Mahindra Logistics

Corporate People Transportation – II (Regulatory Framework)

In continuation of Corporate People Transportation – I (Cost optimization) topic, the critical success factors for that objective to be achieved are addressed below:

  1. Standardization of Compliances & Information Security:
    Currently, all companies have their own standards of vehicle and driver compliance defined. This is attributable to the fact that most of the companies employed in the transportation of employees are from the unorganized sector and hence the need to have these defined in place by individual companies. Some aspects that can be looked at in order to establish standardization across the industry are listed below:

     - Central government to issue a general directive with approved agencies to conduct a set of mandatory checks on driver and vehicle compliances be defined and keep it as a central repository that can be accessed by all companies. 

    - A platform can be put in place by private enterprise with stringent norms defined by a regulatory body to be appointed by NASSCOM or similar institutions. This could be used by all companies on a transaction fee basis or subscription basis to eliminate the wastage in the system of the same driver having multiple background checks done every time he/she changes the place of work.

    - This sort of a central platform also can be leveraged with the complaints or defaults of the driver being captured at each company and a cumulative score maintained like CIBIL score, so that the deployment aspects of any defaulting drivers can be controlled, and better safety and service standards maintained in the industry.


  2. Change in legal governance framework:
    The current legal standards of Motor Vehicle (MV) act vary from state to state and thereby the interpretation of the same in every state is very different from each other. This raises the issue of permits for the vehicles being used. 

    - Technically today the vehicles being used under contract carriage are tourist vehicle permits. This needs to be addressed to tweak the rules meeting the requirements of the day to be able to use the vehicles in both contracted services as well as Ride – Hail services during non-peak hours.

    - It will also help if the individual vehicles owned by employees can be leveraged during peak hours to ensure capacity addition in the system is minimized. This will help in the cause of burgeoning vehicle numbers on the road and also maintain pollution levels within control. This calls for relooking at the definition of commercial and personal use vehicles in the MV act. 

    - The law on applicability of ESI / PF also is a little grey as it is today drivers are interpreted to be an employee, whereas in reality, majority of the drivers are entrepreneurs in their own right, who make a living by driving, not as an employee but as entrepreneurs – with or without ownership of car. This needs to be addressed quickly with changes in legislation, to encourage more drivers becoming entrepreneurs and become owners of their car.

  3. Government Interventions in Electric Vehicle:

    - Given the fact that the government is heavily subsidising the electric vehicles (FAME Subsidy) at a central level and state governments can chip in with a few subsidies in the form of electricity tariff and state road tax on these vehicles, it can really become a very cost-effective option. To get all these going the charging infrastructure needs to be better established to ensure that running of vehicles to longer distances also becomes feasible. If govt makes it mandatory to have fast charging units in all Gas stations, then the option of EVs in commercial use shall pick up dramatically.

 

All these are very possible solutions to help spruce up the industry to be cost-effective and do sustainable business.

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