India is expected to be a leader in shared mobility by 2030 as rising share of electric and autonomous vehicles will improve shared mile economics, says a Morgan Stanley report.
According to the global financial services major, India offers all the right ingredients to be one of the largest shared mobility markets in the world as it has large population clusters, a young demographic that is well connected to the internet and rising real incomes.
By 2030, Morgan Stanley expects shared miles to reach 35 per cent of all the miles travelled in India and this will further increase to 50 per cent by 2040.
Post 2030, it also expects this trend of shared mobility to partly replace individual car ownership while app-based taxi services will mainly replace public transport rather than personal car usage.
India had 257 billion miles driven in 2017, and of that, 10 per cent were shared (includes traditional taxis and app-based plays), based on Morgan Stanley estimates.
"We believe this can rise to 35 per cent by 2030, implying an 18 per cent CAGR," it noted.
The report further noted that large population clusters are the first prerequisite for successful shared mobility. India has 61 cities with populations greater than San Francisco's (850,000 population), and 50 cities with populations of more than 1 million.
Besides, public intercity transportation infrastructure (including trains and local buses) in India have been slow to ramp-up.
Moreover, India's internet penetration has hit an inflection point as consumers have access to cheaper handsets and affordable data plans.
As per World Bank data, 850 million of Indian are below the age of 35 and since young people are usually quicker to adopt new trends and are less likely to own a car, implying a likelihood of adopting new mobility options.
Further rises in incomes will also lead to higher spending on shared mobility, while economics and demographics will create a pool of drivers.
"Over the next decade, we expect the proportion of shared mobility to expand in the overall mix, and also, within shared mobility, we expect the mix to shift from traditional taxis to app-based plays," the report said.