Frequent cancellation of rides by Ola and Uber drivers is among the most frustrating experiences for average office goers in the metro cities. There might be a less fussy option around the bend– electric cabs. Moneycontrol spoke to electric cab operators to learn more about their modus operandi and the challenges they face.
Cab companies BluSmart, Quick Ride, Envi, and Shoffr, among others, have lower operational costs than traditional fuel-dependent operators. They typically lease electric vehicles and hire drivers to operate them.
Unlike Ola and Uber, where drivers often own the cars, EVs are highly expensive and not owned by the drivers. This frees the drivers from financial liability and gives them access to a steady income. In turn, customers are assured of cabs that don't cancel on them at the last minute, and the city is spared of vehicular carbon emissions.
Shaik Salauddin, national general secretary of the Indian Federation of App-based Transport Workers (IFAT), said, “Fuel/CNG prices are soaring but companies tend to fix fares that are cheaper than autorickshaws. In summer, customers insist on turning on the AC. Also, to pick-up a customer, a driver may have to drive an average of 4 km and that cost is also borne by the driver.”
"When drivers are delayed because of traffic, customers cancel rides, which also impacts drivers adversely," he said. During rain and times of heavy traffic, drivers tend to cancel rides because of lack of additional incentives" he said.
Salauddin said drivers are often forced to cancel because fares don't even cover diesel costs. He indicated that with EVs, things would be different.
"Things will get better if there are electric cabs. Of course, individual drivers cannot afford to purchase them. Operational cost is less for electric cabs. At least the government should provide subsidies for cab drivers so they don't have to cancel rides," he said.
Many environment-conscious commuters are switching to EV cabs. However, the major challenge for all-electric cab companies is the shortage of vehicles and the resultant difficulty in catering to growing demand. Still, many customers prefer electric cabs because once a booking is accepted, the chances of cancellation for flimsy reasons are lower, regular users said.
“It's a matter of sheer luck to get cabs these days. Electric cabs are good as well as environment-friendly and often they accept bookings but their availability is less now. With more car manufacturers launching cheaper electric cars, I'm hoping more drivers switch to EVs so we get assured cabs," said Megha S, a techie who lives in the Hebbal area of Bengaluru.
Also watch: EV Cabs: How They Benefit The Consumer | The Drive Report
Uber and Ola also plan to go electric. Last year, Uber piloted electric cab services in New Delhi. Uber recently signed an agreement with Tata Motors to deploy 25,000 electric cars in New Delhi, Bengaluru, Mumbai, Kolkata, Chennai, Hyderabad and Ahmedabad. Ola said it plans to deploy 10,000 electric cars within a year, after a pilot run in Bengaluru.
Car ownership
BluSmart has more than 3,200 cars operating in Bengaluru and the National Capital Region, which includes New Delhi and the neighbouring areas of Gurgaon, Noida and Ghaziabad. Its drivers don’t have the stress of car ownership, which reduces the chances of trip cancellations.
“The cancellation of rides by drivers is influenced by multiple factors including the ever-increasing fuel prices, drivers’ inclination toward cash payments, the aggregators’ cut, and the increased costs of owning a car,” Anmol Singh Jaggi, cofounder of BluSmart, told Moneycontrol. “BluSmart has a highly differentiated supply-side model. We firmly believe that owning assets is not the core skill set of the driver-partner.”
Also read: BluSmart takes on Uber, Ola, launches cab pickup zone at Bengaluru airport
This is why, he said, it leases electric cars at an institutional level. “Drivers on the platform work flexibly without any stress of asset ownership. It helps them stick to their core skills of driving rather than owning assets. This allows us to serve customers well since drivers cannot do any ride denials. It helps improve overall customer service,” he said.
The big advantage of EVs is lower operating cost.
“Our ecosystem of connected chargers and connected cars, having run more than 165 million km with over 1 million charging transactions, has provided invaluable data to run thousands of experiments for more than four years. Each iteration has helped us improve our technology bit by bit. Knowing how EV and charging technology varies with weather, traffic conditions, age of the vehicle, car variant, and driving behaviour is not something which can be built overnight without the data from the field," said Jaggi.
He suggested the government work with automakers and technology providers to bring down the cost of EVs.
"This could be achieved through initiatives such as research and development grants, extension of production-linked incentive scheme subsidies for electric vehicle manufacturing, and partnerships between automakers and technology companies to drive innovation," he said.
Jaggi said the government could also consider removing road tolls on EVs to encourage intercity travel.
"This will not only promote the use of electric cabs for intercity transport but also make it more economical for drivers and passengers. Further, the government could impose a cess on ICE (internal combustion engine) cabs and use the revenue generated from this cess to fund the expansion of EVs in cities. This would incentivise the adoption of electric cabs while simultaneously discouraging the use of polluting ICE cabs," he said.
Charging stations
Bengaluru-based startup Quick Ride has about 120 electric cabs, which it plans to increase to more than 500 by the end of 2023.
“All electric cabs are owned by us and drivers are paid a fixed salary. They don’t have to choose trips and worry about the earnings. The advantages of EVs are lower running and maintenance costs and carbon footprint," said KNM Rao, founder of Quick Ride.
Rao admitted the high cost of EVs is a major challenge. "Currently, some vehicles are procured by ourselves and some are taken on lease,” said Rao.
On charging infrastructure, he said: “We have built our own charging hubs in the city and near the airport. Infrastructure from Bangalore Electricity Supply Company and other charging businesses is a plus and works as backup.”
He suggested the government take steps to establish battery manufacturing in India, reducing dependency and imports.
“The government should invest and increase availability of public charging stations. Every fuel pump can have a charging facility. Also, the government should build mass multi-level slow charging hubs,” he said.
He said the government now offers subsidies and exemption from road tax. “It can continue the same and can consider relaxing GST for vehicle purchases as well. GST can be exempted on ride fares to encourage customers to prefer electric cab rides, thereby reducing carbon emissions. The government should also take steps to bring down EV costs to equal diesel vehicle costs,” he said.
Airport transfers
Bengaluru-based Shoffr operates an all-electric premium cab fleet focussed on ferrying people from and to the airport.
“We are currently live only in Bengaluru, only for airport transfers (from anywhere in the city to the airport, or from the airport to anywhere in the city),” cofounder Vikas Bardia told Moneycontrol.
He said ownership of assets enables more operational control, which in turn leads to reduced cancellations and improved user experience. "Companies in the four-wheeler EV mobility space have to either own the assets on their books or enter into lease-agreements,” said Bardia.
He said drivers currently aren’t in a position to own electric cars.
“Apart from the higher initial cost, there are other reasons many drivers won’t purchase EVs: low range, low confidence in the long-term reliability of EV cars, distrust in existing players which has resulted in many of them stuck with EMIs, and, of course, the lockdown which severely dented the financial position of many driver-cum-owners,” he said.
He admitted that the dearth of charging infrastructure combined with the low range of most EVs is a deterrent. "The number of charging stations available has increased significantly in the past year and it looks like that trend will only improve. This certainly limits the ability of cars/drivers to do multiple trips, and hence availability. We address this by investing in premium cars with a longer range,” he said.
Loans for drivers
Envi runs more than 100 electric cabs in Bengaluru. Founder N Sanjeev Kumar told Moneycontrol: “EVs are environmentally better, cost effective for companies and for customers. We have an operating model that ensures that trips aren't cancelled for customers.”
Envi also leases its cabs and has signed up with charging point operators.
“When we started in 2020 there was a shortage of charging stations. But we have strategic partnerships with various charging point operators to alleviate the charging issues for our fleet,” said Kumar.
He said the government could help with two things – with loans/discounted loan interest rates for individual drivers who want to buy EVs, and with the addition of more charging hubs.
Taxi drivers said they cannot afford to buy electric cars at present.
"The cost of a regular economy model vehicle is around Rs 8 lakh, but it is Rs 14-15 lakh for an EV, which is not affordable for a single-vehicle owner,” Karnataka State Travel Operators Association president K Radhakrishna Holla said. “For farmers, the government gives subsidies to buy tractors. Similarly, the government should provide low-interest loans to drivers so they can switch to EVs. They could save some money since the operational cost will be less. It will help drivers as well as the environment," said Holla.
Commercial viability
An important consideration when comparing electric cabs and petrol/diesel cabs is operational cost, according to Pawan Mulukutla, director (integrated transport, electric mobility & hydrogen) at WRI India, which works on urban development and climate. For a mid-segment EV like the Tata Nexon, the operational cost is Rs 1.2-2/km. In contrast, the operational cost for petrol/diesel vehicles ranges from Rs 8-10/km.
"Assuming a daily running distance of approximately 70 km, the total cost of ownership for both types of vehicles is almost at cost parity. Interestingly, over a period of five years, the total cost of ownership for an electric vehicle is estimated to be around Rs 28/km, while for a petrol/diesel vehicle it is around Rs 29/km, according to the total cost of ownership calculator," said Mulukutla.
If the cars are used for commercial purposes and the daily distance covered is higher, the cost of ownership for EVs reduces drastically, he said.
The government should provide financial incentives, charging infrastructure, regulatory support, awareness campaigns and training and skill development to promote electric cabs, he added.
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