At the point when an industry departs, cities have to expand the ability to make sure that a transition to a new set-up is smooth and cost-effective. The effort of Finance Minister Nirmala Sitharaman to blame the inclination for using Ola and Uber for the slowdown in the economy received much criticism from social media, and not completely without cause. The slowdown is undoubtedly visible in the automobile sectors, for example two-wheelers and commercial vehicles, which are not influenced by the operations of taxi aggregators. Though the slowdown may be most prominent in the performance of the auto industry, it has also influenced a variety of other industries. However, if we go stay from explanations for the slowdown, the impact that Ola and Uber have had on the auto industry reveals the requirement for cities to be flexible to economic transformations.
The increase of taxi aggregators usually comprises of two phases. In the first phase it restores taxis functioning individually. As a large number of the taxis functioning individually are older vehicles, their substitute by taxi aggregators using newer vehicles boosts the demand for passenger cars. In the second phase, the arrangement of taxi aggregators becomes so deep-rooted that individual car owners like using these services to substituting their cars.
This liking develops with uncontrollable urbanisation increasing the diverse fees of keeping a car, including the delays reasoned by the lack of parking facilities. Union Minister Nitin Gadkari has added to these expenses with his policy of using exorbitant fines to implement traffic rules. Although Gadkari changes his mind, or is refused by State governments, Ola and Uber can be likely to leave their mark on the requirement for passenger cars.
Textbook economists would ignore the impacts of such changes as no more than the economy discovering its way to competence. Provided that Ola and Uber decrease the prices to individuals of owning a car, with fines and searching parking, they offer a more economically competent form of passenger car transportation. If it leads to a reduction in the demand for cars, so be it.
The problem is textbook economics typically evaluates two static circumstances, the one before Ola and Uber and the one after they have had their effect. It doesn’t fear itself excessively about the process of moving from one circumstance to the other. It only supposes that those who lose their jobs in the auto industry will perform other work in the industries where their cities are now considered competent. Despite everything else, the new industries may like starting out with younger workers they can instruct rather than trying to change the skills of workers who have settled ways of working. It is also possible that the new job opportunities are rising in distant places but are impossible to be accessed by those who have lost their jobs.
The difference between the smooth transitions of textbook economics and the barrier-filled paths of reality is extensive, however it is not impractical for urban policy to attempt and reduce it. An industry dominated city which has lost its prior momentum must make itself open to the newer proficient industries. It must offer facilities the newer industries demand in a way that is cost effective. Furthermore, it must allow workers to tap the opportunities offered by the new industries.
There are instances of cities all over the world that has made this change. Akron in Ohio, US, used to be a centre for tyre manufacturers, and it is also home to some of the major global brands. It faced an existential challenge while the tyre industry chose to go away from the city. There was very big tyre industry-centric infrastructure and workforce. It used several modernizations to change its infrastructure cost effectively. It transformed its rubber silos into five star hotels. It also formed successful incubators that permitted workers facilities for a fixed number of years to try out with being entrepreneurs.
There are numerous behavioural obstructions to Indian cities developing a similar flexibility. We like to demolish and rebuild, in spite of adapting or changing old buildings to new uses. Our deep denial of failure makes experimentation with entrepreneurship highly difficult. The mission of challenging these behavioural traits is made even more frightening by the refuse of a cultural realm that can speak these issues in the popular domain. The more economically, socially and culturally expensive it gets to bring about change in our cities, the less resilient they get.