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Opinion: Ridesharing into a Circular Economy: Could taking a cab save the planet?

The current era is characterised by the rise of mobile internet and the app economy. From a transportation perspective, this is evident in the way we use ridesharing today. Services such as Rapido, QuickRide, Ola and Uber have succeeded in providing a ride while replacing the drive. They have also enabled commuters to prioritise convenience and also be productive while on-the-move. But what if rideshare could also be the most sustainable form of motorised mobility?

The rise of ridesharing services

At the core of it, rideshare functions on the principle of sharing assets, fuel, and time. It rewards this behaviour by maximising the utility of an idle vehicle and increasing energy efficiency (as evidenced in Tehran and Beijing). Additionally, there exists the promise of meeting interesting people too! Rideshare is today an integral part of the travel menu for a diverse set of commuters.

Together with the fact of limited resources per capita and the indigenous inventiveness of jugaad, the Indian proclivity to adopt sustainable practices is well-known. This is the very reason why even prior to the advent of platforms, India had a rich culture of “ridesharing”. The ubiquitous shared autos/ taxis in our cities stand testament to that. The quick adoption of platform-based apps and the growth of Mobility-as-a-Service (MaaS) is also embedded in the same idea of building a future-forward mobility ecosystem. 

Establishing alignment of Circular Economy (CE) with ridesharing model

Today, businesses are increasingly paying heed to consumer demand for ecological accountability. While many models have been devised over the years, nothing quite reimagines the production process in a manner that the Circular Economy (CE) does. In this model, emphasis is placed on eliminating any wastage at the design stage itself. According to the Ellen MacArthur Foundation, the long-term goal in CE is to keep natural resources in use and retain their value. Therefore, a Circular Economy model focuses on reusing, refurbishing and retrofitting manufactured products to create value in the product life cycle. This ultimately would lead to better quality of life and livelihoods for all.

Reading this alongside the ridesharing model, one can easily see how CE principles are being adhered to; sharing a vehicle maximises utility from one unit produced while reducing the emissions from redundant manufacturing. Apart from this increase in efficiency, ridesharing also enables the taxi industry to ensure better asset management at the End of Life stage. It also supports multimodality to complement public transport in cities and therefore reduces emissions. This contribution to sustainability and value creation by virtue of formalising mobility services makes ridesharing a perfect vehicle for the circular economy. 

Fleet electrification is the gateway to circularity in ridesharing

A relevant example of circularity in ridesharing is evident from the worldwide push to switch to electric vehicles powered by clean energy: one of the strategies to increase adoption of Electric Vehicles is “fleet electrification” through ridesharing. Fleet electrification will ensure better monitoring of EVs and recycling the assets - vehicle and the battery in a sustainable manner. Another instance is the battery swapping model, whereby the vehicle and the battery are owned by two separate entities. Both these approaches illustrate value creation while keeping wastage and emissions low. 

Cradle-to-cradle approach can be employed to address end of life of vehicles 

However, a common question in the rideshare model is around what happens to   vehicles once they reach the end of their lives. This is especially relevant given the argument that vehicle depreciation accelerates due to repeat use in ridesharing. Currently in India, vehicles are scrapped for metal in secondary markets at the end of their lifespans, pointing at disposal problems, environmental challenges and revenue losses for the government.

An enormous opportunity exists in a vehicle scrapping model where vehicles go back to the manufacturer once they reach the ends of their lives. By moving the product back to its maker, we employ a cradle-to-cradle strategy, a cornerstone of the circular economy. Manufacturers could then harvest usable parts or retrofit the vehicle, saving much in money and energy required for moving and recycling. This would create capacity and efficiency in the primary market itself. An initiative in this direction can be seen in the subscription-based vehicle possession already launched in India by Mahindra & Mahindra and Hyundai. Such models would also seamlessly tie with circular economy as a business practice.

India’s vast unorganised sector has long been feeding into our formal industries, such as automobile manufacturing, by way of a thriving second-hand and vehicle scrapping market. Currently, the Indian vehicle scrapping industry is estimated to be worth INR 43000 crores. The government is in the process of finalising a draft vehicle scrappage policy acknowledging the potential this sector holds. Leveraging these capabilities would help in boosting circularity in India’s auto sector and mobility economy.

Our future should be rooted in conscious consumption of resources and increasing efficiency.  Business models such as ridesharing encourage this through effective usage of vehicles and formalizing recycling at the end of life. Similar endeavours across sectors must be promoted to reduce the collective carbon footprint and drive innovation to embrace circularity.

Sreelakshmi holds a Masters’ Degree from IIT Madras in Development Studies, and is a Research Associate at Ola Mobility Institute. She is passionate about cities and their working, quirks and all. She is acutely interested in studying the position that cities of the 21st Century are in - both in terms of sustainability and as avenues of subsistence and livelihood creation.

Author: Sreelakshmi R