On paper, it was a 60- to 90-minute commute, door to door, thanks to the Mumbai Trans Harbour Link, also known as Atal Setu. The bridge, which is 21.8 km long (much of it is over the Arabian Sea), links Sewri in south Mumbai to Chirle near Nhava Sheva, a short ride from Ulwe. Before it was built, the same commute would have taken well over two hours.

Every morning, Desai and many of his neighbours—mostly young professionals working in Fort, Nariman Point, and Lower Parel—would board Uber Shuttle buses that snaked through Navi Mumbai, picking up white-collar commuters from Ulwe, Panvel, Kharghar, and Thane. It was an air-conditioned, punctual, and peaceful commute.

“There’s no direct train. No proper bus. No AC coaches on the Harbour line (suburban rail),” Desai explained. “You either take an auto to Nerul or Seawoods and change two more modes, or you sit in a car for two hours. The shuttle solved all that.”

Uber Shuttle had launched in Mumbai in September 2021 with a bold promise: to cut through traffic, reduce the hassle of parking, and help commuters give up their private vehicles.

According to Desai, multiple Uber Shuttle buses ran daily from Navi Mumbai to south Mumbai. Many commuters were women who found local trains overcrowded and unsafe, while other passengers owned cars but chose the shuttles to save on fuel expenses and for the convenience.

But Uber shut its shuttle service in Mumbai and Hyderabad early last month due to regulatory issues, low ridership and steep operational costs.

“What do you expect us to do?” Desai asked, frustration bubbling over. “People have to go back to their cars. Traffic will get worse.” His move to the suburbs appears to be backfiring.

Sneha Kulkarni, 36, another resident of Ulwe who commutes to Fort daily, echoed Desai’s angst. “NMMT (Navi Mumbai Municipal Transport) runs maybe five or six buses, and every single one is packed—30 to 40 people standing, sweating, clinging to rails. So, what choice do we have? We have to go back to our cars,” she said.

The impact of Uber hitting the kill switch in Mumbai has been immediate and widespread. As many as 450 buses are now off the roads on key routes connecting Mumbai to Navi Mumbai and Thane, according to a leading bus operator who didn’t want to be identified.

“At least 50% of those passengers are likely to migrate to other private bus aggregators—if those services survive the regulatory heat,” the operator said. “The rest will fall back on personal vehicles.”

Mumbai has other shuttle operators as well, including Cityflo, Routematic and MoveInSync.

“Cityflo is going to pick up some of the demand,” said an industry executive directly familiar with the matter. He, too, didn’t want to be identified. Uber was running roughly 200 routes across Mumbai and Hyderabad, many of them overlapping with Cityflo’s network, the executive added.

Uber’s shuttle ambitions have played out unevenly across cities. In Hyderabad, the service launched with some fanfare in March, only to be quietly pulled along with the Mumbai service. In Delhi-NCR, however, Uber is doubling down. As of December 2024, Uber Shuttle was operating nearly 300 routes across the region.

Uber’s shuttle ambitions have played out unevenly across cities. In Hyderabad, the service launched with some fanfare in March, only to be quietly pulled along with the Mumbai service. In Delhi-NCR, however, Uber is doubling down.

An Uber spokesperson told Mint that the company remains bullish on Shuttle’s potential in India, as it continues to scale the service in Delhi and Kolkata, which are “seeing strong momentum and sustained rider growth”.

“We believe that moving more people in fewer vehicles offers strong value—for customers through affordable pricing, and for cities through improved traffic flow,” the spokesperson said. “While we have paused our pilot in Mumbai and Hyderabad, we remain closely engaged with local authorities to enable policy frameworks for Shuttle operations.”

Regulatory heat

App-based aggregators have repeatedly run into regulatory hurdles in India, facing differing state-level rules on permits, pricing, and service categories. In several states, including Karnataka and Maharashtra, missing or incomplete permits have led to bans or restrictions, while in Goa their entry has been entirely blocked due to strong opposition from cab unions.

“Many players secure app licenses but overlook contractual permits required by state-owned corporations for routes, stops, and service frequency,” said Nikhil Dhaka, policy lead at Primus Partners, a consultancy firm. “To move beyond just being an aggregator, companies must understand on-the-ground realities and secure all permits required in each state,” he added.

According to Maharashtra transport officials, who spoke to Mint on condition of anonymity, Uber Shuttle was operating in a regulatory vacuum. While the company has received a licence under Delhi’s Premium Bus Scheme, and has an MoU with the Government of West Bengal to support Shuttle operations in Kolkata, its operations in Mumbai were still under a pilot, meant to assess demand and align with existing transport systems. And that led enforcement agencies to crack down.

The Maharashtra transport department reportedly collected over ₹12 lakh in fines from private bus operators, including Uber and Cityflo, for allegedly running unlicensed shuttle services. As part of a statewide drive, Regional Transport Offices (RTOs) seized 125 buses found operating without valid stage carriage permits.

“There’s no formal policy yet for app-based buses,” a senior transport department official, who didn’t want to be identified, said. “We’re now in the process of drafting guidelines under the Aggregator Policy, which so far only covers app-based taxis.”

The distinction is pretty straightforward, explained another senior transport official. “A stage carriage permit allows buses to pick up and drop off multiple passengers along a fixed route—like public transport. In contrast, a contract carriage permit is meant for private groups, like a company chartering a bus for its employees.”

The whole vehicle has to be booked by one party—seats cannot be sold individually, and that is where the problem lies. App-based shuttle services operate more like stage carriages, but many of them were running under contract carriage permits or without permits, which isn’t legal, officials explained.

Yet, the model keeps resurfacing, despite repeated crackdowns. In gridlocked metros, companies still crave reliable, comfortable, time-efficient commute options for their employees. And that is why operators such as Cityflo, MoveInSync and Routematic keep finding ways back in.

Cityflo, too, is under fire despite claiming to be in compliance, with regulators flagging licensing gaps. The company operates 450 app-based buses, serving Mumbai, Hyderabad, and now Delhi.

Jerin Venad, co-founder of CityFlo, told Mint that the company has applied for a government licence to operate shuttle buses in Mumbai—but has not yet received it. CityFlo has stated it plans to reapply for a state transport licence in line with updated aggregator regulations, following directives from Maharashtra’s transport department.

“Our focus is on the car-owning, white-collar workforce that’s looking for a better alternative to driving themselves. The average public transport ticket is ₹15, but on Cityflo, it’s ₹180—this is a very different customer,” said Venad.

However, Regional Transport Office (RTO) officials Mint spoke to said that although CityFlo has provided all the necessary documents and the security deposit, a licence cannot be granted until the state’s aggregator policy is officially finalized and put into effect.

Routematic’s application for a contract carriage permit remains in limbo—while MoveInSync has sidestepped the process entirely.

Operational challenges

Buses come with their own baggage—especially after dark. Regulations demand home-drop services post a certain hour, and buses, bulky and blunt, don’t fit narrow residential lanes.

For night shifts, companies turn to sedans, reserving buses mainly for group pickups during the day, said Sriram Kannan, co-founder of Routematic.

But even by day, another cost looms large: dead mileage. This is the distance a vehicle travels without any passengers, usually between client locations or while returning to base. Since no revenue is generated during this leg, it adds to fuel, time, and labour costs.

Buses come with their own baggage—especially after dark. Regulations demand home-drop services post a certain hour, and buses, bulky and blunt, don’t fit narrow residential lanes.

“In a just-in-time model like Uber or Ola, dead mileage is minimal—often just 10%—because the driver typically gets their next trip nearby,” explained a transport operator, requesting anonymity. “But that efficiency comes at the cost of reliability. You might get a cab, or you might not. For office commutes, especially in a B2B setup, companies are paying for reliability.”

The key issue, Kannan noted, isn’t just where a customer is located, but whether that location fits into a broader route network. If it doesn’t, it creates inefficiencies that ripple across the system.

Deepesh Agarwal, co-founder of MoveInSync, echoes the concern. “The average utilization of a car is only about 70%—the rest is dead mileage or idle time. Only a few companies have 8,000+ employees at one site; tech parks with 20,000+ people are ideal for this model.”

Operators typically assess commuter density, public transport gaps, road infrastructure, and corporate office clusters before launching in a new city. Cities such as Mumbai, Delhi, and Bengaluru are natural picks due to high car ownership and severe congestion. Seat prices range between ₹120 and ₹180, versus ₹15 for public transport.

Before the pandemic, occupancies used to be above 80–85% because everyone came in on a fixed schedule—same time, every day, said Kannan. “That made transport planning easier.” Post-covid, however, hybrid work has disrupted that rhythm. “Now people just show up on different days, at different times, and that’s brought occupancies down to 60–65%,” he said.

An industry executive directly familiar with the matter cited the case of Uber’s shutdown. “Uber was heavily discounting rides to build habit, but in reality, each trip needs at least 50–60% seat occupancy just to break even. And that level of consistency is hard to maintain without deep and sustained demand,” he said.

Enterprising success

While Cityflo straddles both consumer and corporate markets, Routematic and MoveInSync run on a fundamentally different playbook—anchored in corporate tie-ups that double as both a business model and a regulatory shield. By operating fixed routes exclusively for enterprise clients, they sidestep the grey zones retail shuttle services often get caught in.

“Around 12 to 15% of our total vehicle mix is buses,” says Routematic’s Kannan. “The rest are mostly sedans, SUVs, and tempo travellers, which we lease to clients who then run transport operations based on their workforce schedules.”

Investors, too, prefer the enterprise model. “The enterprise context brings specific logistical and regulatory complexities that cannot be solved at scale by individual consumers or fragmented B2C offerings,” said Anurag Begwani, vice president, Bessemer Venture Partners, an investor in MoveInSync.

While there is certainly room for well-designed, citywide consumer services, the sector’s most resilient and scalable opportunities are likely to remain in B2B, given the structure of Indian cities and corporate/GCC (global capability centre) campuses, Begwani added.

Transport has quietly become a critical piece of the human resources puzzle for enterprises. It matters for hiring, it impacts retention, and increasingly, it’s a statutory necessity—especially when it comes to ensuring safety for women employees during late-night shifts, said MoveInSync’s Agarwal.

Backed largely by enterprise contracts, both Routematic and MoveInSync have shown some financial resilience. In 2023-24, MoveInSync emerged profitable—net profit of ₹69.4 lakh—with ₹434.68 crore in revenue. Routematic reported ₹116.16 crore in revenue and a net loss of ₹68 lakh. However, Cityflo, which posted ₹66.34 crore in revenue, ended with a net loss of ₹21.35 crore, according to data from Tofler.

Industry executives estimate that India’s total addressable market (TAM) for urban shuttle services could exceed 100,000 buses, translating to a potential market size of $3 billion, based on current demand patterns across metro and tier-I cities. Meanwhile, intercity bus services are expected to be worth $13 billion by 2027, according to a 2021 Redseer report.

However, despite the demand for shuttle services, investor appetite has cooled post-pandemic due to regulatory uncertainty and operational fragility we mentioned before.

Not going the distance

Cumulatively, going by filings, venture capital investments in India’s shuttle space have exceeded $200 million, led by startups such as Shuttl, ZipGo, and Routematic. Some of these companies had attracted strategic interest from corporate entities, including Toyota Tsusho (Shuttl) and the Essel Group (ZipGo).

But not all of those startups remain in the reckoning. Many have stumbled out for various reasons.

Shuttl was once India’s most-funded shuttle startup. At its peak, it operated 600–900 buses and claimed 30,000–50,000 daily rides, before being acquired by Chalo, a transport technology company, in 2021.

ZipGo, another early entrant, had big ambitions to scale across cities with an all-electric fleet. But it ran into trouble when the Essel Group, one of its backers, faced financial headwinds.

Even Ola Shuttle, launched in 2015 in over 10 cities, shut operations abruptly in 2018 as the company shifted focus back to core ride-hailing.

These exits weren’t just about product-market fit; they also reflected deeper struggles with operational viability and regulatory clarity, as happened with Uber in Mumbai and Hyderabad.

While the urban shuttle model holds undeniable promise, it remains knotted within a regulatory dragnet and is struggling to anchor itself amid shifting commuter habits. Scalable, citywide adoption hinges on clear policies being formulated by authorities, say experts. Until the regulatory clouds clear, the urban shuttle dream risks remaining just a promise in India’s metros—one that is frustratingly uncharted and unfulfilled.