India's second oldest Metro rail is allowing companies to brand stations amid declining ridership

In late 2015, I noticed that the subway stop that I took everyday to work had been renamed. The MG Road metro station, in the National Capital Region’s Gurugram, was rechristened the Syska LED MG Road station. Billboards of Syska, a lighting and technology company, were plastered all over the station.

What’s more, the next two stations on the Yellow line into Delhi had also been renamed. Another station, Guru Dronacharya, had been taken over by Indigo, an airline, while the Sikanderpur station was renamed Bank of Baroda Sikanderpur station.

In search of non-fare sources of revenue, the Delhi Metro Railway Corporation (DMRC) has sold the naming rights to a total of 43 stations across the National Capital region since 2014, including 14 new ones on the upcoming Magenta and Pink lines. This is roughly a quarter of all its stations.

Capitalism in action

The Delhi Metro Rail Corporation (DMRC), has leased the naming rights to each station to the highest bidder via an online tendering process. The contract is usually valid for 10 years, so the titles of the stations are, in theory, subject to change. The rights to the stations mentioned above were bought by Pioneer Publicity, an outdoor advertising agency, and sold to the respective firms.

It’s a win-win situation. The move provides a much needed source of advertising revenue for the authorities, especially as ridership has declined in recent months after two fare hikes in quick succession. The average daily ridership of the metro fell from 2.8 million in the previous financial year to 2.57 million in 2017-2018.

Securing the naming rights to a metro station is also a solid way to generate brand awareness for any company. The cumulative ridership of the Delhi Metro crossed 1 billion people in 2016-2017. That’s a lot of eyeballs. Not only do they get to the name the station, but they can also use the best advertising spaces within and outside the station as well deck the station in their brand colours - the Sikanderpur station is now orange.

Similarly, the privately-owned Rapid Metro transit system in Gurugram has also sold the rights to some of its stations to buyers like Vodafone and Micromax. The Bangalore Metro authority is also negotiating deals with Ikea and Infosys for naming and leasing rights to stations.

The DMRC should pass on some of the benefits to customers by using the funds generated to improve its services, adding two more compartments to each six-carriage train and freezing fares.