The shift towards sustainable transportation has become an urgent global priority as the impact of climate change continues to unfold. UNDP has conducted a policy experiment in Hue city to explore the potential of electric motorbikes as a greener alternative to traditional gasoline-powered ones. The experiment targeted shippers who deliver goods by motorbikes as they are key stakeholders in the urban mobility system. The policy experiment sheds light on how policymakers understand the key problems, the needs, preferences, and behaviors of shippers regarding electric motorbikes and to identify evidence-based policy interventions that can facilitate their adoption. In this first blog of our series on public sector innovation focusing on innovation policy design, we share the motivations behind this experiment, its key findings, and the collaborative efforts that are shaping a greener future for shippers in the country's last-mile delivery sector.

Why This Policy Experiment?

Viet Nam’s transportation sector has been a significant contributor to greenhouse gas emissions. In 2016, the sector emitted more than a fifth of the country’s total emissions. It is estimated that there are 60 million gasoline motorbikes in circulation in Viet Nam and they emit up to 42 million tons of CO2 per year depending on the number of traveled kilometers [1].

E-mobility has been identified as one of the 14 circular economy opportunities in the Metabolic Analysis. Optimizing vehicle utility/efficiency and electrifying the fleet has the potential to reduce GHG emissions by 210,000 tons a year by 2030. 

The Government has taken steps to promote electric vehicles (EVs), including the reduction of registration fees [2] and excise taxes for lithium battery and electric cars [3]. These measures are not enough to encourage people to adopt EVs. Especially in the delivery sector, the most popular vehicles used for last-mile delivery are motorbikes while the investment cost is high, the charging infrastructure is not fully ready, and shippers still question the new technologies.

This experiment placed shippers at the center of the research, and tested solutions addressing the shippers’ constraints and concerns in switching to e-motorbikes. In this journey, policy makers were actively involved in the design, implementation, and evaluation of the experiment, which enabled them to learn from the evidence and feedback generated by the experiment. This informed their policy decisions and program to promote EV in Hue city.

This Experiment’s Objectives?

Two research questions drove the experiment’s design: “If e-motorbike helped increase the economic benefits of shippers” and “If green lifestyle contributed to add values to shippers and customers?”. The experiment aimed to ascertain whether adopting electric motorbikes could indeed lead to economic gains for shippers and whether the green image associated with these vehicles would resonate with both shippers and their customers.

Experimentation and results

Prior to designing the experiment, the research team conducted on-site interviews with shippers to validate assumptions related to barriers for shippers to transform from gasoline to electric motorbikes. The team also collected data from piloting delivery services by e-motorbikes in Da Nang. Those validations were used as inputs for an experiment design workshop gathering shippers and policy officers from different departments in Thua Thien Hue to identify experiment steps and interventions to answer the two research questions. A baseline assessment then was conducted involving 63 shippers to understand their concerns and pain points. Escalating fuel prices, maintenance cost, the impact of air and noise pollution, and worries about the unavailability of battery charging infrastructure if they shift to e-motorbikes, emerged as central concerns. The experiment was then executed over a span of 30 days involving two groups of professional shippers: one group continued to use gasoline motorbikes, while the other tried e-motorbikes. 

Innovative solutions include battery swapping stations that enable shippers to exchange their batteries within 2 minutes instead of 3-8 hours of direct charging, and an automated system introduced to relay real-time information on charging stations’ locations.  

The experiment yielded promising results (see figures below) that resonated with shippers on multiple levels. E-motorbikes, as indicated by the experiment’s statistical data, were not only more cost-effective but also building a greener image for shippers.