The Last Mile Belongs to the State: A Case for PSU-Anchored First & Last Mile Connectivity in India

A recent BBC article (published on 19 April) claimed that India's metro systems are struggling to attract passengers. The article attracted immediate backlash on Indian social media — commuters from Delhi, Bengaluru, Mumbai etc narrated experiences of travelling in trains so packed that finding standing space was difficult. The BBC piece was rightly criticised for being high on narrative and low on data. But buried within it was a signal worth extracting: at certain stations, ridership is genuinely thin. Not because the metro is unwanted, but because many stations — even in megapolitan cities — have no reliable first or last mile connectivity. The metro arrives. But nothing is waiting on the other side.

This is not an anecdote. It is a structural deficiency, and it is replicated across India's public transport systems — at small railway stations after dark, at hill-town bus terminals, and at newly opened metro stations in urban peripheries where the surrounding neighbourhood has no organised feeder service. The problem is not the middle mile. India has been building middle-mile infrastructure—metro lines, railway capacity, intercity bus networks—at considerable pace and public expense. The problem is the unfinished edge.

The Three-Wheeler Moment

India's three-wheeler market offers an instructive backdrop. In FY26, it was the fastest growing vehicle segment across all vehicle categories. Electric vehicle penetration in this segment crossed thirty percent in 2025 — the highest electrification rate among any vehicle segment in India. The market is also innovating: On 20 April 2026, Hyundai Motor and TVS Motor announced a Joint Development Agreement that would bring global R&D capability into electric three-wheeler design specifically tailored to Indian conditions — adaptive ground clearance for monsoon roads, thermal management for tropical climates, flexible configurations for passenger and goods use. The asset is improving.

But a better three-wheeler does not, by itself, solve last-mile connectivity. The vehicle is a necessary condition, not a sufficient one. The deeper problem is deployment — whether the right vehicle is in the right place at the right time. That is not a product design question. It is a coordination and governance question.

What "Last Mile" Actually Means

When we speak of last-mile connectivity, we must ask: last mile of what? There were many miles before it. The answer points directly to the middle-mile providers—metro corporations, Indian Railways, and state road transport corporations. It is their infrastructure that generates the demand for first and last mile services. A metro station, a railway terminus, a bus depot: each is a node where large numbers of people arrive and disperse. The last-mile problem is, structurally, their unfinished business.

This reframing has a practical implication. These organisations already possess what any last-mile solution requires: station land and forecourt space, captive and predictable passenger demand, digital ticketing infrastructure, and—critically—the balance sheet capacity to absorb losses on thin routes. They are also, in the main, government owned. Metro corporations answer to state governments. Indian Railways is a central government entity. SRTCs are state undertakings. The institutional anchor already exists.

Why the Market Cannot Solve This

Private aggregators—whether established platforms or contracted third parties—will always concentrate where revenue is. High-footfall stations already attract informal auto stands and app-based services. The market does not need intervention there. It is the low-footfall station, the late-evening arrival, the hill-town bus terminus that the market will never serve, because no private operator can sustain persistent route-level losses. The coverage map produced by market logic replicates the existing demand map. It does not correct it. The mobility gap persists precisely where it is most acute.

This is the structural case for a PSU-anchored model. Only an entity without exit pressure — one whose mandate is network coverage rather than route-level profitability — can deliver uniform first and last mile connectivity across all stations regardless of footfall. Profitable stations cross-subsidise unprofitable ones. This is not inefficiency. It is the cost of coverage, and it has clear precedent in India's universal service obligations in telecom and rural electrification.

The PSU Subsidiary Model

The proposal is this: each major middle-mile corporation—metro transport corporations, Indian Railways through IRCTC, state bus corporations—establishes a specialist first & last mile connectivity subsidiary. Not a department within the parent, but a separate operational entity with its own mandate, fleet management capability, and accountability framework.

The digital integration is the keystone. A commuter booking a metro pass or a train ticket should be able to simultaneously book a first-mile pickup from home and a last-mile drop to destination — offered as a package, with discounts for regular users. This is more than a convenience feature. It removes the single greatest deterrent to public transport adoption: the uncertainty of what happens at either end of the journey. A person who currently avoids the metro because the last mile is unreliable becomes a committed daily commuter once that uncertainty is removed. The subsidiary does not merely serve existing riders. It converts irregular users into regular ones — and regular users are the financial backbone of every middle-mile system. The subsidiary's losses at thin stations are partially offset by the ridership growth it generates for the parent corporation. The consolidated financial case is considerably stronger than the subsidiary's own accounts suggest.

A Mixed Fleet, Driver Welfare, and Vehicle Care 

The subsidiary operates a mixed fleet. Single commuters are better and more economically served by two-wheelers — faster in congested areas, lighter on forecourt space. Families, elderly passengers, and those carrying luggage are better served by three-wheelers. Fleet composition is calibrated to passenger profile, not imposed uniformly.

Equally important is what the station and depot provide to the driver. Integrated parking and charging infrastructure for the vehicles and rest facilities for the drivers are not peripheral amenities. They are what makes the system operationally sustainable. A driver with a guaranteed booking queue, a charged vehicle, and a dignified waiting environment stays in the system. Welfare infrastructure reduces attrition and informality, and is the foundation of fleet reliability.

The Arrival Experience

Every Indian who has arrived at a major railway station or bus terminus knows the experience: drivers crowding the exit, competing loudly for attention, passengers overwhelmed and rushed into decisions they are uncertain about. It is undignified for the traveller and, in truth, for the driver as well. In the subsidiary model, this changes entirely. The vehicle licence number is already on the commuter's phone. The driver knows the passenger is coming. The transition from train or bus to last-mile vehicle is calm, accountable, and documented. This single image — the booked auto waiting, the unhurried passenger walking toward it — captures what the proposal changes in practice more vividly than any policy argument.

Employment and Experimentation

Two- and three-wheeler operators within the proposed subsidiary are registered fleet partners. They are not informal stand operators or gig workers without recourse, but are formally contracted operators within an accountable and welfare-providing framework. The scheme unifies employment generation and mobility provision within a single institutional logic.

At the same time, this model also offers scope for specific policy pilots that private operators will never prioritise. Women-driven two and three-wheelers for women commuters is one such pilot — structured as a measurable intervention with clear outcomes: female ridership frequency, female employment, and passenger safety. This is the kind of social experimentation that only a public institutional framework makes viable at scale.

A Policy Whose Time Has Come

The enabling conditions are already assembling. Three-wheeler markets are expanding and electrifying. Metro networks are extending into new cities and corridors. Indian Railways and state transport corporations are digitising their passenger interfaces. The physical infrastructure, the digital infrastructure, and the vehicle technology are converging. What is missing is the institutional mandate that ties them together at the first & last mile. A PSU subsidiary model, anchored within existing middle-mile corporations, provides that mandate — uniformly, sustainably, and at a scale that the market, by its own logic, will never reach.

The last mile is public infrastructure. It should be treated as such.