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Writer's pictureAnu Jain

Point of view: Digitalization and innovations in energy sector, boosting Sustainability in Indian Intercity Bus Transport Services

Updated: Nov 11

In this first post of the year 2024, I am highlighting the #Flix platform model (which also includes being a classic transport operator) whose value proposition is affordable and sustainable travel. The company’s #Flixbus service that is by now established in 40 countries will be expanding its network using electric buses for intercity passenger transport services in India this year. The country—which is one of the biggest bus markets in the world—aims to make collective transport electric. The goal is of reaching 40% e-bus penetration by 2030.

Looking from the perspective of #Flix’s success model in Europe (#Flixbus, #Flixtrain), I have attempted to assess where and how such business models can excel in India and what challenges may be anticipated to enter, further sustain in the intercity bus market. You can also read about this in an earlier post on #Flixtrain here


According to Flix, the success of its business model comes from “digitalizing traditional means of transport like bus and rail while focussing on technology development, network planning (including route licensing), operations management (including traffic control), marketing & sales, quality management, and continuous product expansion, customer service”. It collaborates with regional operators e.g. bus companies by outsourcing the daily operations including the management of the fleet. The company’s focus in development projects, including for electric and hydrogen buses can offer it a competitive advantage with regards to sustainability.



The data indicates that there are several opportunities and #Flix's skills as well as knowledge in bus services may help them take advantage of the market. The intercity bus sector in India is still increasing, according to Prashant Kumar’s well written LinkedIn article, which estimates its value at roughly 15 billion USD and still growing. The figures on private bus operators vary but what is clear is that the market is highly fragmented. As per an article in hindubusinessline, 4500 private operators and more than 25 state road transport operators are active in the intercity bus market. With airfares increasing and rail transport having long reached its limit in terms of service supply, the growth outlook in the bus market is good.


There are some crucial hinderances for newcomers in entering the market as well. Several established players have already started services using EVs (Electric Vehicles), online booking and value added services like WiFi, charging points, and real time assistance. One of these is #redBus, a leading online platform for booking bus tickets. More than 3500 private bus operators and 25 road transport corporations (RTC) offer their services via this platform. There is also dependence on the EV market that is still evolving. While there are policies in place at the national and state level for adoption of EVs, establishing a charging infrastructure, especially in rapidly developing Tier 2 and Tier 3 cities (growing cities, including internet penetration) is an arduous undertaking that will require careful design and execution. In the grand scheme of things, energy and transport network industries will interact with one another for growth in this transport sector to take place.


#Flixbus services aim to be an alternative to low-cost airlines (in which fares are rising), to rail transport (there isn't enough rail capacity to meet demand) and to individual transport. Its commercial debut in this election year will be interesting to watch. In these circumstances, will #Flixbus be able to continue using its current business model (i.e. make way for standardisation) that has paid off in the western markets or will they make changes to it for the Indian customer like the foreign entrants in other markets e.g. McDonald’s changing its menu to accomodate local customs and preferences? Here are a few interesting aspects with examples to illustrate the point.


Network Coverage

In the economic times (Indiatimes) interview, Flix recognises the rising demand for “safe, comfortable, and reliable intercity travel” among Indian travellers and the fact that the budget conscious customer wants more for their money, than what is currently available. More than 80% of Flix destinations in its business are in cities with a population size less than 200,000 people. The network is so planned, that the routes connect important urban and rural regions, as also major mobility hubs and airports over different modes.


In India Tier 1 cities are those with a population of 100,000 or more people, where infrastructure growth has occurred that offers amenities and opportunities. To be an expected alternative to low-cost airlines, trains and individual transport implies #Flixbus will also have to plan on network routes to serve cities outside of Tier 1 cities i.e. in Tier 2 (growing infrastructure) and Tier 3 cities i.e. growing cities with population size between 50k and 99.9k, and 20k and 49.9k respectively) where the demand for travel is on rise. The #Flix’s planned launch in early 2024 to connect major hubs, and later scale its network to the interior of the country, appears to be in line with the market need.


The question remains how fast can the transition take place as development of the EV charging infrastructure is still ongoing. The readiness of EV infrastructure in Figure 1, as shown on the Indian government’s portal (developed by OMI Foundation) in terms of public charging points (status September 2023) indicates different speed of development. For e.g. the southern and western regions are currently more developed than their northern and western counterparts. The regions highlighted yellow indicate between 400 to 1000 public charging points. Regions highlighted in green are those with more than 1000 public charging points.


Areas with inadequate services can be covered through ingenious route planning to meet the passenger demand. For e.g. travellers from Tier 2/3 cities, encounter difficulties while taking international flights for which they need to travel well in advance to airports in Tier 1 cities.



Service definition

With regards to affordability of travel, I have illustrated an example with what an offer currently looks like that #Flixbus may have to match with.


Bus service

A ticket on Redbus for the EV services of #FreshBus  (that started in the year 2023) between Bangalore and Tirupati (ca. 250km) in South India costs (as on 8th January 2024) around 420 INR ca. 4.59 Euro for an Air conditioned bus. The bus, with capacity of 45 persons, takes ca. 5.5 hours, has a charging capacity of 2 hrs (from 0 to 100%) that lasts for 400km. The service provider plans 1000 buses and 100 charging stations by the end of 2026. Further the provider mentions ensuring a rigorous selection and training concept for its drivers.


Other bus companies like #Nuego, #SVKDT, #Greenline travels also operate on this route. Most of these have similar service offers including several pickup points. So practically a door to door transport can be booked from home. Importantly these are noiseless buses (equally important goal for India).


Flight and train services

A low cost economy flight ticket in one direction costs ca. INR 3000 (about 33 Euros) on the cheapest day, and the flight takes 1 hour. A train ticket costs anywhere between 600 – 1375 INR (i.e. 6.60 Euros to 15.20 Euros depending on different air conditioned classes) and 250 INR (i.e. 2.75 Euros non air conditioned). The journey can take anywhere between 5.5 to 7 hours.


Luggage

In Europe the #Flixbus services enable 1 hand luggage (7kg) and 2 check-in pieces per passenger for free (standard dimensions). It is to be seen whether this service is feasible in India.


Potential

Prashant Kumar’s article indicates there are ways to improve service offering e.g. maintaining punctuality and fleet condition, crowd management, training and retaining professional bus crew, flexible network route planning and operations management (changing demand, by passing congestions). Importantly intermodal connections (with rail and flight connections) and maintaining cleanliness at amenities at rest stops will be of importance.


Online booking and partner management

Most service providers offer free for use apps to book tickets. The list includes RedBus, RailYatri, but also other platforms e.g. Paytm, Makemytrip, Yatra. This can also be an opportunity for the tech company #Flix, as there is a large segment of customers who still buy its tickets offline e.g. from travel agents in the vicinity of bus terminals (where the bus route starts or ends). Bringing customers online may be a daunting task but can be rewarding, requiring addressing issues like digital literacy, access to online infrastructure, bypassing the cartel of agents, and multiple payment options etc.


In its partner operations, #Flixbus is expected to collaborate with several partners which it considers as one of its core competences. There are several state road transport corporations to choose from. Search on different websites also shows top private bus operators in the market. E.g. VRL Travels, Shrinath Travels, Neeta Tours and Travels, SRS Travels, HANS travels (source: ComparaBus).


Organization development and service organization

Gaining and retaining customer loyalty will depend on one thing above all else: good customer service. Hence capabilities in professional customer management (including dealing with different cultures), multilingual services and the ability to meet ever increasing expectations will demand continuous attention.


Last but not at least, the developments in technological innovation e.g. for batteries in electric vehicles, related logistics and changing state policies require capabilities to forge and stay ahead in the market.


Conclusion

Hence, there is potential for players interested in offering affordable and sustainable travel in the intercity bus market in India. I hope that the low noise becomes an integral part of sustainable travel. Furtherore, if all bus services train their driving staff, and there is more collective transport, there is also hope of less congestions and accidents in the future.


Do you have views you would like to add/share on this post? What discussions on platforms in passenger transport would interest you? You can write to me here. Stay tuned, there is more to continue in coming days!


*These are author's personal views. The data collection is based on the public sources available on the internet. The author takes no guarantees for this information.


Refer to this article as: Jain, A. (2024a, January 15). Point of view: Digitalization and innovations in energy sector, boosting sustainability in Indian intercity bus transport services. ajps.info. https://www.ajps.info/post/point-of-view-digitalization-and-innovations-in-energy-sector-boosting-sustainability-in-indian-i




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