[NGW Magazine] India's Gas-Guzzling Ubers
Uber, a disruptive business model, is poised to disrupt things further, investing in filling-stations for its taxis in some of India's largest cities, trading on the lower cost and the environmental friendliness of gas.
Ride hailing company Uber sees the transportation sector having enormous potential to drive gas demand in the Indian economy and the company plans to take its partnership with Gail Gas nationwide. This will include cities like Hyderabad and Kolkata, a spokesperson for Uber told NGW via email July 4.
“Not only is CNG the cleanest of the transportation fuels, with significantly less carbon emissions, but it is also much cheaper than either diesel or petrol. Realising the importance of natural gas as a transport fuel, the government has accorded high priority to CNG in domestic gas allocation and has decided to meet 100% demand of CNG sector through supply of domestic gas. Uber remains committed to intensify efforts for adoption of CNG in our cabs and offer the citizens of the country smart and sustainable mobility options,” the spokesperson said.
Air pollution in Indian urban pockets has been a persistent problem for years now. To tackle this issue the government is promoting the usage of gas in variety of sectors, transportation being a very important one. India is looking to increase the share of gas in the country’s overall energy mix from 7% at present to 15% in the next few years.
Taking Gail Gas partnership pan-India
Last month, Gail Gas, a city gas distribution (CGD) unit of state-owned Gail, and Uber signed a memorandum of understanding to boost clean transportation fuel in India and use CNG across various cities in India. As part of this partnership, termed Hasiru Bengaluru or Green Bengaluru, Gail Gas CNG stations and Uber will promote the adoption of cleaner fuels like CNG in Uber cabs. In the first leg, the initiative is being rolled out in the southern India city of Bengaluru. Uber and Gail Gas now plan to extend this partnership to cities like Hyderabad and Kolkata.
Filling station (Credit: Gail)
“We believe that ridesharing technologies like Uber can play a key role in reducing private car ownership and promoting shared mobility. In Delhi, pursuant to the Supreme Court’s mandate, all vehicles on Uber run on CNG and in most other cities, especially Mumbai, we encourage the adoption of CNG amongst our driver partner community,” the spokesperson said.
When asked why Uber and Gail Gas chose Bengaluru to kick off the initiative, the spokesperson said that while ridesharing continues to see a significant upswing year on year across all Indian cities, Bengaluru has adopted ridesharing through the UberPOOL feature. The city has seen the highest number of pool trips taken so far, which helped save 2.5mn litres of fuel and 5.9 metric tons of CO2 emissions. “Thus, it was natural for us to choose Bengaluru to implement this programme,” the spokesperson said.
CNG offers financial benefits to drivers
In addition to having a positive impact on environment, switching to CNG can also be financially beneficial for drivers. According to Uber, CNG presents an affordable and environment friendly alternative compared with liquid fuels such as petrol and diesel. The cost of CNG in Bengaluru is rupees 51.27/kg ($0.7/kg) and for vehicle owners, this can result in savings of around 60% over petrol, 50% over diesel alternatives and about 45% over auto LPG. For budding and current driver partners on Uber alone, use of CNG is expected to create monthly savings of up to rupees 15,000.
“Through this partnership with Gail Gas, we aim to help drivers realise more value from their effort and assist them in their financial planning decisions around choice and type of vehicle to maximise returns,” the spokesperson said.
As part of the agreement, Gail Gas will provide free CNG to the first 500 cars joining under the program, capped at a maximum of rupees 10,000/car. Gail Gas will be extending coupons to each of the participating Uber driver partners for rupees 2,500/month for the first four months. Uber intends to roll out the relevant details and provide easy access to all the information to its driver partner community through a variety of communication channels.
Uber will provide a joining award of rupees 10,000 to the first 500 CNG cars owners driving with the platform. The company will, in turn, create awareness among its driver partner community on the benefits of CNG through several channels. In order to promote cleaner fuel vehicles, Gail Gas and Uber will also be leading conversations with OEMs, auto dealers and retrofitters.
Focus on infrastructure building
Although CNG has been used as transportation fuel in taxis, buses and autorickshaws in cities such as Delhi and Mumbai for years, it has been not able to achieve the same level of success in other cities. The biggest reason for this has been lack of adequate number of CNG fuelling stations. Even in Delhi and Mumbai there are not enough CNG stations and long queues of taxi cabs and auto rickshaws are ubiquitous. Might this become a challenge for Uber and Gail Gas as well in successfully implementing the programme in Bengaluru? Uber says sufficient stress is being put on building adequate distribution points.
The Gail Gas CNG station inaugurated recently at KIADB Hardware Technology Park, near Bengaluru airport alone has a capacity to fuel about 1,000 vehicles/day. The station has two compressors with 1,200 m3/h capacity each and four dispensers for refilling cars and auto rickshaws. These dispensers have the capacity to refuel eight vehicles simultaneously at any time.
To further optimise uptake of CNG and improve accessibility to the fuel for Bengalureans, Gail Gas is also making CNG available through retail outlets of other oil marketing companies, the Uber spokesperson said. There are six CNG stations operational at Laggere (Prem Nagar), APC Circle (Jigani), Peenya Industrial Area, Sungadkatte, Bommasandra Industrial Area in the city. During the next six months more CNG stations are expected to come up at Agara, KR Puram, Goravigere, New Airport Road, Tata Nagar and Sarjapur Road, among others.
“Overall, to cater to the demand and facilitate a strong ecosystem, 20 new CNG stations are expected to be operational by March 2019. The locations of these CNG pumps have been determined on the basis of insights shared by Uber from its data and driver partners in the city. This will help address CNG demand in the city,” the Uber spokesperson said.
Shardul Sharma