BMTC Set To Upgrade Ticketing System, Introduce Support For NCMC Soon

Commuters of Bengaluru have reason to cheer. The Bengaluru Metropolitan Transport Corporation (BMTC) has announced an upgrade to its ticketing system to enable payments using the National Common Mobility Card (NCMC) that has been a demand from the public since its younger sibling, the Bengaluru Metro Rail Corporation Limited (BMRCL) enabled it in 2022-2023.

In a report titled Tap, scan, go: BMTC launches smart ticketing across fleet in the Bangalore Mirror, it has been reported that digital payments made up close to 20 per cent of the corporation’s daily ticket revenue, driven by its static QR Code payments system. Interestingly, in another report titled Payment failed, Bangalore Mirror reports that UPI is not a preferred option in sub-urban, semi-urban and rural parts of the city due to connectivity issues leading to people preferring to pay cash.

As per the first report, BMTC is looking at getting Android-based ‘Smart’ Electronic Ticketing Machines (ETMs) which is kind of suspicious, since the existing machines in use are Android-powered Pine Labs machines. However, a contradiction is observed in the next paragraph, where it says that the ETMs are already in use. The demand for NCMC integration however is due to the fact that BMRCL is already using them and keeping this in mind, it would be fair to assume that BMTC won’t make the mistake of going for an ‘exclusive NCMC‘.

The ticketing upgrade will also upgrade the BMTC’s vehicle tracking capabilities, building on its Automatic Vehicle Location System (AVLS). While not reported, integration into mapping platforms using the General Transit Feed Specification (GTFS) is also a likely outcome.

Another change expected as part of the upgrade is the introduction of dynamic QR codes. Interestingly, in an report published by The Hindu, there was a demand for the existing static QR code system to continue, but the demand was for conductors to carry the QR Code as a badge as it was difficult to scan the QR Codes on the walls on the bus. In all fairness, the existing setup works perfectly and both, asking the conductor to carry it or a Dynamic QR code will merely make things more difficult.

Let us see what happens. Interestingly, BMTC in 2017 had partnered up with Axis Bank to establish an EMV open-loop payment system, nearly two years before the NPCI launched the NCMC framework It was quickly phased out a year later.. Among other factors, it was reported by Christin Mathew Philip of MoneyControl in 2024, that BMTC with a daily ridership of 38 lakh was not keen on accepting the Namma Metro NCMC because BMRCL had a ridership of 7-8 lakh. A rather deluded argument, if you ask me, but I sincerely hope that this does not give the administration any ideas to go in for an exclusive NCMC. Karnataka was the after all the first state in India to introduce electronic ticketing on 15 August 2004.

Featured Image: Conductor selling tickets with a Ticket Machine (Image animated using Grok/xAI)

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Spotted: Chennai’s Ashok Leyland AC Electric Buses On Trial In Bangalore

A month ago, I had spotted BMTC running trials using JBM’s Electric Bus fleet on Bannerghatta Road. In that post, I had also mentioned that BMTC had received bids from Veera, Ashok Leyland, and Olectra for trials of electric buses under the Centre’s FAME programme. Now while Olectra and JBM’s buses are popular across the country, the only city that used Ashok Leyland (AshLey) EVs was Chennai’s Metropolitan Transport Corproation (MTC). Launched by chief minister Edappadi K Palaniswami in 2019, the buses are 9m long midi-buses and are completely air-conditioned.

Today, I spotted one of these buses on trials with the BMTC on Bannerghatta Road. Below id the image of the bus.

Ashok Leyland AC Electric Bus on Bannerghatta Road (Srikanth Ramakrishnan/BESTpedia via Wikimedia Commons)
Ashok Leyland AC Electric Bus on Bannerghatta Road (Srikanth Ramakrishnan/BESTpedia via Wikimedia Commons)

Ashok Leyland had tied up with Swiss-Swedish ABB Group to manufacture electric buses. I had interestingly, blogged about this back in October 2016; do read it here.

That’s all for the time being. This is really just an update, not more.

When you step out, please do take appropriate precautions.

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Spotted: JBM EcoLife Electric Bus On Trials With BMTC

While walking along Bannerghatta Road, I happened to spot a bus that seemed odd. At the first glance, it looked a lot like the Tata Starbus Hybrid Diesel-Electric bus that BEST operates in Bandra Kurla Complex (BKC). As the bus came closer, I noticed that it was not a Tata bus, but rather a JBM bus.

Here is the picture of the bus that I snapped.

JBM EcoLife Electric bus on trials with BMTC on Bannerghatta Road (Srikanth Ramakrishnan/BESTpedia via Wikimedia Commons)
JBM EcoLife Electric bus on trials with BMTC on Bannerghatta Road (Srikanth Ramakrishnan/BESTpedia via Wikimedia Commons)

The bus is a JBM EcoLife Electric bus, bearing a green number plate with a Mathura (UP-85) registration, presumably because JBM has a bus manufacturing plant at Kosi Kalan, Mathura.

According to JBM’s page on the bus, the JBM Solaris EcoLife has two models, a 9m and 12m one. This is presumably the latter. Both have an 80-160 KW motor powered by a Lithium battery. It can be charged either with a plug-in mechanism or a pantograph. The bus features two inswing doors, one at the front and one in the centre, and features a manually operated wheelchair ramp.

This is the second time BMTC is trialing electric buses, the last one being the BYD Utopia in 2014. Cities in India are moving towards electric vehicles under the Modi Sarkar’s Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme.

In 2015, BMTC had trialed a diesel-powered bus manufactured by Japan’s UD, a subsidiary of Sweden’s Volvo AB. Here is a snap of that too.

Volvo UD SLF on trials with BMTC (Srikanth Ramakrishnan/BESTpedia via Wikimedia Commons)
Volvo UD SLF on trials with BMTC (Srikanth Ramakrishnan/BESTpedia via Wikimedia Commons)

Coming back to electric buses, BMTC operated the BYD Utopia for about 4 months in 2014 but deferred purchasing it due to the high price tag of ₹2.5 crore attached to it. In October, The Hindu reported that BMTC was receiving buses from Olectra, JBM and Ashok Leyland for trials. It also received bids from Veera Vahan Udyog. Veera is a Bangalore-based manufacturer of buses that has supplied a significant amount of BMTC’s Suvarna and JnNURM buses back in 2009. It has also been manufacturing three-door buses to take on the German Contrac Cobus 3000; some of these can be spotted at Kempegowda International Airport, operated by GlobeGround. Veera is also setting up a plant in Ananthapuramu (Anantapur), Andhra Pradesh to manufacture 3,000 electric buses a year. As reported by Bangalore Mirror, JBM is the lowest bidder to supply 90 buses.

Other cities that currently use JBM buses include Navi Mumbai. The Navi Mumbai Municipal Transport (NMMT) undertaking operates the blue-coloured 9m JBM EcoLife E9 bus, mostly along AC-105 from CBD Belapur to Bandra Railway Station (West).

Also; Did You Know CoEP Has A PG Diploma In Metro Rail Tech And Electric Mobility?

If you intend on stepping out, don’t forget the basics: A mask and sanitizer.

           

Featured Image: JBM Solaris EcoLife.

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Check Out Some Cool Footage Of Bangalore’s Pop-Up Cycle Lanes

Last month I had posted about the BMTC installing cycle racks to the front of their buses. I had also mentioned that the BMTC and BBMP were setting up dedicated cycle lanes across the city including a pop-up cycle lane along Outer Ring Road next to the existing pop-up bus priority lane.

Thanks to Twitter user Nihar Thakkar (@Nihart1024), I got to see some of the work being done. Here are some images and videos of the cycle lanes.

For starters, here is a cycle parking stand under the split flyover at Agara Junction on Outer Ring Road.

This is on the Service Lane of ORR near the junction of the road bound for Whitefield. You can see the under-construction section of the Purple Line bound for Whitefield.

Here is a video of the section in question.

Here is a picture of a cycle lane built as part of the TenderSURE program in Central Bangalore.

And now, getting back to Outer Ring Road, some imagery of the lanes being installed.

Sadly, BBMP is using plastic reflective bollards. These bollards are pretty flexible and can easily be damaged. Someone on a joyride in the middle of the night can just mow down these bollards. I do wish, more sturdy ones or even a fence similar to the one that NHAI uses to separate the service lanes from the main carriageway on Hosur Road was used.

Here are videos and images of the cycle lane.

And here is a video of Nihar cycling on the Cycle Lane!

Since the Cycle Lanes are separated by bollards, the likelihood of people parking their cars on them is limited. Also, since they are on the right hand side of the service lane, it is on the side of the road where nobody would (hopefully) park. I sincerely hope that BBMP replaces any damaged or removed bollards to prevent cars from entering these lanes and also does something to prevent motorbikes from entering these lanes. I also hope the cycle lanes don’t disappear when the road is resurfaced (as it happened in Jayanagar) and that BBMP will maintain a uniform quality for the road surface.

That being said, I hope pedestrian infrastructure is next in the pipeline.

Bums on the Saddle, everyone!

Also Read:

Reclaiming The Pavement For The Pedestrian: Ten Ways To Implement This by Srikanth Ramakrishnan on Swarajya

How Pune Plans To Cycle Into A Smart City by Srikanth Ramakrishnan on Swarajya

Featured Image: Cycle Lane on Outer Ring Road by Nihar Thakkar

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BMTC Sets Up Cycle Stands On Buses, To Set Up Cycle Lanes Along Outer Ring Road

Going a step ahead in trying to make Bangalore a friendlier city for cyclists, BMTC has installed cycle stands to the front of their buses.

Managing Director of BMTC C Shikha said that the fabrication of the stand was done by employees at BMTC’s Central workshop at Shanthinagar. In a report for Times of India, Christin Mathew Philip says that the BMTC also plans a pop-up cycle lane for 16 km between Central Silk Board and Lowry Medical College where a bus priority lane has also been marked.

Here is what the new cycle racks look like.

This is the second time that the BMTC is experimenting with cycle racks on buses. The last time, Volvo had installed cycle racks on a few Volvo 8400 buses operated in and around Whitefield in 2011 but the experiment fizzled out after a while.

Apart from buses, Namma Metro too allows cyclists to carry their cycles on metro trains but only foldable cycles that can pass through the scanner ae allowed.

In a report for The Hindu, BMTC Chairman N.S. Nandiesha Reddy said that while 100 buses would initially be fitted with cycle stands, it would eventually be extended to the entire fleet.

Bangalore has experimented in many forms to get people to start cycling.

Between 2011 and 2012, the city partnered with Kerberon Automation to set up cycle stands across the city to promote the concept of rented cycles. Fixed cycle stands were set up in core areas (such as the Brigade Road bus stop where G-4 starts). Users would have to pay a deposit, get a smart card and then use the cycles. Around the same time, cycle lanes were made available in localities such as Jayanagar by demarcating the outermost section of major roads as cycle-only. However, these lanes were mostly used to park cars – which although a punishable offence was rarely punished. Eventually, they vanished, either after being dug up to lay utilities or when the road was resurfaced and the cycle lanes no longer marked.

By 2018, dockless cycles from private players such Yulu, Zoomcar PEDL and Ola Pedal had found a market in the city.

Let’s hope this time, the city learns from its past mistakes and promotes cycling in a big way.

Also Read: Emission-Free Last-Mile Connectivity: Why Bengaluru Must Build Safe Cycle Tracks Than Go After Pod Taxis by Srikanth Ramakrishnan on Swarajya.

P.S: If you’re planning to cycle around, do consider wearing a good mask. I’ve personally tried the 3M Aura Particulate Respirator to work well. It complies with NIOSH N-95 standards. Do check it out below. You can also try out the Savlon one if 3M masks are out of stock (which they are most of the time). Savlon is a good brand, owned by ITC (earlier Johnson and Johnson). Alternatively, you can try Wuerth, which was the first FFP1 standard mask that I tried.

          

Featured Image: Cycle Rack on a 500-D by Nihar Thakkar.

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BMTC Finally Starts Cashless Ticketing, Uses UPI-Based QR Codes For Transactions

Last month I wrote on how we needed to look at changing our ways of transacting in order to reduce the risk of contamination using physical currency. One of the points I had made was to target the transit sector in order to get people opt for cashless transit.

Many of of us expected the 2016 demonetisation to be the catalyst for a shift to cashless methods of travel, sadly it did not take off well. A year later, the situation was no different in adoption of digital payment systems in public transport.

In September 2018, the Central government finally announced the launch of the ‘One Nation, One Transport Card’, a rebadged version of the previous government’s long-dead More Card project. The National Common Mobility Card (NCMC), was finally launched on 5 March 2019 (also my birthday) but is still being rolled out and as of now is only available on the Delhi Metro.

Older readers of BESTpedia would remember that I had spoken to BMTC officials in 2016 on their Intelligent Transport System (ITS) and the impending release of a prepaid card for buses (similar to what Mumbai’s BEST has). While the smart cards were never a part of the ITS, they were due to be released by the end of 2016 but that did not happen.

The Times of India on 27 May reported that BMTC would implement a new measure to enable cashless transit in its buses. While initially implemented on 70 buses, it is now being expanded to 1,000 buses of the 3,500 buses that are currently on the streets.

The cashless ticketing system, however is not what most of us expected.

Each bus is equipped with a quick response code (QR Code) that is compliant with BharatQR and uses the Unified Payments Interface (UPI) to make payments. Passengers can use any UPI-based app such as Paytm, Google Pay, or PhonePe to complete the transaction and once the transaction is done, the conductor issues a ticket.

Here is an image of the conductor with the QR Code handing around his neck.

It is important to note here that the QR code based payment isn’t direct cashless ticketing, but rather a cashless transaction after which the ticket is issued manually. It isn’t similar to the QR code based ticketing used by the Indian Railways using the UTS app, or by Metro Rail systems in India. The latter uses QR codes on phone screens or paper tickets that are scanned at the turnstiles rather than the commuter scanning them with their phones.

While this is a good move in the interim, it would be good to see BMTC implement a full-fledged card-based payment system, on the lines of the NCMC.

The unintended side-effects of this move

The QR code idea, however has its merits. The direct consequence would be more people adopting UPI as a payment method over physical cash systems. Commuters using UPI would mean that anyone remotely connected to the BMTC network –from a food vendor at the bus station to a tea stall frequented by staff – would start accepting UPI as a payment method. The entire “Local Economy” would end up making use of it over time.

All in all, this is a much-needed push by BMTC. The next stop would be a complete integration on to the NCMC so that we can go truly cashless. Who knows, the next big thing may be transcos accepting USSD-based payments as well. Alternatively, BMTC needs to push for app-based payments, similar to what Ridlr offers for BEST where a user purchases a ticket with the app which in turn generates a four to six digit number. The commuter tells the number to the conductor, who validates it with the ETM.

BMTC finally goes cashless, and how.

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Bangalore Needs To Do Something About Its Connectivity For Schools

Have you ever woken up at 7am during a weekday to all the honking around you on Bangalore’s roads? There is severe congestion, with cars, autos, cabs, BMTC buses, private buses, the dreaded two wheelers and more. But have you ever wondered about what is the real cause of all the traffic congestion? School buses.

Yes, you read that right. It’s the school buses that are the root cause of the traffic jams in the morning. But why is that the case?

A lot of the new schools in Bangalore are located far away from the city. While some are located on main roads, they’re still located in the outer fringes of the city with many of them located in remote hallis around the city. Don’t believe me? Look up the locations of Podar or Kumarans, both of which have numerous branches located far from the city. A decade ago, I did walk up to some of them, and today I can say that not much has changed in terms of connectivity. There are hardly any BMTC buses that go there. The only way to get there if you miss your school bus is to either get your parents to drop you, or to get there by cab. The latter is becoming increasingly difficult due to a scarcity of cabs on Bangalore’s roads.  

Now why is this an issue?

The core issue here is that it burns a hole in people’s pockets. What if the school bus is late? Or more importantly, what if the school bus is too expensive. I’ve known many a classmate in my childhood (in Mumbai) who have travelled in a BEST bus for a third of the cost that the school bus charged. At the same time, it builds independence in children from a young age (I started travelling alone in buses at age 9) which is crucial for a child’s self-development. Indian parents tend to shelter their wards for too long, which results in them having troubles adjusting when they leave their homes (yours truly included).

How can this be rectified?

The first step would be to have schools not make it mandatory to use a school bus. While many schools do allow other modes of transport, these are relegated to unlicenced vans and minibuses that generally tend to operate illegally under the Motor Vehicles Act. The next step would logically be to get BMTC to ply more buses to these regions. As BMTC services improve, so will the locality. It’s a simple case of long-term demand and supply. Of course, in the interim, BMTC will have to look at fixing their fleet for it is uncommon to see buses with seats falling off or metal strips protruding out from somewhere.

Back in the day, using public transport was necessary to go from home to tuitions, and more. With integrated courses in schools becoming the norm, it becomes a little redundant. But getting children to take up public transport, is an important thing.

As far as subsidies for students are concerned, BMTC seems to be doing a fairly good job at that. BMTC lists out the rates for its passes, going up to a maximum of ₹1,100 for high school students. Of course, this seems to be for a single route. Back when I was a student, it was roughly ₹1,200 a year for a single route pass and ₹2,800 for an all route pass that was valid on all buses except the AC Volvo fleet.

Apart from this, BMTC also needs to actively work on setting up proper marked bus stops. The city – outside of the core areas – lacks proper bus stops. They’re often junctions or marked by obscure or nondescript boards. Even in core city areas, where bus shelters exist, buses do not stop there. BMTC first needs to enforce discipline. BMTC can even take some inspiration from BEST and induct a fleet of mini-AC buses. BEST’s new fleet has been a hit with passengers, and has already got auto-rickshaws up in arms in Andheri. Given how the auto-rickshaw scene in Bangalore is, the impact here will be much much greater.

What do students currently use apart from institution vehicles?

That’s pretty easy to guess, right? The preferred choice is UberPool and OlaShare. Back in the days when I used to work in Bangalore, pooling/sharing was the only way to get to work (it was initially cheaper than taking three buses to work). Of course, my journeys were often delayed because Google Maps considers Bangalore and Boston to have a similar road structure (more on this later) and would often send me back half way to pick up a student at Christ University only to drop them off a kilometre away at one of the numerous hostels in the vicinity.

Slowly, this gave way to Bounce, a two-wheeler rental service. Residents of the IT city would have noticed their yellow coloured Activas parked outside of many a metro station. Bounce operates using an app – much similar to Yulu and Zoomcar PEDL for cycles – and allows users to park a bike a recognised parking location and end the trip. Then, someone else can pick up the vehicle. So popular is Bounce that several housing societies (including mine) banned users from parking vehicles inside the compound due to strangers coming to pick them up.

However, two-wheelers are dangerous. A 2018 Hindustan Times report said that two wheeler users, especially women, were the most vulnerable on the road in Pune, a city whose traffic discipline (actually lack of), rivals that of Bangalore. Now, do we really want out kids to die on the street so easily? More importantly, despite them being shared vehicles, they’re still adding traffic to the streets. Back in 2013, the ACP of Bangalore Traffic Police, B Dayanand had said that it was two wheelers and not their four wheeled counterparts that were responsible for the city’s constantly rising traffic congestion.

Buses are good, yes please

Buses are a far better way of commuting. They are safer, and less polluting (per user, not per vehicle) and give commuters some peace of mind. After all, the person navigating thru the madness of rush hour isn’t you but an experienced driver. Why not tell our kids to do the same? With over 45,000 students getting admitted to colleges under Bangalore University every year, that’s a huge demographic to be tapped.

This article is the first in a series of articles relating to schoolkids and collegekids.

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Uber Movement: Can it help us solve our Transport Problems?

Uber recently debuted its new Platform, Uber Movement (http://movement.uber.com) which will offer users access to its traffic data.

According to Uber’s blogpost on the same, Movement is meant to be a website that uses Uber’s data to help urban planners make informed decisions about our cities.

Now this might actually work out to be the best thing to happen to us!

Let us take Mumbai and Bengaluru as an example.

Both BEST and BMTC and an eTicketing system and an ITS with a vehicle tracker in place. With these two systems, the transco is able to:

  • Place the bus on a map.
  • Compute the number of tickets sold on different stages of different bus routes.
  • Superimpose the two onto a single dataset to identify where maximum passengers are and and what time. Using this data, one can come to the conclusion of time taken between two stops, and what time people are more or most likely to catch the bus.

Now, what can Uber’s data add to this dateset:

  • Average traffic conditions. While this can be ascertained using the Vehicle Tracking in Buses as well, Uber’s data is bound to be a little more accurate.
  • Alternative routes between two points. Since Uber relies on Google Maps for its navigation, it normally is able to plot multiple routes from Point A to Point B. This data can be used to launch additional bus routes.

The purpose of a Public Transport Undertaking like BEST or BMTC using Uber Movement’s data is to provide streamlined traffic flow.

Now let us take a real-world example:

Bengaluru

Building up on a previous post (Stuck in Traffic: How I Might Have Averted a Major Jam), let us assume that one would have to travel between Arekere Gate on Bannerghatta Road and the junction of 5th Main and 17th Cross in HSR Layout. As discussed earlier, there are two main routes. Traffic data from Google, Uber and BMTC’s ticket sales would be able to place things on a map. Since BMTC does not have a smart card system in place, it would be difficult to ascertain if the passengers disembarking at Jayadeva are taking a bus towards HSR Layout. If it did have a Smart Card system, or load passes onto an RFID card, this could be ascertained easily.

BMTC can then, based on traffic movements and passenger loads, introduce minibuses between Arekere and HSR Layout via Bomanahalli during peak hours.

Mumbai

Here, let us assume that one has to travel from Cadbury Junction, Thane to SEEPZ, Andheri.

Buses have two routes. Some of them like AS-422 take the Cadbury Junction-Marathon Chowk, Mulund Check Naka, Bhandup, Powai Route. Some, take the direct route by continuing on the Easter Express Highway and taking a right turn onto the Jogeshwari Vikhroli Link Road and then proceeding on to SEEPZ. Uber Movement can help BEST figure out when there is maximum congestion, and using its dataset on how many passengers and where they travel from and to, plan a more optimal route.

 

At the end of the day, Uber Movement is nothing revolutionary, it is merely Google Maps with a little more data, but more data is good for all of us.

What Uber Movement will certainly help us with is planning of land acquisition for newer transit projects, wider roads, metro lines, et al. But those are capital intensive projects. Newer bus routes would be the first step to implementing a full-scale transformation project. It will help make the city’s people smart, irrespective of whether city itself is smart or not.

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USSD Bus Travel: Is it worth a try?

Last week, I wrote an article on Swarajya about a little known Banking System that exists in India: USSD Banking, aka the National Unified USSD Platform (NUUP) that allows anyone with a basic GSM phone to perform financial transactions. You can read the article here: No Smartphone? You Can Still Transfer Money Using A Basic Mobile Phone

A user dialing *99# to access NUUP. Image: Srikanth Ramakrishnan/Swarajya
A user dialing *99# to access NUUP. Image: Srikanth Ramakrishnan/Swarajya

Now, to buses. Can we try and replicate the USSD Banking model for bus travel? Why not? We have two major applications for it.

  1. Ticketing.
  2. Tracking.

For all practical purposes, we will try and take BEST and BMTC as an example here. We will also assume a simple USSD number to dial: *456#

Ticketing

Since both BEST and BMTC have an Electronic Ticketing System in place, this can be relatively easy. It is easier for BEST, since BEST has all its bus stops numbered as well. Example: If I am at Nehru Planetarium/NSCI/Lotus bus stop at Worli, with a Bus Stop code 07187. I dial *456#, it asks me to enter the stop code, then I type 07187, it then asks me if I want to 1.Buy a ticket or 2. Know the arrival of buses, I choose 1. It then lists out the buses arriving in the next 30 minutes. I choose AS-4. It then lists out the stops from NSCI to Backbay Depot, I choose Backbay Depot, it asks for confirmation, I say yes. It deducts ₹75 from my wallet and sends me an SMS with the ticket details. It gives a 4-digit reference number which I show the conductor when I board the bus. He enters that onto his machine and that’s all.

Tracking

This is even more simpler than booking a ticket. The process is pretty much the same. Dial *456#, enter stop code 07187, choose 2 and it shows the list of buses. I choose AS-4. It shows the last stop the bus has crossed and the ETA, like : AS-4, Acharya Atre Chowk, ETA 4 min. This is similar to BEST’s existing SMS based system, but provides more real time data.

Shortcodes

A shortcode can be created enabling faster access to frequenters.

Eg: *456*1*07187# to open the list of buses to book a ticket. Or *456*2*07187# to open the list of buses to track then.

Pricing

Now comes the tricky part. Rates for the NUUP are charged, with a maximum cap set by TRAI at ₹1.5 per transaction. As far as tracking is concerned, the existing SMS system (although not functional right now) costs ₹3 per message. A ₹1 charge per transaction/lookup might be good for tracking. The issue comes for payments. Charging a rupee extra per ticket doesn’t sound like a good move. However, since BEST already charges ₹30 for the ePurse Card, and ₹10 per month for bus passes as administrative charges, it might not be a problem if it is charged as a rent from the user’s account.

What do you say? USSD Banking is here. USSD Bus Travel? Why not

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Subsidies in Transport: Good or Bad

Subsidies in Transport are visible everywhere. Tamil Nadu has kept its bus fares at rock bottom rates, gives free bus passes to school students, Delhi has dirt cheap rates with the maximum fares being ₹15 and ₹25 in a non-AC and an AC bus. So, what else?

As stated earlier, extreme amount of subsidies bleeds the Transco of its revenue, and create a heavy indifference among the commuters to quality of services. Given that a vast majority of India’s transport services are entirely General Class services, revenues are inherently low. Similarly, in the case of Roads, a lot of people argue that Tolls are a “scam”, especially when they pay road taxes. Again, this is a false notion, one that can be explained if we cared to look at the Basic Difference between Toll and Road Tax: Toll is a User Fee. Road Tax is a Tax. I repeat, Toll is a Fee, and not a Tax. A tax is levied on a category of people on the basis of the income or what they own, in this case a vehicle. A toll, or a fee, is levied only on those who use the certain service or product, in this case the road. Many users accept this, but go on to further state that they are unjustly charged for using the entire section of a road rather than just the portion they used. Again, this is a flawed point of thought. In India, it would be a superhuman effort to set up Toll Plazas at every junction, man them [an automated one wouldn’t work, people will definitely find a way to avoid paying it then] and operate it. Of course, the Coimbatore bypass has 6 Toll Plazas on it, but 6 of them on a 28km two lane road, we all know the jam that occurs most of the time.

Toll Roads and other BOT transport projects, such as BOT Railway lines, like the Mumbai Metro One, Rapid Metro Gurgaon, Hyderabad Metro, et al, have specific intervals at which they are allowed to hike fees and fares, which makes it easier to operate and break even. In case of Transcos, most of them are either under pressure from the state or municipal body to keep their fares low [Prime Examples being DTC, MTC, TNSTC]. A few exceptions exist in the form of BEST, BMTC, TSRTC, which by virtue of the autonomy enjoyed by them revise [hike or slash] their fares at a reasonable interval. One method of determining rates is market oriented rates, which is what Uber and Ola normally does. When demand goes up, fares go up so that those who are willing to pay extra for it. However, this isn’t a feasible solution in all cases. In such situations, BEST’s Happy Hours concept works well. Similarly, KSRTC and the Indian Railways have successfully emulated the aviation industry with dynamic pricing in the form of Premium Tatkal tickets. Every transport corporation has schemes to attract customers. Similar to Toll Plazas offering a return ticket and seasonal pass, buses offer Passes and other forms of subsidies to frequent customers like the market.

Now, to take this further, below is an article from the Foundation for Economic Education which talks about the ill effects of subsidies.

 

The Distorting Effects of Transportation Subsidies

This article won the 2011 Beth A. Hoffman Memorial Prize for Economic Writing.

Although critics on the left are very astute in describing the evils of present-day society, they usually fail to understand either the root of those problems (government intervention) or their solution (the operation of a freed market). In Progressive commentary on energy, pollution, and so on—otherwise often quite insightful—calls for government intervention are quite common. George Monbiot, for instance, has written that “[t]he only rational response to both the impending end of the Oil Age and the menace of global warming is to redesign our cities, our farming and our lives. But this cannot happen without massive political pressure.”

But this is precisely backward. Existing problems of excess energy consumption, pollution, big-box stores, the car culture, and suburban sprawl result from the “massive political pressure” that has already been applied, over the past several decades, to “redesign our cities, our farming, and our lives.” The root of all the problems Monbiot finds so objectionable is State intervention in the marketplace.

In particular, subsidies to transportation have probably done more than any other factor (with the possible exception of intellectual property law) to determine the present shape of the American corporate economy. Currently predominating firm sizes and market areas are the result of government subsidies to transportation.

Adam Smith argued over 200 years ago that the fairest way of funding transportation infrastructure was user fees rather than general revenues: “When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them.”

This is not, however, how things were actually done. Powerful business interests have used their political influence since the beginning of American history to secure government funding for “internal improvements.” The real turning point was the government’s role in creating the railroad system from the mid-nineteenth century on. The national railroad system as we know it was almost entirely a creature of the State.

The federal railroad land grants included not only the rights-of-way for the actual railroads, but extended 15-mile tracts on both sides. As the lines were completed, this adjoining land became prime real estate and skyrocketed in value. As new communities sprang up along the routes, every house and business in town was built on land acquired from the railroads. The tracts also frequently included valuable timberland. The railroads, according to Matthew Josephson (The Robber Barons), were “land companies” whose directors “did a rushing land business in farm lands and town sites at rising prices.” For example, under the terms of the Pacific Railroad bill, the Union Pacific (which built from the Mississippi westward) was granted 12 million acres of land and $27 million worth of 30-year government bonds. The Central Pacific (built from the West Coast eastward) received nine million acres and $24 million worth of bonds. The total land grants to the railroads amounted to about six times the area of France.

Theodore Judah, chief engineer for what became the Central Pacific, assured potential investors “that it could be done—if government aid were obtained. For the cost would be terrible.” Collis Huntington, the leading promoter for the project, engaged in a sordid combination of strategically placed bribes and appeals to communities’ fears of being bypassed in order to extort grants of “rights of way, terminal and harbor sites, and . . . stock or bond subscriptions ranging from $150,000 to $1,000,000” from a long string of local governments that included San Francisco, Stockton, and Sacramento.

Government also revised tort and contract law to ease the carriers’ way—for example, by exempting common carriers from liability for many kinds of physical damage caused by their operation.

Had railroad ventures been forced to bear their own initial capital outlays—securing rights of way, preparing roadbeds, and laying track, without land grants and government purchases of their bonds—the railroads would likely have developed instead along the initial lines on which Lewis Mumford speculated in The City in History: many local rail networks linking communities into local industrial economies. The regional and national interlinkages of local networks, when they did occur, would have been far fewer and far smaller in capacity. The comparative costs of local and national distribution, accordingly, would have been quite different. In a nation of hundreds of local industrial economies, with long-distance rail transport much more costly than at present, the natural pattern of industrialization would have been to integrate small-scale power machinery into flexible manufacturing for local markets.

Alfred Chandler, in The Visible Hand, argued that the creation of the national railroad system made possible, first, national wholesale and retail markets, and then large manufacturing firms serving the national market. The existence of unified national markets served by large-scale manufacturers depended on a reliable, high-volume distribution system operating on a national level. The railroad and telegraph, “so essential to high-volume production and distribution,” were in Chandler’s view what made possible this steady flow of goods through the distribution pipeline: “The revolution in the processes of distribution and production rested in large part on the new transportation and communications infrastructure. Modern mass production and mass distribution depend on the speed, volume, and regularity in the movement of goods and messages made possible by the coming of the railroad, telegraph and steamship.”

The Tipping Point

The creation of a single national market, unified by a high-volume distribution system, was probably the tipping point between two possible industrial systems. As Mumford argued in Technics and Civilization, the main economic reason for large-scale production in the factory system was the need to economize on power from prime movers. Factories were filled with long rows of machines, all connected by belts to drive shafts from a single steam engine. The invention of the electric motor changed all this: A prime mover, appropriately scaled, could be built into each individual machine. As a result, it was possible to scale machinery to the flow of production and situate it close to the point of consumption.

With the introduction of electrical power, as described by Charles Sabel and Michael Piore in The Second Industrial Divide, there were two alternative possibilities for organizing production around the new electrical machinery: decentralized production for local markets, integrating general-purpose machinery into craft production and governed on a demand-pull basis with short production runs and frequent shifts between product lines; or centralized production using expensive, product-specific machinery in large batches on a supply-push basis. The first alternative was the one most naturally suited to the new possibilities offered by electrical power. But in fact what was chosen was the second alternative. The role of the State in creating a single national market, with artificially low distribution costs, was almost certainly what tipped the balance between them.

The railroads, themselves largely creatures of the State, in turn actively promoted the concentration of industry through their rate policies. Sabel and Piore argue that “the railroads’ policy of favoring their largest customers, through rebates” was a central factor in the rise of the large corporation. Once in place, the railroads—being a high fixed-cost industry—had “a tremendous incentive to use their capacity in a continuous, stable way. This incentive meant, in turn, that they had an interest in stabilizing the output of their principal customers—an interest that extended to protecting their customers from competitors who were served by other railroads. It is therefore not surprising that the railroads promoted merger schemes that had this effect, nor that they favored the resulting corporations or trusts with rebates.”

Reprising the Role

As new forms of transportation emerged, the government reprised its role, subsidizing both the national highway and civil aviation systems.

From its beginning the American automotive industry formed a “complex” with the petroleum industry and government highway projects. The “most powerful pressure group in Washington” (as a PBS documentary called it) began in June 1932, when GM president Alfred P. Sloan created the National Highway Users Conference, inviting oil and rubber firms to help GM bankroll a propaganda and lobbying effort that continues to this day.

Whatever the political motivation behind it, the economic effect of the interstate system should hardly be controversial. Virtually 100 percent of roadbed damage to highways is caused by heavy trucks. After repeated liberalization of maximum weight restrictions, far beyond the heaviest conceivable weight the interstate roadbeds were originally designed to support, fuel taxes fail miserably at capturing from big-rig operators the cost of pavement damage caused by higher axle loads. And truckers have been successful at scrapping weight-distance user charges in all but a few western states, where the push for repeal continues. So only about half the revenue of the highway trust fund comes from fees or fuel taxes on the trucking industry, and the rest is externalized on private automobiles.

This doesn’t even count the 20 percent of highway funding that’s still subsidized by general revenues, or the role of eminent domain in lowering the transaction costs involved in building new highways or expanding existing ones.

As for the civil aviation system, from the beginning it was a creature of the State. Its original physical infrastructure was built entirely with federal grants and tax-free municipal bonds. Professor Stephen Paul Dempsey of the University of Denver in 1992 estimated the replacement value of this infrastructure at $1 trillion. The federal government didn’t even start collecting user fees from airline passengers and freight shippers until 1971. Even with such user fees paid into the Airport and Airways Trust Fund, the system still required taxpayer subsidies of $3 billion to maintain the Federal Aviation Administration’s network of control towers, air traffic control centers, and tens of thousands of air traffic controllers.

Eminent domain also remains central to the building of new airports and expansion of existing airports, as it does with highways.

Subsidies to airport and air traffic control infrastructure are only part of the picture. Equally important was the direct role of the State in creating the heavy aircraft industry, whose jumbo jets revolutionized civil aviation after World War II. In Harry Truman and the War Scare of 1948, Frank Kofsky described the aircraft industry as spiraling into red ink after the end of the war and on the verge of bankruptcy when it was rescued by the Cold War (and more specifically Truman’s heavy bomber program). David Noble, in America by Design, made a convincing case that civilian jumbo jets were only profitable thanks to the government’s heavy bomber contracts; the production runs for the civilian market alone were too small to pay for the complex and expensive machinery. The 747 is essentially a spinoff of military production. The civil aviation system is, many times over, a creature of the State.

The State and the Corporation

It’s hard to avoid the conclusion that the dominant business model in the American economy, and the size of the prevailing corporate business unit, are direct results of such policies. A subsidy to any factor of production amounts to a subsidy of those firms whose business models rely most heavily on that factor, at the expense of those who depend on it the least. Subsidies to transportation, by keeping the cost of distribution artificially low, tend to lengthen supply and distribution chains. They make large corporations operating over wide market areas artificially competitive against smaller firms producing for local markets—not to mention big-box retailers with their warehouses-on-wheels distribution model.

Some consequentialists treat this as a justification for transportation subsidies: Subsidies are good because they make possible mass-production industry and large-scale distribution, which are (it is claimed) inherently more efficient (because of those magically unlimited “economies of scale,” of course).

Tibor Machan argued just the opposite in the February 1999 Freeman:

Some people will say that stringent protection of rights [against eminent domain] would lead to small airports, at best, and many constraints on construction. Of course—but what’s so wrong with that?

Perhaps the worst thing about modern industrial life has been the power of political authorities to grant special privileges to some enterprises to violate the rights of third parties whose permission would be too expensive to obtain. The need to obtain that permission would indeed seriously impede what most environmentalists see as rampant—indeed reckless—industrialization.

The system of private property rights . . . is the greatest moderator of human aspirations. . . . In short, people may reach goals they aren’t able to reach with their own resources only by convincing others, through arguments and fair exchanges, to cooperate.

In any case, the “efficiencies” resulting from subsidized centralization are entirely spurious. If the efficiencies of large-scale production were sufficient to compensate for increased distribution costs, it would not be necessary to shift a major portion of the latter to taxpayers to make the former profitable. If an economic activity is only profitable when a portion of the cost side of the ledger is concealed, and will not be undertaken when all costs are fully internalized by an economic actor, then it’s not really efficient. And when total distribution costs (including those currently shifted to the taxpayer) exceed mass-production industry’s ostensible savings in unit cost of production, the “efficiencies” of large-scale production are illusory.

Kevin A. Carson


Kevin A. Carson

Kevin Carson is a senior fellow of the Center for a Stateless Society and holds the Center’s Karl Hess Chair in Social Theory. He is a mutualist and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: A Libertarian Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman.

This article was originally published on FEE.org. Read the original article.

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