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Link between ride-sharing and drop in car sales not a figment of Nirmala Sitharaman's imagination, but this debate is fake; here's why

  • Legitimate queries can be raised about the veracity of the finance minister's claims, but it should be noted that she did not present ride-sharing as the sole cause behind slowdown, but as one of the causes driving it

  • Therefore, to make headlines and TV debates out of just one comment by taking it out context gives the impression that Sitharaman was blaming the millennials for slowdown in auto sector, and consequently, Indian economy

  • This misrepresentation of facts gives rise to a fake narrative, and soon enough that fake narrative acquires a political colour

Everyone loves a good outrage. Especially, the media. Now there's social media as well, so the game is rapidly changing. All it needs is a “quotable quote” that could be taken out of context. Now garnish it with a generous bit of imagination, add a dash of rhetoric and you have a suitable narrative. No need for understanding the context, taking stock of the exact thing that has been said or fact-checking the comments. What's the need when a good outrage can oil the 'news cycle' machine and generate enough memes for a day or two?

Readers will forgive me for the primer, but this was necessary to place Nirmala Sitharaman's comments — that have sparked an outrage — in the proper context. The Union finance minister is being panned in media (and social media) for her reported comments that auto sector slowdown is being caused by the “millennial mindset” of hailing ride-sharing services like Uber and Ola. These comments have given rise to scathing remarks from the Opposition, outrage cycle in media and hilarious memes on social media.

Amid this enjoyable circus, everyone forgot to ask two things. One, was there any truth in the finance ministe's words? And two, is this even a valid debate?

First, let us take a look at Sitharaman’s exact comments. This is a very basic thing, and invariably overlooked by the "outrage specialists" who need a good headline.

 Link between ride-sharing and drop in car sales not a figment of Nirmala Sitharamans imagination, but this debate is fake; heres why

File image of Union Finance Minister Nirmala Sitharaman. PTI

The Union finance minister did nowhere say that millennial preference for ride-sharing (through Ola and Uber) is the only reason behind auto sector slowdown. In fact, she presented a variety of reasons behind the slowdown that has seen vehicle sales across categories declined by 23.55 percent to 1,821,490 units in August 2019 from 2,382,436 units in August 2018, according to data from the Society of Indian Automobile Manufacturers (SIAM).

Speaking to the media on Tuesday in Chennai, Sitharaman claimed the automobile sector "has been affected by several things such as the BS-VI movement, registration fee matter… and the mindset of millennials. Some studies show that millennials prefer not to commit to an EMI and instead prefer having Ola or Uber or taking the metro. So, a whole lot of factors are influencing it."

Legitimate queries can be raised about the veracity of the finance minister's claims, but it should be noted that she did not present ride-sharing as the sole cause behind slowdown, but as one of the causes driving it. Therefore, to make headlines and TV debates out of just one comment by taking it out context gives the impression that Sitharaman was blaming the millennials for slowdown in auto sector, and consequently, Indian economy.

This misrepresentation of facts gives rise to a fake narrative, and soon enough that fake narrative acquires a political colour. The Congress has slammed Sitharaman for making a “gross overstatement” and a “grave joke on the poor state of the economy.” The party demanded that “she must self-expunge her remarks and apologise.”

The Gandhis soon threw their hats into the ring and took aim Sitharaman over her “millennial” comments. “It was said before the election that Ola-Uber had increased employment. It is now being said that due to Ola-Uber there has been a slowdown in the auto sector. Why is the BJP government so confused about the economy?”, posed Priyanka Gandhi Vadra on Twitter.

In effect, what was presented as "one of the causes" behind slowdown became the de facto cause, and a narrative was born that “BJP blames millennials for its inability to manage the economy”.

Now let us consider whether Sitharaman was wide off the mark in attributing to millennials the mindset that they prefer hailing cabs for personal rides instead of investing in a car or paying EMIs for it.

Forbes magazine quotes Deloitte’s 2019 Global Automotive Consumer Study (released in June) to report that Indian youth are driving a tectonic shift toward shared mobility services. In a nation where more than half of its population is under the age of 25, this shift from ownership of a car to ride-sharing via cab aggregators has already hit and will hit further the automotive sector. The magazine also quotes a Morgan Stanley report, that predicts "that by the year 2030 India will witness an expansion of shared mobility services and is expected to emerge as a leader in shared mobility. The proportion of shared miles will reach 35 percent of all the miles travelled in the country, and this will further increase to 50% by 2040."

The finance minister did say during the news conference that some studies have pointed towards such a conclusion, and as we can see, she was not wrong. A Moneycontrol report quotes Uday Kotak, chairman and managing director of Kotak Mahindra Bank, as saying that auto sector must be flexible to meet the structural challenges posed by aggregators such as Ola and Uber, and “Uber and Ola are here to stay and so is the millennials’ preference for them." Kotak’s views, according to the report, was backed by Gautam Duggad, head of research at Motilal Oswal. Duggad was quoted, as saying that Uber and Ola’s impact would be visible on vehicles sales over the long term — maybe over a 10-year period.

When we consider factors that influence buying of a car — a financial commitment stretching over several years since most vehicles for personal use are purchased through the finance-scheme route — the slowdown in economy has definitely played a part.

But we must be equally aware of extraneous factors that motivate the decision to buy a car. Urban spaces are increasingly congested and poor infrastructure means lack of space for parking, congested and badly maintained roads, expensive vehicle ownership cycle and reducing resale value. Cab aggregators present a one-shot solution to nearly all these problems, with the added advantage that shared commuting brings down transportation costs. This lifestyle has — as studies seem to show — and will increasingly impact decision to claim ownership of vehicles.

This is not to absolve the Centre of its responsibilities towards auto sector or handling of the economy but to create a fake debate out of a narrative that doesn’t exist, or take a comment out of context to outrage, are tendencies the media should avoid to preserve whatever is left of its dwindling credibility.

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Updated Date: Sep 12, 2019 19:10:05 IST