E-Rickshaws Offer Last-Mile Connectivity; They Are Also Creating Jobs In Informal Sector

Apart from being easy on the pocket, the e-rickshaws have become a substantial self-employment system. The registration of passenger e-rickshaws stood at 4,74,224 units in 2023, a jump from 82,849 units in 2020, according to Vahan data, a clear 5-fold jump.

In February last year, Union Road Transport and Highways Minister Nitin Gadkari championed e-rickshaws and asserted how their increase has ended the inhuman practice of one man carrying another man vis-a-vis the handpulled and cycle rickshaws.

Analysts believe the commercial use of e-rickshaws and electric vehicles (EV) can be exploited by manufacturers looking at lower volumes in fossil fuel-run automobiles. Further, this can play a critical role in making India a global leader in the EV sector by 2030. A recent Bain and Company report said EVs could account for over 40 per cent of India’s automotive market and generate over $100 billion in revenue by 2030. Therefore, policy-makers need to explore avenues for raising EV penetration. Barring the Tata Blu cab service and Bajaj e-autos, there isn't much commercial EV presence otherwise right now.

Uttar Pradesh is already a leading state in e-rickshaw registration. It has the highest number of the unorganised workforce in the country as well.

According to Vahan data, 2,04,820 passenger e-rickshaws were registered in the state in 2023. This points to how e-rickshaws are the avenue more and more people are betting on for earning a daily wage, instead of other employment avenues. Or rent for people investing in them and letting them out for a sum.

With e-rickshaws costing between Rs 1 lakh to Rs 2 lakh, they have become a preferred choice for owner-drivers. The increase in the number of vehicles registered is also due to rental service providers who see this as a convenient investment.

“I bought an e-rickshaw because it was more feasible for me, owing to its maintenance cost, charging cost, and range compared to a conventional autorickshaw,” said Surinder, an e-rickshaw driver in East Delhi’s Mayur Vihar. He owns a single-battery rickshaw and makes some Rs 700 to 800 per day.

“The maintenance cost ranges around Rs 5000, including charging and other costs. It covers 50 to 60 km depending on various factors,” he said.

Surinder noted how there are more e-rickshaws after the COVID-19 outbreak, leading to more competition and a dip in the daily collection. This could point to more people who have lost jobs turning to e-rickshaws as either a daily wage or as an investment with an assured return. Many rent out e-rickshaws on a day-to-day basis to drivers at a nominal cost.

“I own 5 e-rickshaws and I make a monthly profit of Rs 5,000-Rs 6,000 per unit that is rented. The rent cost for each unit is Rs 300 a day and I bear the maintenance cost for the month, excluding charging,” said Dheeraj, who has an e-rickshaw rental business in Mayur Vihar.

Dheeraj added the e-rickshaw business plan is more lucrative compared to renting out a conventional auto, which he engaged in before and got just marginal profits. He attributed the profit in the e-rickshaw business to the expenditure on the life maintenance cost and other additional costs.

Like Dheeraj, many others have also turned to the E-rickshaw rental business by providing drivers with rickshaws at daily rental cost. This has allowed the unorganised workers to get a revenue resource even if they are financially in a condition to buy a personal e-rickshaw themselves.

Experts said commercial use of EVs, including small vehicles and taxi or cab services, would prudently be key to building an appetite for EVs in the country. “Small EVs are more feasible due to them being a straightforward technology, which also provides energy efficiency as there are no gears, unlike internal combustion engine (ICE) counterparts. Owning a small EV like E-rickshaws or 2 EVs is very cost-friendly,” automobile analyst Murad Ali Baig told The Secretariat.

He said manufacturing of small EVs is budget-friendly as it needs minimal investment and infrastructure compared to a conventional ICE passenger vehicle. “The prices of batteries are also going down, which will help to make e-rickshaws a lucrative and cost-effective decision,” Baig added.

The third phase of Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) is in the works. Although, reports said the FAME Phase III will prioritise the public transport sector, boosting charging infrastructure and adopting alternative fuel vehicles. The manufacturers would seek an increased outlay to keep the EV momentum going. The government brought in Fame I in April 2015 and Fame II in April 2019 to boost charging infrastructure and provide subsidies for electric and hybrid vehicles, which helped make EVs more competitive with ICE counterparts.

Thus, it would be useful for the government and the manufacturers to ride the trend and bet on the commercial segment for EVs. Doing so won’t only eliminate fossil-fuel-powered vehicles from Indian roads but would also create jobs in the unorganised sector.

India can learn from China and work with logistics and cab-hailing companies to chart charging stations in various cluster areas to streamline fears over charging infrastructure. It would not only help boost the logistics sector but can also make charging costs cheaper.

Government focus on commercial EVs can promote sustainability in India, both climate and job-wise. Frustrated motorists can button their lips and keep calm for EVs are here to stay and may just replace diesel trucks in the long run.