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Formalising the informal

E-rickshaws have proliferated because most of them remain unregistered; there is a need to regulate their operations

Formalising the informal
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Intermediate Para Transit (IPT) — a system that facilitates flexible passenger transportation and that does not necessarily follow fixed routes and schedules — is an integral part of the mobility ecosystem in Indian cities. The toxic emissions by the conventional internal combustion engine (ICE), however, are worrisome.

ICE-IPT vehicles contribute to vehicular pollution share: A conventional three-wheeler running on liquefied petroleum gas (LPG) emits approximately 0.005 tonnes of Particulate Matter10 (PM10) in a year and about 3.72 tonnes of carbon dioxide in a year, according to a study conducted by The Energy Research Institute (TERI).

Alternative fuel-based mobility options are being explored to combat these problems. And electric three-wheel based IPT segment, especially electric-rickshaws (e-rickshaw), are emerging as a winner in this transition.

There are, however, multiple challenges that need to be addressed to make this transition smooth.

Speedy growth

E-rickshaws currently comprise 83 per cent of the India electric vehicle market.

India currently has around 15 lakh e-rickshaws that increase with additional sales of around 11,000 new ones every month. These figures could be much higher as a large percentage is still unregistered. The market is expected to witness a sale of 9.25 lakh e-rickshaw by 2024.

The major growth drivers behind this tremendous growth are socio-economic and environmental benefits, along with the supportive government policy landscape:

Socio-economic benefits: The upfront cost of an e-rickshaw is quite low compared to its counterpart ICE-based auto-rickshaw. The initial cost of an e-rickshaw is Rs 0.6-1.1 lakh, whereas the cost of an ICE-based auto-rickshaw Rs 1.5-3 lakh. Similarly, the running cost for an e-rickshaw is only Rs 0.4 a kilometre as compared to Rs 2.1-2.3 a km for the ICE-based rickshaws. The maintenance issues related to e-rickshaws are quite less, which saves maintenance cost. E-rickshaws provide better employment opportunities to cycle-rickshaw drivers whose business is swiftly vanishing.

Environmental benefits: E-rickshaws help mitigate air and noise pollution. At least 1,036.6 tonnes of CO2 emissions can be mitigated a day (378,357 tonne CO2 annually) if compressed natural gas auto is replaced by e-rickshaws.

Supportive policy/mission/scheme: Continuous support has come through National Electric Mobility Mission, 2013; National Urban Livelihood Mission 2013, Pradhan Mantri Mudra Yojna, 2015; Smart City Mission, 2015; Faster Adaptation of Manufacturing of Electric Vehicles (FAME I and II), state's electric vehicle policy in the form of loans, regulatory framework and direct subsidies.

Issues with mass deployment

Despite their mass deployment, there are several issues associated with the regulation of e-rickshaws.

Their components are imported from outside but are assembled in India. These are usually non-standardised and assembled in local workshops without complying with standards.

Unorganised players sell 10,000 e-rickshaws a month against 1,500-2,000 a month for organised players. The e-rickshaws sold by the unorganised sector are of poor quality and operate on the lead-acid battery that needs to be changed after every six-eight months.

The replacement cost per battery is Rs 25,000-Rs 28,000. The lead-acid batteries usually weigh close to 80 kilograms, which reduces vehicle mileage. As the battery cannot be refurbished, an e-rickshaw owner typically returns it to the vendor it has run its life.

Used batteries are often disposed of carelessly, harming the environment. The Union government discontinued subsidy for lead acid-based e-rickshaws from October 2019 amid FAME I.

E-rickshaws have proliferated because most of them remain unregistered. India has around 15 lakh e-rickshaws in 2021; till 2019, only 1.5 lakh were registered. Delhi, for instance, has more than 1 lakh e-rickshaws; but only 5,891 are registered.

As a result, drivers do not hold valid licenses and the safety of passengers is compromised.

The lack of authorised e-rickshaw charging facilities leads to power theft. Several unorganised setups in Delhi provide bulk charging at night by doing power theft. The e-rickshaw owners pay fixed money (Rs 100-150) for parking and charging facilities.

For the electric rickshaw market to flourish sustainably, a combination of policy and regulatory interventions are needed as discussed below:

Need to improve product design and quality: Considering the rampant growth of e-rickshaws in absence of a regulatory framework, it is important to bring the supply chain into a formal channel. While specified rules and safety standards have been laid down in recent years, cheaper e-rickshaws assembled by manufacturers with low-quality parts imported from China. They, hence, ply illegally on the roads.

There are about 340 e-rickshaw manufacturing units in Delhi alone, but very few are compliant with the ARAI / ICAT standards. The life of these electric rickshaws is barely1-1.5 years.

Manufacturers must relook and come up with a better design. As mentioned in a media report, the Union minister of road transport and highways had recently said the government is ready to fund if the e-rickshaw manufacturers are ready to work with any Indian Institute of Technology for improvement in quality, testing, norms and design.

Track adherence to safety standards of e-rickshaws: E-rickshaw owners would be asked to show a roadworthiness certificate from their manufacturer or registered e-rickshaw association, along with a valid driving license to the Regional Transport Authorities (RTA).

The RTAs can then provide an approval certificate, which can be randomly checked by the traffic police as it is done in case of a Pollution under Control (PUC) certificate.

Localising manufacturing of lithium-ion battery: India heavily relies on China for the import of batteries due to which in the cost breakup of EVs, battery occupies a major chunk. The localisation of battery manufacturing will help in reducing the overall cost of EV, debar the usage of cheap lead-acid battery which is majorly used in e-rickshaws, and generate employment opportunities.

The whole process of localization will take place in several phases. The initial years shall be invested in research and development (R&D) and creating a market ecosystem.

In the intermediate phase, only the import of lithium-ion cells can be done and the battery assembled in India.

In the end, the market can gradually shift to provide end-to-end service with 100 per cent manufacturing in India. For ensuring the sustainability of small manufacturers in the initial phase, they can collaborate with large manufacturers and as the market matures, they can gradually become independent.

The government should also soon decide on whether to standardise battery technology or not. It is critical because uncertainty in the decision will create confusion among the companies seeking to invest in it. If the government delays this decision and investors invest in non-standardized battery technology, then it will create a huge loss for the investors.

Incentivise scientific disposal of lead-acid battery of e-rickshaws: Localisation of the lithium-ion battery would help in encouraging people to purchase lithium-ion based e-rickshaws. The current operation stock of lead-acid e-rickshaws, however, cannot be ignored.

Therefore, e-rickshaw manufacturers should launch a buy and back scheme through which scientific disposal of lead-acid-based e-rickshaws can be linked with a discount on the purchase of new lithium-ion-based ones.

Views expressed are personal

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