By Sujaya Sanjay
The Delhi Government in May 2023 published the Draft Delhi Motor Vehicle Aggregator and Delivery Service Provider Scheme, 2023 for public consultation. The scheme is aimed at creating a framework for regulating aggregator- and delivery service- operated vehicles inside Delhi. One of the stated objectives of the scheme is to move towards full electrification of all transport modes by aggregators, delivery services, and e-commerce platforms (each engaging 25 vehicles or more) by 1 April 2030. To that end, the scheme envisages a phased conversion to electric vehicle (EV) fleets in the three-wheeler and four-wheeler segment and the two-wheeler delivery service segment within the next five years.
On the whole, the Delhi Government’s mission to curb vehicular pollution is a positive step in the direction of preventing environmental degradation, improving Delhi’s air quality, and eventually, contributing to India’s zero-emission goals. Undoubtedly, Delhi and its residents are being adversely affected by the high levels of pollution and any concrete measures taken by the Delhi Government to improve the air quality of the city must be welcomed. However, this particular scheme might not achieve the desired results for a myriad of reasons, the most crucial being its impact on the lives and livelihoods of gig workers in Delhi.
Most telecom-based aggregators work in a partnership model with individuals – referred to as gig workers – who independently ply cabs or provide delivery services using their personal vehicles. The proliferation of telecom-based app services has given rise to a large, flourishing gig economy, and in a country the size and population of India, provides paid work and steady earnings to millions. According to a 2022 report by NITI Aayog, Delhi alone accounts for approximately 2.2 lakh gig workers.
Those who have their own two-wheelers can participate in the gig economy by registering as delivery service providers or two-wheeler ride services over short distances, generally within city limits. Two-wheelers are more affordable and are therefore widely preferred, sometimes purchased second-hand. However, the new policy, which subjects all aggregators and delivery personnel to a licensing regime, envisages a full transition to EVs within the next five years. This is likely to greatly disrupt the aggregator ecosystem, and not in a good way. According to a large Indian OEM the penetration of 2 EV wheelers in the total vehicle parc is likely to reach 25% by 2030. EVs are significantly more expensive in comparison to fuel-operated vehicles, and the policy does not provide for any kind of financial incentives or subsidies that would enable gig workers to make the transition. An average second-hand two-wheeler (fuel-operated) costs between Rs. 15,000 and Rs. 20,000, whereas an average EV two-wheeler comes in the range of Rs. 70,000 to Rs. 90,000, making it financially unviable for most gig workers. As a result, the fleet electrification policy of the Delhi Government, if implemented in its current form, would likely lead to a loss of livelihood for lakhs of gig workers in the Delhi-NCR region who rely on their two-wheelers and the gig economy to make a living. Even a rental or leasing format is not likely to be feasible, given the demand-supply disparity – EV availability in Delhi today is insufficient in comparison to the number of gig workers who operate two-wheelers.
Aside from affordability (or lack thereof) of EVs, there are multiple other factors that make such an immediate transition unworkable from the perspective of gig workers. Consider the issue of range: on average, gig workers cover a distance of 150-200km each day. Two-wheeler EVs that are available in the market today do not offer more than 60-80km on a single charge and are therefore likely to cause aggregator partners to lose both time and efficiency. This issue is compounded by the lack of charging infrastructure or battery-swapping facilities in Delhi to support such a large fleet of EVs.
When it comes to EV procurement, the ecosystem is still at a nascent stage. The lifespan or utility of an EV is not easily quantifiable at this stage; it is still too early to derive statistics from the sector, which in turn creates uncertainty for the Government when it comes to procurement as even a ballpark of the budgetary requirements cannot be easily determined. And this is not counting the issue of disposal. Delhi does not presently have enough scrapping facilities to efficiently process end-of-life vehicles.
There is the added issue of safety. Incidents of EVs catching fire are being increasingly reported, raising questions about the risks associated with mass fleet electrification. Making two-wheelerEVs mandatory for bike taxi services at this stage when these risks have not yet been satisfactorily addressed, is therefore not a desirable policy. EVs do not yet inspire widespread confidence and trust intheir users. Building an EV ecosystem also requires introduction of basic safety standards around the vehicles, which would then have to be perfected over time before EVs can be made compulsory. The same goes for phased electrification of EVs for delivery services, which envisages an ambitious target in an ecosystem that is yet to be fully functional.
The gig economy itself is currently in a growth phase, with more and more individuals migrating from all over India to big cities like Delhi, which offer them aspirations to make a living through providing delivery or transport services. Gig workers, particularly those operating in the two-wheeler segment, will likely not be able to transition from petrol bikes or scooters to EVs without significant financial incentives and subsidiaries. Moreover, it would be unreasonable to expect citizens, whether cab operators and customers or delivery personnel, to transition overnight to two-wheeler EVs in the absence of supporting charging infrastructure and where there are concerns regarding their safety. The policy of mandating EVs in the two-wheeler segment might need a rethink from these perspectives.
The author of the article is a Senior Manager – Policy, Aakhya India Pvt Ltd.
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