Delhi government’s odd and even formula for restricting traffic comes to an end on Sunday. This was the second time in the last three months that the government has implemented this plan. The first time it did, there were school holidays and the climate was much cooler, and there was much more enthusiasm.
This time, it was implemented in the peak of summer from 15 to 30 April with schools in full swing. Though, parents dropping their children to school were exempted from the plan. The efficacy of the plan is quickly dropping as citizens do not like the inconvenience it brings and are looking at subverting. LocalCircles survey showed that almost 65% citizens are now looking at buying a second car if the plan is going to be regularised. This has increased from 42% in January when the last time this survey was done.
Citizens are always loathe to change their ways, even if it is for their betterment. And any change is always followed by the opposition that there are certain important changes that need to be incorporated if odd and even has to reduce traffic congestion in Delhi. It has been proven by several bodies that it does not bring down the overall pollution in the short term. If other cities like Bangalore, Chennai, Pune or even Kolkatta want to follow odd-even, they need to follow the three-point dictum.
First of all, make sure that the public transportation is able to meet the demands of the citizens when the plan has to be implemented. Increasing public transportation is not a short-term solution as it requires investment so should a city wait endlessly. No, it should not. It is important for citizens to be concerned about traffic congestion and pollution as much as the authority. And only an odd and even plan forces them to think and try alternatives. Citizens everywhere do not want to change their lifestyle. So, this push has to come from the government. So, cities must implement odd and even on a random basis, and also combine it with congestion charges for vehicles from suburbs. Almost every city has toll points from the suburbs. A congestion charge can alternate with the odd and even policy. These are not friendly measures and will always face opposition but they have to be implemented.
Secondly, prepare a sound policy on app companies providing bikes, auto or cars as taxi services. Demand for such services goes up during odd and even and it needs to be handled wisely. Delhi government used the stick to bar surge pricing by companies like UBER, OLA and other companies. This led the app companies to suspend the incentives for their drivers during the period of surging prices. As a result, the number of cabs available during the peak hours dropped. Though not everybody understands it and articles like this one from Mint further spread the myth. UBER and OLA are not marketplaces, though they would love to be seen as such. They do aggregate demand and supply but they are not transparent and due to the control they exercise, they are not market places. For instance, can you imagine a market place like Bombay Stock Exchange charging a 25% charge for every transaction, or not showing you the total buy or sell orders?
UBER or OLA do match people looking for taxis with cab drivers but they do not allow price discovery on the platform. They control the prices, can you imagine Bombay Stock Exchange determining the price of the stock that you want to buy based on the time or demand for the stock? Even worse, if BSE said the hike in price would be absorbed by them and they would give you an incentive for the number of times you sold. True markets allow a perfect discovery of prices based on demand on supply. So at best, UBER and OLA are good taxi reservation platforms doing a matching.
The way this app companies functions during odd and even shows that they are not above subverting systems. They suspended their incentive schemes for their cab drivers. Surging pricing charges are kept by UBER or OLA, according to drivers, though a question sent to the companies did not get any response. Both OLA and UBER refused to answer any questions about suspension of the incentives and nature of the incentive.
Drivers of OLA and UBER say that they get fixed incentive, ranging from Rs 2200 to Rs 3600 depending upon the day and time, if they complete 9-12 trips. Now once this incentive was suspended, the drivers stopped cruising around looking for trips they started parking their cars. As cruising consumes fuel and is a cost, they started waiting for the demand to rise to come to them instead of going where the demand will be. This is why there were few cabs during peak hours during the odd and even days in Delhi.
City governments need to look at both surge pricing and incentive practices followed by app companies. It is true that app companies are able to give incentives because they earn more due to surge pricing. But surge pricing cannot be completely free it has to have some caps. It is better that the companies come up with these caps instead of the government mandating them. And if app companies continue to play truant with customers by withdrawing cabs during peak periods competitors will surely come up.
Lastly, any other city looking at odd and even must realise that it is not a short-term solution to pollution. It is a tool to reduce the traffic on the roads which in the long run can have an impact on the pollution. But it cannot be regularised as it will lead to subversion by citizens in the form of a second car. It is one of the tools for reducing traffic congestion and cannot work in a vacuum. Traffic congestion has to be an overall policy that every city needs to have now, and they need to draft it as soon as possible. The biggest barrier to traffic congestion policy at national, state or even city level is the auto lobby. It is unlikely that they would allow such a policy to take shape at the national level. Cities are better placed to do it and the must do it.
(K Yatish Rajawat is a business strategist and policy commentator based in Delhi, he tweets @yatishrajawat.)
Published Date: May 01, 2016 10:10 AM | Updated Date: May 01, 2016 11:36 AM