Over the last decade, India has established itself as one of the fastest growing economies in the world. Along with an annual GDP growth rate of 7.1 percent, the country is adding over 12 million people to the workforce every year. Coupled with this development, the country’s mobility needs are also growing exponentially.

To keep pace with increasing demand, WRI India Ross Center, with support from FedEx, has launched the Better Bus Challenge. The goal is to harness private sector innovations in improving commutes and connectivity for public transit systems.

The public transit system, as it stands, could use a bit of a refresh.

Bus-based public transport in India is operated by 62 government-owned State Transport Undertakings. While the system serves over 70 million people daily, cities around the country are burdened with extreme traffic and congestion. If you are among the 70 million, chances are you don’t think very highly of our bus systems.

Owing to multiple financial and technical challenges faced by Indian transit agencies, urban bus capacity and service upgrades have been limited. Only 18 percent of all work trips made in the country are on public transport. Since 2001, the country has seen a seven-fold increase in the number of registered vehicles, owned by a mere 11 percent of all Indian households, the majority of which are concentrated in cities. The proliferation of private vehicle ownership has, in turn, subjected public buses to congestion and delays, affecting their reliability and attractiveness.

The private mobility sector, on the other hand, has seen a huge boom over the last few years, with no less than 250 new mobility start-ups registered every year since 2015, from ride hailing services to bike sharing companies. According to a report published by Tracxn, $3.6 billion has been invested in mobility start-ups in 2017 alone. Additionally, 15 out of 62 transit agencies across the country have invested millions of dollars into setting up “intelligent transport systems” to improve service efficiency and operations.

Public bus operators can harness this innovation in at least three ways:

1. Make Optimal Use of Transit Agency Data

Globally, most city bus systems are operated and maintained using a digital data backbone to make them more efficient, reliable and cost effective. While digitization of the public bus system in India has been slow, certain cities with established intelligent transport systems have already started to see improvements. The Mysore Intelligent Transport System, for example, has improved service reliability, with 90 percent of all trips departing within five minutes of the scheduled time compared to 27 percent in 2012. This has led to reduced wait times for commuters and improved perception of the bus system.

2. Make Public Transit User Friendly

Congestion is costing over $22 billion annually in Bangalore, Mumbai, Delhi and Kolkata alone. There is a dire need for transit agencies to take the lead to make public transit more attractive and catalyze a shift from private modes. Leveraging the value of the data they collect, cities around the world have improved ridership and enabled greater integration between modes. For example, Transport for London estimates that the city’s transit planning apps, such as CityMapper, have result in time savings for commuters amounting to £116 million ($153 million) annually.

3. Leverage the Potential of New Service Models

In India, the state operates some 140,000 buses every day. The country will require an additional 460,000 buses by 2031, assuming existing ridership levels. While the government is doing a lot to invest in and increase the capacity of metro and bus systems across the country, significant physical infrastructure is required to meet the growing demand and achieve global commuting standards.

In a recent report, WRI India found that transit agencies have the potential to improve their efficiency by embracing the new business models of private on-demand players in the city. The different models of engagement allow transit agencies to go asset-light by adopting licensing and leasing models of vehicles and software, thereby eliminating the cost of ownership, operation and maintenance of the system. Such engagements would not only help agencies cater to various strata of the population, but also promote data-driven decision-making within the transit agency itself. This will, in turn, lead to optimized routes, improved scheduling, and fleet and crew management.

With the world investing in India’s mobility ecosystem, it is in the best interest of bus agencies to keep an eye on innovations that emerge and adopt these as a step toward transforming public bus systems. That’s where the Better Bus Challenge comes into play.

To learn more about the Better Bus Challenge visit WRICitiesHub.org.

The original version of this blog appeared on WRI India.

Krithi Venkat is a Research Consultant at WRI India.