(In the last post, I raised an issue which has nagged me ever since I came to Bangalore. The auto-rickshaw drivers. I even put down a rudimentary costing, and their expected revenues. And I left it with a question, not quite answering it. In this post I intend to answer it.
I forgot to address this piece for my international readers who are not familiar with autos.
Autos are three-wheeler vehicles (they are also known as tuk-tuks in Malaysia, I think), used commonly in metros for passenger transport. The smaller versions ply as cheap taxis for atmost 3 people, though it is not uncommon to see upto 5 people stuffed in that space. There are larger models which are usually found in smaller towns, and ply as public transport in place of buses. Auto-rickshaws are driven by a set of people who are known to be very clannish in the form of their unions. These autos are mostly rented out by the auto-wallahs from richer people who would buy a lot of autos. More often than not, these owners are ex-government officials, and a large proportion from the police. This, very obviously creates large conflicts of interests in terms of regulation, but that is not the discussion point in my piece.
These auto-rickshaws are cheap to purchase and maintain, and hence very popular in developing countries like ours. But they are increasingly being seen as a menance. My 4-part series intends to provide a solution, from which all the parties, the passengers, the government and the auto-wallahs, will find amiable.)
(All figures in Rs.)
Expected Revenues: 12*70*2 = 1680
Food during the day: 100
Total Costs: 600
Table 1: The daily profit-and-loss statement of running an autorickshaw driver in Bangalore. Refer previous post.
Table 1 describes the economics of running an auto-rickshaw. What is wrong with this?
Firstly, and least importantly, the auto-wallahs are not running through-out the 12-hour. A reasonable assumption would be 6 to 7 hours. This brings down the daily revenue to about Rs. 800-900. The profits tumble down 3-5 times, to about Rs. 200-300. That’s a monthly salary of Rs. 6000 – 10000. Imagine living in Bangalore and supporting a family of four with that. I am pretty sure that the government assumed this while fixing the fares. Recently, the auto-wallahs went on strike demanding that the fares they be allowed to charge. Their demands were met only partially.
I was coming back to college once, in an auto of course, ruminating over the conversation I had with the MD of Titan, Mr. Bhaskar Bhat. He was discussing how once the workers were demanding a high-payout for the voluntary retirement scheme, which was probably 3 to 4 times the industry norm. Without batting an eyelid, Bhat gave it to them.
On asking why he did so, “These workers’ aspirations have risen because they have worked with us. All this while we have been telling them that they are the best, motivating them to do their work. But now when they are made to leave, we are being stingy. Of course, the workers are doing to us, what we did to them. They want the best, because they were made to believe they were the best.”
Then, it struck me. Of course, these auto-wallahs should be disgruntled. Everywhere, people are allowed to charge whatever they want. No questions asked. Why shouldn’t they be allowed to charge whatever they want? They are made to live like a socialist relic, when everybody around them enjoys the fruits of capitalism, and this could not be brought out more starkly in any other city.
In effect they are rebelling against the system that have been forced upon them. Autos are not an essential service, buses are. Therefore, the government technically has no right to fix fares for them, though it has every right to regulate them in other aspects.
It is not about whether are charging too much or not: it is about whether they are being allowed to charge whatever they want while running a business.
The government’s line, I think, is that the public should not be made to pay so much.
That’s not true. I think the passengers get more miffed by the fact that auto-wallahs charge more than what they are “allowed” to charge, so in effect, they feel that they are being cheated. If the government says tomorrow that the fares are to be doubled, maybe there would be some quarters who would be angry about it, but the general public wouldn’t be so angry, because they feel the government has verified that this is a fair price. This has been proven in the recent strike. The government, even though they are the elected representatives, did not ask for a public opinion and none was offered. The fares were negotiated behind closed doors between the government and the union chiefs. The public accepted whatever price they were given.
(I am discounting other things that could happen if the fares are doubled: Citizen groups questioning the government on kickbacks, and the politician-policemen-autodriver nexus. Those are issues as well, and need to be looked at as well.)
In a sense, I think the public does realise that the auto-wallahs are being cheated out of what is rightly theirs, but conveniently hide behind the pillar of morality when paying the fares.