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January 20, 2021 Wednesday 12:02:27 AM IST

Metro Rail Vs Automobile-The Economics of Premium Public Transport Pricing

Guest Column

Early 1900's in Europe

Horse carriages were the main source of transport for the rich and the poor. Maintaining horses required huge quantities of oats, water and other resources while horse dung piled up on roads and public places. No doubt it was an environmental nightmare. If it were to happen today, the climate change activists would ring alarm bells and put an end to the gallop. Ultimately, the crisis was solved with the arrival of Henry Ford's Motor car. And when it was launched people ridiculed him saying who will buy cars when there are so much horse carriages around! 1

Late 1970's, Early 1980's in India

Many towns and cities in the country had pulled rickshaws that were laboriously pulled by a human runner. Bullock carts were also quite common as a transport vehicle and as a means of transport of goods. The arrival of auto rickshaws and mini pickup vans, ban on entry of bullock carts in peak hours in city roads caused the slow death of bullock carts.


January 2021 in Kochi

Dr D Dhanuraj, a public policy expert with Centre for Public Policy Research (CPPR) and his family of four takes a ride in Kochi Metro, perhaps, for the first time since the service was launched three years ago and realises that it is much more costly than riding the same distance two and fro in his own car.  He calculated that he would have spend only Rs 200 in his car for the same Metro ride for which he paid Rs 400 plus 40 rupees parking fee. His FB post on this issue led to an outpouring of support for his view that government had prioritised this costly mode of public transport over cheaper means and that was why there was less patronage for this service.

How the Math Went Wrong

The rate charged by Kochi Metro doesn't look exorbitant when compared to a bumpy ride in an autorickshaw (common man's public transport) for the same distance. The Metro was charging a premium over a city bus  possibly because it offers A/C comfort, cleanliness, superior technology, speed, accident free and secure travel. 


On the one hand,  a wrong comparison was made with private transport when the Kochi Metro should have been compared with similar modes of public transport and on the other hand we cannot overlook the efficiencies brought out by Kochi Metro including too frequent trips for the benefit of commuters. One of the important lessons that Economics students learn through statistical methods is to avoid wrong comparisons. Many a times this writer felt that going from Kochi to Trivandrum (215 km) with a four-member family was a bit cheaper in his own A/c sedan than travelling in an A/C chair car or coach in a train or a Volvo bus of state-run transport corporation, however, if one were to travel alone, it makes sense to go for the public transport. With this comparison, we cannot argue that Indian Railways is overcharging compared to private mode of transport.  As I look back at the 1990’s when I graduated in Economics, the number of students vying for available seats in  economic courses at the graduate and post graduate levels has risen many fold now. The cut off marks for eligibility for Economics courses are close to 100%. One can only hope that the such students just don’t end up pursuing a degree for the sake of it and genuinely try to bring Applied Economics into mainstream discussions and thought.

Why the Premium?
There are many features that make Kochi Metro eligible to charge a premium over other modes of transport.  The problem with Kochi Metro is that people are only getting used to travelling in Metro and most importantly those who could afford the ride were not using it. Government can think of various incentives and disincentives that can make people opt for Metro travel.  In peak hours when the traffic on the road below the metro bridges move at a snail’s pace, the Metro trains zooms along. The trick is in getting those thousands of 2-wheeler riders and other motorists to make them climb the  Metro station steps and take a cleaner ride. 

One also need to understand the business model of Kochi Metro which is not designed on the basis of ticket fares alone. They can raise money through advertisements and hoardings on platforms, on the pillars, on the train and also renting out shop space in stations. Over a period of time when revenue from other sources also complement Kochi Metro, they could possibly think of offering discounts for regular travellers. 

Kochi Metro also brought clean, pollution free travel to Kerala and if more people used it the roads congestion would be eased and private and public transport buses could ply faster enabling better affordable services to the common man that the public policy expert was concerned about.

India Government had announced the ambitious mission of making India all electric by 2032 and our nation is set to become the world’s second largest Electric Vehicle (EV) market by 2020. Kochi Metro was the first to launch fully electric transport and higher use of renewable energy sources for its operations in the State. We all know the example of Delhi which was choked with pollution in recent years with increase in private and public vehicles on roads.

India is home to 20 most polluted cities of the world. And the energy required to run these urban centres and industrial backbone of India’s economic growth has resulted in a staggering 214 million tonnes of crude oil imports last year (2017). 2

Affordable Public Transport
The public policy expert argued for an affordable public transport for the common man and at the same time reduce traffic congestion. The challenge of policy makers in urban and semi-urban areas is to provide a variety of public transport services that includes economy, classic and premium services using all available resources (water, rail and road).  And atleast in the case of KMRL they are trying to be as innovative as possible.


"The Kochi Metro aims to create India first public transport system where the metro, buses, the boats, the autorickshaws and the taxis work together as a seamless integrated system....  Through initiatives like e-auto, solar-powered stations, plastic recycling machines etc.. we have been able to make significant changes in the environment and people's lives," according to Alkesh Kumar Sharma, Managing Director of KMRL 3

It is often fashionable to talk about the lack of facilities for the common man and it is raised mostly by the middle class who may never give a free ride for the needy on the road. (Charity and kindness begins at home!). The concern for affordable public transport is laudable and should be appreciated but it should not be done with the mindset of the early 19th century when bullock carts and hand pulled carriages reigned. Public transport is far from perfect even in advanced nations but that doesn’t mean we shouldn’t try to optimise our resources for clean, affordable and diverse modes of commuting especially in urban areas. 

References

1.   -Super Freakonomics by Steven D Levitt and Stephen J Dubner

2.    -  Mission 2032: Towards an All-Electric Nation by Mahesh Babu in The Path Ahead, Transformative Ideas for India, Amitabh Kant (Ed.) PP.198, Rupa Publns, 2018
  --www.kochimetro.org.



Sreekumar Raghavan

Sreekumar Raghavan is an award-winning business journalist with over two and a half decades of experience in print, magazine and online journalism. A Google-certified Digital Marketing Professional, he specialises in content development for web, digital marketing and training, media relations and related areas. He is the recipient of MP Narayana Pillai Award for Journalism in 2001 and holds a bachelors degree in Economics and Masters Degree in Mass Communication and Journalism from Kerala University.

 

 

 

 


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