I had asked this question at the TransInnova/ BMLTA summit yesterday, and didn't get a good answer, most likely because nobody had a number handy. Local urban transportation is a "problem", and problem equals "opportunity". Why is it that private players are not taking enough interest in lobbying to get access to this market? Policy hurdles would be one reason, but I am curious if the size of the market is being underestimated here. Lets do some numbers, simple and basic.
Assume Bangalore's population is 70 lakhs. Assume that 60% of these people have a need to commute daily. You get 42 lakhs. More spread the city (suburbia), bigger the percentage. Younger (so more workers) the population, more the need. Housewives, retired folks, those living close to work, still-at-home toddlers wouldn't need daily commutes and would be infrequent users, perhaps day time users of transportation services. Leave the details, assume simple number, 60% of 70 lakhs = 42 lakhs.
Pick a per kilometer cost these folks would be ready to pay, and would create sustainable businesses. Lets say 3 Rs per km. Now, lets pick a number for average travel distance for daily trips for 42 lakh people. 10 km, 5 up, 5 down would be a conservative estimate. That gives you a daily spend of Rs 30 per person.
42 lakhs x 30 = 12 crore per day = 300 crore a month (assume 25 work days) = 3600 crores an year.
Now, to add to this, assume usage level from rest of population would be 20% compared to the commuters. 2 km a day, 3 Rs a km, for 28 lakh people = 1.7 crores a day. x 30 x 12 = 612 crores.
We are talking Rs 4200 crores an year for Bangalore alone, and with conservative estimates.
What else? Not included the consumer durables these commuters would buy (snacks, drinks). Not included the services commuters could consume (phone, internet, rest rooms) at transit points. Not included the value of advertising on buses and transit points.
Now, whats BMTC's turnover? Rs 1000 crores, they predict for 2008, and not all of it from transportation services, mind you.
Conclusions later. Let us make our numbers a bit better, un-simplify them a bit.
- We can assume a high usage level of public transport, and change this into addressable public transportation market.
- Can compare this to other markets that have drawn private parties and investors - say cable/DTH, cars itself. And then see if its too small to get their attention.
[PS: Usual disclaimers apply - This is work in progress, numbers are naive, many assumptions, I am no expert, etc etc. But some searches and extrapolations, and we can get numbers to be better]