing requirements of cities like Lucknow, Kolkata, Kochi, Agra and Bhopal.
Toshniwal, on the other hand, is trying to do away with all hardware requirements for bus ticketing. CityCash wants bus corporations to move away from legacy technology to a complete Android smartphone-based model.
“Our systems will have tap-and-go payments. QR code-based scan to pay linked digitally with real-time data tracking at the backend for managers of these corporations to keep track of the performance of these buses and become consumer-centric organisations,” he said.
CityCash is in the final stages of deploying its solution in a city with a population between 25 to 30 lakh by July. Since the deal has not be sealed, Toshniwal did not name the city.
Paytm is also bringing in its QR-code based solution for bus payments. Recently, the company said it can deploy QR codes with the Paytm Soundbox solution for bus ticket payments through Paytm. Every scan on the QR codes will throw up a successful announcement on the soundbox.
The Alibaba and Softbank-backed company has launched a pilot in Chennai with the Metropolitan Transport Corporation. Paytm is also in talks with 20 state transport corporations and has set an aim of 20,000 buses to be digitised in the first phase.
One big problem with digitising bus systems is that it becomes difficult for the elderly, feature-phone users and those who are not tech-savvy to access the system. Also, these systems get overwhelmed when crowds swell up.
Toshniwal said they were also pushing for offline card-based payments system which can be acquired by customers via business correspondents or agents and recharged through cash and online payments. Chalo also has a card-based payments option.
“State governments are looking at means to reduce the cost of operations and increase revenues, move to data-driven organisations-digitization will help in achieving these ends,” he said.