Changing the goods transport paradigm with autorickshaws

Hindustan Times

06-07-2025

As India's cities grow more digital and delivery-driven, the pressure on urban logistics is steadily rising. Yet navigating India's dense, informal, and congested urban fabric requires a kind of fleet that is both agile and affordable. Passenger autorickshaws may be considered here. Many autos are underutilised for much of the day, operating mainly during peak hours. Drivers, often earning inconsistent incomes, use off-peak hours to carry small parcels in informal arrangements. The vehicle is there. The demand is there. What is missing is the regulation of the service through a transparent policy guideline. Many autos are underutilised for much of the day, operating mainly during peak hours. Drivers, often earning inconsistent incomes, use off-peak hours to carry small parcels in informal arrangements (Parwaz Khan /HT PHOTO)
Currently, most passenger autos operate under contract carriage permits that prohibit the transportation of goods. The Motor Vehicles Act includes an exemption for vehicles under 3,000 kg from needing a separate goods permit. However, this clause is interpreted and implemented inconsistently across states. While some allow dual use under defined conditions, others require prior approvals or offer no guidance at all. The result is a regulatory grey zone where informal practice outpaces formal policy.
According to urban freight studies from the Centre for Digital Economy Policy Research at IIT Delhi and the World Resources Institute (WRI), dual use could raise utilisation by 30-50% and increase monthly driver income by ₹3,000-5,000. For small merchants, access to nearby, affordable delivery options could lower logistics costs and expand their service reach.
A 2023 WRI study found that using passenger autorickshaws for small goods delivery costs nearly 50% less than using dedicated three-wheeler cargo vehicles. Even if just 10% of India's estimated $40 billion urban and last-mile logistics market loads could be shifted to autorickshaws, the potential savings could exceed $2 billion annually. These savings would be shared across drivers, merchants, platforms, and of course, the end-users.
Currently, there is a structural gap in the vehicle ecosystem. Loads under 20 kg are typically handled by two-wheelers or informal foot delivery. Freight over 300 kg moves through standard goods carriers. But many small businesses operate in the middle, dealing with 20 to 300 kg per trip. Without a flexible and cost-effective option, they often resort to paying for cargo vehicles that are oversized for their needs. Autorickshaws could fill this gap seamlessly.
By law, passengers are allowed to carry up to 50 kg of luggage in an autorickshaw. If it is considered safe to carry that weight along with a passenger, it is entirely reasonable to allow the same payload when the vehicle is operating alone on a goods-only trip. Some states have begun to act. In Kerala, the Motor Vehicle Rules permit dual use under basic safety and cleanliness conditions. Gujarat, Tamil Nadu, Uttar Pradesh, Punjab, Andhra Pradesh, and Chandigarh follow similar principles. Their rules do not explicitly prohibit carrying goods, so long as the cargo is non-hazardous, hygienic, and does not cause discomfort. Tamil Nadu even outlines the responsibilities of drivers toward both passengers and goods consignors.
Other states are more restrictive. Maharashtra, Madhya Pradesh, and Rajasthan require prior approval from regional transport authorities. These permissions often include conditions on types of goods and zones of operation. While these rules are grounded in safety and planning concerns, the lack of a unified framework has hindered wider adoption and scale.
The ministry of road transport and highways, working with state departments, could issue a model rule clarifying the application of the national exemption for light vehicles. This could include guidelines on permissible weight and size limits, hours of operation, hygiene and safety standards, restricted goods categories, and simple registration processes. This would give states a shared baseline to adapt to local conditions.
Drivers would have a legally sanctioned way to diversify earnings. Platforms could on-board local fleets for structured delivery services. Small businesses would gain a cost-effective logistics option. Urban authorities could reduce redundant trips and better manage traffic flows. It would bring into the formal economy a widespread but unrecognised practice. There are environmental advantages, too. Light commercial vehicles contribute disproportionately to urban air pollution. Dual use of autos in circulation could cut emissions by reducing separate freight trips, more so with the growing adoption of electric autos.
Concerns around safety or enforcement are valid but manageable. Bringing informal delivery practices into the formal fold allows authorities to set standards, offer oversight, and partner with platforms to track compliance.
Some practical considerations will require attention. Public access to passenger services should not be compromised, particularly during peak hours or in high-demand zones. Light-touch measures such as visible markings for dual-use vehicles, periodic fitness checks, and optional insurance schemes for participating drivers may help build trust. The focus must stay on unlocking the underutilised potential of autorickshaws for short-haul delivery, not overloading the model with standards that cities are not yet equipped to enforce.
Jagadish Shettigar is a former member, Prime Minister's Economic Advisory Council. The views expressed are personal