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February 3, 2020

‘Ride-hailing start-ups can do more good than bus rapid transit systems’


February 3, 2020

Muneeb Maayr, founder of a ride-hailing service, wants the government to deploy capital for private ride-hailing services rather than investing in bus rapid transit (BRT) systems at routes that aren’t profitable or even at break-even.

He elaborated how culturally women don’t feel comfortable getting on a motorbike, which he said is a “cultural nuance”. He was also of the opinion that bicycles generally can’t be pedalled beyond a two-kilometre radius, and that one would always need a motorised vehicle for that.

An intense but meaningful debate on ‘Public Transportation in Pakistan’ was held on the second day of the Adab Festival on Saturday.

The conversation revolved around three key points: operational cost and subsidy on BRT systems, merits of deployment of capital for ride-hailing services by the government and induction of bicycles into the BRT system, and a cultural taboo revolving around women driving bicycles or motorbikes.

Subsidy without taxpayers’ money

There are ways where you can actually subsidise without taxpayers’ money, believes Ashar Lodhi, director at a consulting & project management firm. His company is also the operational consultant for the BRT system’s Red Line section to be constructed on University Road.

If the cost of a metro system per passenger is Rs60 and out of that the passenger pays Rs20 as fare, the remaining Rs40 per person per trip is a shortfall for the government.

This Rs40 shortfall, Lodhi explained, is generally adjusted through the taxpayers, which he said is a flawed way of subsidising a mega transport project.

“In Lahore or Islamabad, the average cost per passenger is approximately Rs60,” he said, adding that the charge of fare in these cities, as well as Multan, is a flat Rs20. The deficit there is met through the taxpayer’s money.

In Singapore and Hong Kong, expensive rail-based systems are being run, but “the shortfall is not subsidised through the public’s money”.

The (different BRT) systems being designed in Karachi, he said, have the capacity to serve millions of people per day. To this the session’s moderator, Ishaq Kothawala, who seemed to be completely unaware of the city’s transport woes, asked why those millions of people are not benefitting by it today.

“It is not being applied today,” Lodhi answered politely. “What is not being applied,” asked a puzzled Kothawala. “What I’m talking about: the mass transit and the BRT network; it hasn’t been deployed yet,” explained Lodhi.

He shared that the existing public transport runs in a very obsolete manner, which is why it has failed from 2008 to 2019. “That is why we are seeing [ride-hailing services] and a lot of other services filling the gap.”

Inducting bicycles into BRT system

Rameen Nadeem, an Institute of Business Administration (IBA) student, who has introduced a bike-renting platform at her campus, was also among the panellists.

They charge Rs100 for 30 minutes, and allow IBA students to wander inside the University of Karachi (KU) and nearby places on their bicycles, which are parked at the hostel of the varsity.

Lodhi appreciated the idea. As for the Karachi Mass Transit Network, he said they will have a dedicated bicycle lane replacing one of the traffic lanes. “A traffic lane is about 3.5-metre wide, but a bicycle lane is about 1.8-metre wide, so it can always be accommodated,” he said.

A bicycle-sharing system will be a part of the BRT system, as there will be dedicated bicycle lanes on both sides of the BRT network, which will be physically delineated from the mixed traffic and walking strips.

KU and the NED University, he said, will have bicycles stops. There will be about 10 stops in KU alone, including from Maskan Gate to IBA.

IBA’s main campus is inside KU. “This is integrated on a single fare of BRT,” he said. “You can just tamp, take out the bicycle, ride it and leave it anywhere. You can do it throughout the BRT network.”

Maayr seemed sceptical of this idea and called it a fancy being adopted from other countries. There are 17 million motorbikes in the country.

“If you want to get from point A to point B in KU from IBA, why can’t you on a motorbike,” he said. “The difference is that culturally women don’t feel comfortable getting on a motorbike. That’s a cultural nuance.”

He was adamant that one can only get beyond a two-kilometre radius on a motorised vehicle, “whether it’s motorised through electricity, or motorised through fuel”. Clean energy and lowering the usage of fuel ultimately doesn’t matter to him. “Essentially, you’re replacing batteries with the conceivable.”

To this Lodhi introduced the concept of last mile coverage (LMC), saying that it’s where bicycles are essentially used. If you have to go from the bus stop to your campus or to a shopping mall, the bicycle can be used with a single fare, and that is what LMC is.

Until the mid-80s there were a large number of bicyclers in Karachi. “It’s very easy to bring bicycles back to the city. I remember that from FB Area to Tower, lunch was delivered to offices on bicycles back then,” he said.

Capital for ride-hailing services

The moderator asked Maayr how private ride-hailing companies can serve on routes that aren’t profitable. “This gap can be filled by the public transport only,” said Kothawala.

Maayr explained that in Karachi, either there needs to be a ban on cars or taxation has to be drastically increased so that the number of cars on the roads is reduced, following which people need to be forced to use the BRT network, so the routes where the number of commuters is less can be covered by those where it’s higher.

Should the state run unprofitable routes? He answered: “Sure!” But he finds it quite frustrating, as the state continues to deploy “millions of dollars for these vanity projects that they try to replicate from overseas”.

“It [the government] doesn’t deploy [capital] for technology companies like us, which basically, clearly drive a lot of utility,” he pointed out, and asked the government why it wants to run BRT networks at those routes that aren’t profitable or even at break-even, and doesn’t deploy the same capital for private enterprises.

Lodhi frustratingly pitched in and asked to replace the word “subsidy” with the phrase “operational deficit”. The question is: from which budget head the government minimises that operational deficit and then from where it feeds that budget deficit.

“If it’s fed from the tax payers’ money, it’s a crime,” Lodhi frowned. Maayr and Kothawala showed keen interest in knowing what other ways can it be fed from.

You have revenue from fare and then expenditure, explained Lodhi. The biggest expenditure is that of fuel. For an 18-metre bus, the average fuel consumption is about two kilometres per litre.

When this is replaced with a hybrid electric bus that runs on diesel as well, its fuel consumption will be six kilometres per litre. “This means a huge segment of the operational cost reduces.”

Then there are other ways with which extra money can be earned: advertising, branding and real estate development. He gave the example of the Numaish bus station of the BRT, where a huge mezzanine floor underpass is being constructed for the BRT network.

“The cost of its name royalty is Rs50 million,” he said, adding that imagine if Maayr’s ride-hailing service wants the Numaish bus station to be called by his company’s name. “That is worth about Rs50 million,” he smiled. For the Sakhi Hassan bus station of the Green Line BRT, a neighbourhood project is ready to pay Rs25 million to Rs30 million only on name royalty.

Kothawala then questioned the need of huge BRT systems and asked why it’s unfeasible to subsidise ride-hailing services for ordinary citizens. To this Lodhi responded that the biggest investment in a recent app-based urban mass transit start-up is from those

Pakistanis who have made their way back from the

Middle East.

Ultimately, the service is charging Rs150, which means Rs300 per day, which is about 30 to 35 per cent of a passenger’s income.

“In 2008, it was about 12 per cent,” he said, adding that be it a private or government enterprise, it’s an exacerbation of the people’s poverty. As for enhancing the existing bus system, he said that it has already been applied and failed in Delhi.