Real-time ridesharing: A saviour of our urban transport?

While our beloved capital city of Dhaka has so many things to boast about, its public commuting system is certainly not one of them.

Despite all the pride and joy that this city brings to us thanks to its rich history, culinary, culture and festivity — these all get overshadowed by the jam and crowd we face on its streets every single day.

And when someone sweats for two hours sitting in an overloaded transport in a hot and humid afternoon, it should make him or her wonder whether the days of horse-driven TomTom were better than motorised vehicles.

And here are the statistics to prove our point. Traffic jam in Dhaka eats up 3.2 million of our working hours every day, a recent World Bank study has found. Meanwhile, according to a research by the Centre for Policy Dialogue, Dhaka's traffic congestion costs the country Tk. 550 billion per year.

While the urgent need for efficient public commuting system has long been felt, little initiatives have been taken by the government or the private sector to ease the situation.

It is against this backdrop that the introduction of real time ridesharing services in the capital in recent months has generated some genuine interest among the Dhaka dwellers.

For a city where incessant hard bargain with a rickshaw puller or a CNG auto-rickshow driver on the streets is the norm, the idea of hailing a car or a bike using a smartphone app may sound more than extraterrestrial.

But thank god! Bangladeshis — being a highly resilient bunch, have the ability to cope with anything new. And it can be expected that very soon, instant ride sharing will become bread-and-butter for Bangladeshi commuters.

Global perspective: Known often as app-based ridesharing or dynamic car pooling, in instant ride sharing service is one of the latest global innovations made possible by the advent of internet.

It is also an epitome of what experts call 'Sharing Economy'. While it is true that the human society have shared the use of assets for thousands of years, the advent of the Internet has made it easier for asset owners and those seeking to use those assets to find each other.

Similarly, with the advent of ride sharing apps like Uber and Lyft, the ride sharing services have enabled people in big cities across the world to share their own vehicles with others on a commercial basis using the online platforms.

While the concept of such service originally came from the West, one can easily argue that such ride sharing platforms are nowhere more important than in the crowded, jam packed cities of Asia where the growth in population and wealth have led to an explosion in transport demand.

After all, who wants to own a car or bike, when he or she can get all the services of a personal vehicle by hailing someone else's car or bike by tapping a simple smartphone app.

And this one particular potential benefit of ride sharing services-its apparent ability to reduce traffic congestion by discouraging excessive vehicle ownership, should be adequate to give this platform a try in Bangladesh.

Bangladesh context: Looking back, US-based Datavoxel Ltd first brought an-app based motorbike service in Bangladesh in May last year.

Consequently, international giant Uber and local provider Pathao were launched by the end of that year and at the time of writing this article-around six to seven ride sharing services are available on the roads of Dhaka.

According to market sources, big names like Uber, Pathao and Bahon altogether log 10,000 rides a day on a average-although, insiders estimate that the actual number could be higher.

In addition, it has been reported that Indian ride-hailing service Ola is planning to extend its operations to Dhaka while a number of local entities are also in line to launch similar services.

Meanwhile, as the ride sharing service takes shape in the country, the government has also come forward in formulating a guideline to regulate the emerging industry. The guideline, according to relevant sources, is expected to be finalised after getting the necessary green light from all the relevant government entities.

Therefore, as the ride sharing services make foray into the life of Bangladeshis, it is important to analyse that what benefits such platforms can have in the context of Bangladesh and how this can be made a sustainable transportation option for Bangladeshi commuters.

Potential benefits of app-based ridesharing: Firstly, as a number of recent global researches indicate, ridesharing services have the potential in helping Dhaka to ease its traffic congestion.

In fact, according to a recent study conducted by Boston Consulting Group (BCG) in various major cities across Asia, around 40 to 70 per cent of private vehicles on the road today could be removed if rideshare becomes a viable substitute for private vehicle ownership.

BCG research also suggests that 10 to 40 per cent of commuters who plan to purchase a car indicate that they are highly willing to forego purchase if rideshare matches private car ownership.

The same study also indicates that pooling of commuters can raise occupancy per vehicle by an average of 1.7x1 across cities studied, reducing the number of vehicles needed to meet transport demand and thereby congestion.

It is this ability of ridesharing services to aspire car-light lifestyle as well as to enable increased occupancy per vehicle that has the potential to go a long way in reducing traffic jam in the capital.

Another big potential benefit of ride sharing service is that this would create avenues for developing local entrepreneurship while also creating a new field for employment and income for anyone with a good licensed vehicle or adequate driving skills.

The potential of ride sharing service in creating local entrepreneurship is already somewhat visible by now. In the space of just one year or so, a number of local ride sharing entities have sprung up in the capital, some of which has already made a name for themselves.

This is also creating scopes for many people to enlist their personal car or bike with a ride sharing platform and generating additional income by providing ridesharing services when such vehicles remain otherwise idle.

In fact, one has to understand that given the lack of efficient commuting system in Dhaka, there is a huge untapped market for such ride sharing service in this city. Pioneering services like Uber and Pathao have only showed the way. However, if this platform is effectively nurtured, there are rooms for grooming a handful of local ride sharing entities in this market.

Nevertheless, nurturing the full social and economic potential of this ride sharing concept requires strong collaboration between the regulators, the ride sharing entities, the vehicle owners and drivers to ensure that this platform becomes a sustainable option in Bangladesh.

How to ensure its sustainability: Firstly, it is a positive notion that the government is currently working on a ridesharing guideline. This is indeed a timely move to effectively regulate this emerging industry. However, a regulatory guideline for such a hi-tech dependent burgeoning sector needs to be progressive and flexible keeping in mind the need of the local customers.

The government policies in this regard should also be as such that it helps bring new investment and facilitates the development of local entrepreneurship. As noted earlier, ride sharing service is an area where there are scopes for nurturing more local entrepreneurs and to bring in more players.

Having more players- both local and international - will help bring more competition in the market. This, in turn, would give the consumers more choices and would push the players to enhance their service quality.

Similarly ride sharing entities, vehicle owners and drivers have a joint responsibility in ensuring quality service for the customers. Strict and definitive criteria should be developed and maintained in enlisting vehicles so that safety and comfort of the passengers can be ensured.

All the ride sharing entities should also develop a comprehensive Code of Conduct to which their drivers and passengers would adhere. Having such a code of conduct is quite essential in ensuring the safety of both passengers and drivers as well as ensuring the quality of service.

When it comes to fixing the fare structure, service providing entities should find the right equilibrium between the affordability of the average local customers and the profitability of the vehicle owners.

Both the ride sharing entities and vehicle owners should understand that the concept of ride sharing is still new in Bangladesh and it is a highly potential but untapped market. For reaching a wider segment of customers and to make this market sustainable, both the ride sharing platforms and the vehicle owners should aim for long term rather than short term gains.

Up until now, most of the ridesharing services in Bangladesh are based in the capital city of Dhaka. Although, a few of them like Pathao have already commenced its operation in Chittagong. With the rapid urbanization taking place in Bangladesh's second tier cities, ride sharing platforms should look to gradually expand their operations beyond Dhaka and Chittagong. In addition, they should look to broaden their services to facilitate inter city transportation. The government guidelines in this regard should encourage and facilitate such expansion.

In a city riddled within traffic congestion and inefficient public transport, instant ride sharing service has ushered a gleam of hope. However, instead of becoming a convenience for a few, these ride sharing entities should look to become a mode of comfortable journey for the wider mass. This, in turn, would make the cities of Bangladesh more pleasant, productive and livable.

The writer is Special Correspondent at The Financial Express.

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