The Aakhya Weekly #72 | Delhi’s EV aggregator policy: too much too soon?

In the bustling capital city of New Delhi, a great EV transition is underway. The Delhi Government has implemented the Delhi Motor Vehicle Aggregators and Delivery Service Provider Scheme, 2023, which puts vehicular fleets for passenger transport and delivery services on a path to 100% electrification by 2028. The scheme separately sets out annual electrification targets for the next five years for transport and delivery services, and includes two-wheeler, three-wheeler, and four-wheeler categories – each having separate targets. Furthermore, only EVs shall be onboarded in the bike taxi segment from now onwards.

Delhi’s EV penetration and gig economy – what does the data say?

Data from NASSCOM indicates that Delhi’s EV share in two-wheeler, three-wheeler and four-wheeler segment is 0.74 percent, 30.03 percent and 0.16 percent respectively. With numbers like these, it leaves one wondering whether the Delhi Government’s new policy to bring might be a tad coercive. Furthermore, the policy is not fully cognizant of the nuances of the gig economy system, which operates under a completely different paradigm from traditional employment models. While the subject of the policy is EV transition, the intent behind the policy’s licensing requirements is not entirely clear.

The gig economy works on the basis of a principal-to-principal partnership between gig platforms and service providers, or gig workers. The gig worker is not an employee, but a freelance independent contractor who provides transport or delivery services in exchange for a fixed fee. A gig worker usually registers with multiple platforms at the same time, so as to maximise her earning potential. Gig workers use their own vehicles or rent them from third parties. The model provides a good deal of flexibility for the gig worker and a reduced compliance burden for the gig platform. As a result, gig platforms see high number of registrations by gig workers; but also see a high rate of dropouts. A gig worker registered with a particular platform may choose to not clock in for weeks or even months at a time.

Licensing and registration: necessity, or overkill?

Broadly, there are two types of gig work covered by the Delhi Government’s EV transition policy: cab operators and delivery service providers. The Delhi EV policy requires both aggregators and delivery service providers to obtain licenses. The policy does not clearly outline the purpose of such a license, nor the necessity of imposing such a requirement on gig platforms.

The gig work models for transport and delivery services differ from an execution perspective – which needs to be factored in when considering a license regime for the sector. Delivery service providers register with a large number of gig platforms for work, which would entail considerable overlapping between gig platforms. Further, the policy requires gig platforms to register all onboarded electric vehicles. This also does not account for the fact that EV conversion in the city of New Delhi is being facilitated through lease and rental of EVs. Notwithstanding the EV registration policy, gig workers do not necessarily own the vehicles that they use to ply their services. The flexibility accorded to gig workers and the high rates of registration and attrition compound the difficulties for platforms in ascertaining the number of vehicles being plied exclusively for their services, and whether their services are active at a given point of time. From a compliance perspective, it cannot be said that this approach is conducive to ease of doing business. Where gig workers function as independent contractors, it follows logically that a licensing and registration process must be gig worker-centric, rather than platform-centric.

Time frames for implementation and jurisdictional issues

The EV policy also prescribes stringent timelines – ninety days (3 months) to obtain a license and register all onboarded vehicles. In addition, all new bike taxis shall be EVs, effective immediately, while two-wheeler delivery services must achieve 50% electrification within 2 years of the final notification, and 100% electrification within 4 years.

Based on NASSCOM’s data on EV penetration quoted above, it is doubtful whether such ambitious timelines could be achieved. Delhi is still in early days of EV adoption, and although EV charging and battery swapping infrastructure is coming up at a tremendous pace without parallel elsewhere in India, it will still be some time before EV infrastructure becomes adequate to cater to Delhi’s 20 million residents. This is particularly true in the case of gig workers, for whom the transition would involve a considerable expense and who may not be able to cover long distances without adequate charging infrastructure in place.

The policy is also ambiguous on jurisdiction. While the Government of the NCT of Delhi is empowered to make laws for the territory of Delhi, this policy extends to the NCR region, which includes areas from the surrounding states of Haryana, Rajasthan, and Uttar Pradesh – thereby creating possible jurisdictional conflicts over the Delhi EV policy’s application.

The above observations suggest that the Delhi Government might need to review the timelines in this policy, and to prescribe more relaxed transition norms that are conducive to a smooth transition to sustainable transport modes for gig workers and citizens at large. To that end, it might be useful to consider the level and rate of EV adoption in Delhi, in tandem with the charging infrastructure and battery facilities, before pursuing hard targets for electrification.

Top Stories of the Week

ADB backs India’s urban reform agenda

The Government of India has signed a $400 million loan agreement with the Asian Development Bank (ADB) for Sub-program 2 of the Sustainable Urban Development and Service Delivery Programme. The endeavour focuses on advancing the urban reform agenda by developing top-notch urban infrastructure, enhancing service delivery, and supporting investment plans and reforms at the state and urban local body (ULB) levels. It aligns with the union government’s urban sector strategy, emphasizing reforms to make cities more liveable and key contributors to economic growth.

The initiative is geared towards fostering comprehensive urbanization and controlling urban sprawls by strengthening the legal, regulatory, and institutional ecosystem. The focal point rests on empowering ULBs to spearhead the modernization of building bylaws, land pooling, urban agglomeration, and urban mobility planning through transit-oriented development, enabling cities to become economic hubs.

Furthermore, cities will be motivated to establish creditworthiness by implementing reforms aimed at enhancing efficiency, streamlining expenditures, and ultimately boosting income streams, including property taxes and user charges. Consequently, these initiatives will empower cities to explore innovative financing avenues such as commercial loans, issuance of municipal bonds, sub-sovereign debts, and public-private partnerships to address substantial shortfalls in urban infrastructure.

Empowering education: NITI Aayog’s push for school merger

NITI Aayog’s recent report recommends merging small and low-enrolment schools with nearby schools to improve education outcomes in India. About 50% of primary schools have less than 60 students, leading to inadequate infrastructure, lack of accountability through community engagement, and burden of administrative responsibilities on teachers.

In response to the evolving focus on quality education since the enactment of the Right to Education in 2009, NITI Aayog launched the SATH-E project in 2017 across Jharkhand, Odisha and Madhya Pradesh. It implemented interventions such as school consolidation, remedial learning interventions, and teacher capacity building. 5 years after the launch of the project, NITI Aayog’s has released a report highlighting the outcomes of such measures. By consolidating around 41,000 schools, Jharkhand saved Rs. 400 crores due to reduced resource requirements. Madhya Pradesh and Jharkhand saw significant increases in principal and subject-wise teacher availability. Odisha also released a policy on school mergers for transparency.

The successful outcomes prompted NITI Aayog to advocate for other states to follow suit. Additionally, aligned with the grouping mechanism recommended by National Education Policy, 2020, the report suggests establishment of large integrated K-12 schools with transport facility to ensure equitable access. With thoughtful execution of such measures, scarce resources in the education sector can be used much more efficiently.

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