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The Uberization of national transport

LiveMint logoLiveMint 21-02-2017 Rahul Matthan

Early e-commerce companies struggled in India, not so much because they had to build a market for their services, but because India didn’t offer them the kind of robust infrastructure that they needed to support their business. The fact that e-commerce has, today, insinuated itself into so many aspects of our lives is a tribute to the efforts of those pioneers in building, from scratch, an ecosystem of ancillary services where none existed before.

These ancillary operations that were built to support e-commerce have since developed into independent businesses in their own right, utilizing the scale they built on the back of the e-commerce boom to service a variety of new businesses across multiple verticals. The best example of this evolution is logistics, an industry that has advanced so far beyond the courier operations to which it owes its origins, as to be completely unrecognizable.

As recently as two years ago, courier businesses could, at their efficient best, do no better than offer customers next-day delivery of packages within the city.

Parcels were collected from customer locations across the city, carried to a central hub where they were sorted in the evening and made ready for delivery the next day.

Today, logistics companies use hand-held GPS devices, cloud computing and machine-learning algorithms to efficiently route deliveries to their final destination. These systems power concierge services that fulfil our trivial errands and urgent desires and ensure that the medicines and fresh produce that we order reaches us in time and without error.

They leverage the power of mobile technology, always-on connectivity and the ubiquity of the cloud to solve complex route optimization problems in ways that were simply not possible before.

As a result, many of these services can perform complex feats like collecting an appetizer from one restaurant, the entree from another and still deliver them both to our doorstep at the same time, piping hot.

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Intra-city logistics is just a tiny sub-set of the larger transportation industry. It is dwarfed in size and scale by inter-state transport—the segment of the industry that comprises fleets of trucks that ply the length and breadth of our national highway network, carrying goods of all descriptions from one part of the country to another.

Inasmuch as intra-city logistics companies have embraced and been transformed by technology, inter-state transport companies seem to have been left largely untouched by it. Truck drivers still drive their rigs across vast distances, living their lives on the road, far away from family and friends. If technology has touched their lives, it offers them nothing more useful than a log of their progress towards their destination.

It’s hard to comprehend why technologies which have proven so successful in managing movement within the city, are not being deployed for the journeys between them. Why, for instance, do truck drivers still have to transport the same cargo trailer from the origin of the journey to its end. Would it not be more efficient if trailers were designed to be transported using a hub-and-spoke model where trucks move trailers from one hub to the next instead of all the way across the country. This will result in less idle time for the trailers, will allow truck drivers to drive shorter distances over routes they know well, thereby maximising efficiency and safety.

If nothing else, it will allow them to spend more time with their families.

For this to truly work, technology needs to play a crucial role. We already have algorithms that we know are capable of tracking consignments in real time, coordinating their collection and delivery between specified geographical coordinates. It should be trivial to modify these algorithms so that they can match trailers with available drivers and precisely coordinate hand-offs so that truckers are able to collect their return consignment within the optimum time of dropping one off.

It is clear that the technical challenges around this model are easily surmountable. What comes in the way is, not surprisingly, our regulatory framework.

Indian law requires, for reasons I cannot fully fathom, that any trailer that is attached to a truck must bear the same registration number as the truck. This makes it impossible to deploy a hub and spoke model as this model relies on trailers being capable of being detached from one truck and attached to another at each hub throughout the journey. And while urban entrepreneurs may be so bold as to bend the law if it suits their new business model, taking such liberties out on the state border requires a different kind of courage.

However, if we truly want to think about transforming our national transportation infrastructure, we’d do well to re-visit some of these vestigial regulations.

Rahul Matthan is a partner at Trilegal. Ex Machina is a column on technology, law and everything in between.

His Twitter handle is @matthan.

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