This document summarizes a study on non-ownership commercial mobility services for small producers in rural India. The study tested a "truck-sharing" business model where producers could access commercial vehicles on a pay-per-use basis without ownership. A conjoint analysis survey with 300 producers found they prefer ad-hoc booking, cash deposits, one-way trips, minimum distances of 40-80km, and market-level pricing. Next steps include further analyzing results, adapting service packages to local contexts, and piloting the business model with development organizations and companies.
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Truck Sharing for Small-scale Producers in Rural India - An Analysis
1. Non-Ownership Commercial Mobility Services for
the Base of the Pyramid: A User Preference Study
or
„Truck-Sharing in Rural India“
Dr. Roger Moser
Director, India Competence Center & ASIA CONNECT Center
Research Institute for International Management, University of St.Gallen
Dr. Tobias Schaefers
Automotive Institute for Management
Marketing & Consumer Insights, EBS Business School
2. A crucial challenge for the economic development of the
Base of the Pyramid (BoP): Commercial Mobility
„Because Tier 4 communities are often physically and economically isolated, better
distribution systems and communication links are essential to development of the
bottom of the pyramid.”
(Prahalad and Hart 2002, p. 9)
• Access to commercial transportation vehicles poses difficulties for BOP, impeding
business opportunities and growth (Gupta 2008; Haugh et al. 2010)
• Products created by low-income population in rural areas hardly ever reach the next
major city (Gupta 2008)
Challenge: Vehicle Purchase
• High initial investments or long-term financing
• Several risks, e.g., maintenance, alteration
Challenge: Logistics Services
• Limited availability in rural areas
• Pricing aimed at large businesses or corporations
in major cities
Objective: Solution offering access to commerical mobility for small-scale producers without
the requirement of individual ownership
3. Providing opportunities for the Base of the Pyramid:
Non-Ownership Services (NOS) as an alternative
business model approach
• The academic literature is still working on the exact definition and differentiations of
non-ownership services (Möller, 2010, Schaefers & Moser, 2011, Haase & Kleinaltenkalb, 2011 among others)
• For the base of the pyramid it only matters that Non-Ownership Services can help to
overcome (financial and natural) resources restrictions.
4. NOS business models of Commercial Mobility for the BoP
can take numerous forms: Empirical research is
required to identify what might really work
• Non-ownership services can be defined as an alternative form of consumption in
which the acquisition and possession of an object is replaced by temporary access
to that object (Schaefers & Moser, 2011)
5. Empirical research with small-scale producers in rural
India: Testing a non-ownership commercial mobility
business model or “Does truck-sharing in rural India
work?”. .
“The BOP proposition correctly celebrates the “shared access” model
as a way to make products more affordable to the poor.”
(Karnani 2007, p. 102)
• Shared use of resources can address challenges at the base of the pyramid
• Improvement of business opportunities and livelihood
• Specifics of non-ownership commercial mobility
service in rural India:
• Light Commercial Vehicles
• Payment per amount of time used
• Advanced booking or ad-hoc use
Prices well below logistics service providers
No initial investments & ownership risks
Make commercial transport easier and more
affordable for BoP small entrepreneurs
6. Applied research in rural India: Combining academic
rigor and practicability in application and data
collection.
• Step 1: Identification of existing similar, existing business models
Similar services offered in proximity to centres of metros (e.g. 30 km away from Bangalore)
• Step 2: Case study interviews with 15 commercial service providers and users
Application in rural areas requires more coordination than what single small logistics
service providers (max. 1-2 vehicles) can offer
• Step 3: Conjoint measurement study with 300 small-scale producers as potential users of non-ownership
commercial mobility services in rural India
• Collaboration with Dharma (NGO) for data collection
• New data collection approach to use Dharma employees for
participant identification and data
collection
• Data analysis by India Competence
Center at University of St.Gallen
Results show potential business model
according to expectations
7. First results of the conjoint measurement study (step 3):
Small-scale producers prefer the following business
model for non-ownership commercial mobility
• A clear preference for ad-
hoc booking over advanced
or fixed offerings
-0.056 -0.04
0.096
-1.5
-1
-0.5
0
0.5
1
1.5
book_fix book_adv book_adh
BOOKING
(12,31%)
-0.818
0.973
-0.154
-1.5
-1
-0.5
0
0.5
1
1.5
adv_cash cash_dep asset_dep
PAYMENT
(20,57%)
0.38
-0.38
-1.5
-1
-0.5
0
0.5
1
1.5
1-way 2-way
MODE
(20,14%)
0.71
0.297
-1.007
-1.5
-1
-0.5
0
0.5
1
1.5
40 80 120
MIN KM
(14,06%)
2.671
0.575
-0.303
-2.943
-3
-2
-1
0
1
2
3
8 10 12 14
PRICE (Rs./km)
(32,92%)
• A clear preference for a
cash-deposit over cash in
advance or asset-based
deposit
• A clear preference for one-
way transport over two-way
transport offerings
• The minimum amount of
with the highest utility
value is 40 but also 80
shows positive values
• The price level with a utility
value of almost zero is
close to today’s market
prices
8. Next steps: Detailed analysis of study results and
preparation of pilot implementation
0.161
0.432
-0.593
-0.161
-0.432
0.593
-1.5
-1
-0.5
0
0.5
1
1.5
1-way
x 40
1-way
x 80
1-way
x 120
2-way
x 40
2-way
x 80
2-way
x 120
MODE by MIN KM
0.591
-0.224 -0.361
-0.006
-0.591
0.224
0.361
0.006
-1.5
-1
-0.5
0
0.5
1
1.5
1-way
x 8
1-way
x 10
1-way
x 12
1-way
x 14
2-way
x 8
2-way
x 10
2-way
x 12
2-way
x 14
MODE by PRICE
0.28
1.208
-1.446
-0.043 -0.107
-0.408
1.012
-0.496
-0.173
-0.8
0.433
0.539
-1.5
-1
-0.5
0
0.5
1
1.5
40
x 8
40
x 10
40
x 12
40
x 14
80
x 8
80
x 10
80
x 12
80
x 14
120
x 8
120
x 10
120
x 12
120
x 14
MODE by PRICE
Business model development
• The study results need to be further understood and discussed
with the potential actual users in India
• Service packages need to be further clarified and adapted to
specific local contexts
Pilot implementation
• Development aid agencies, trusts and commercial companies
from logistics as well as car manufacturing have to be
integrated into the set-up of a pilot application.
9. Dr. Roger Moser
Research Institute for International Management,
University of St.Gallen, Switzerland
Adjunct Faculty, IIM Udaipur, India
Visiting Faculty, IIM Bangalore, India
roger.moser@unisg.ch
India Competence Center
Research Institute for International Management
Dufourstrasse 40a
CH-9000 St.Gallen
www.fim.unisg.ch
India Competence Center: Contact