Goodbye Autorickshaw| Bangalore

Bangalore traditionally has been the Mecca for autorickshaw drivers. Unlike other cities there was no hail-a-taxi, or human-powered vehicles to offer any competition. The public transport a centralized hub and spook design (all busses converging to Majestic) which is good for a small Tier-2 city that does not have enough people for a bus load full of Point-to-point solution. As a result the city center is jammed and dying, while the outskirts are booming. The metro service is a joke with no parking space the commuters near the station, feeder service for multi-modal transport for convenient long distance office commute.

The frequent evening showers, strict policing around bars/pubs, huge female/immigrant/temporary/young population who are averse to investing into assets make it an ideal place for auto drivers. The streets are crowded and parking space is so difficult to have that most residents prefer not drive. The rentals of Rs 13/-per km are highest in the country and the strict licensing policy means that there is a perpetual demand of travellers and high occupancy.

There are 1,40,000 registered autorichshaw plying in the streets everyday generating close to INR 10cr ($2mn)of revenue. Considering that the operating cost is the lowest amongst all mode of travels, most auto-richshaw drivers enjoy handsome profits.

However there is a very thin line between benefiting from a situation and over-exploiting it. Rude behavior, extorting excess fare and tampering the meter is rampant. It is impossible to hire a taxi at less than twice the normal fare during rainy season or peak office hours. My wife lives 2km from her office and there is an auto stand next to the apartment & her office. Yet it was so cumbersome to haggle with the drivers that she chose to buy a car instead (even though there was no space to park the second car)

Recently the radio taxi service is giving them tough competition. TaxiForSure offers 4km ride for as low as 49/- and 14/- per km later obliterating the economic advantage  of the underpowered, noisy, vibrating contraptions named auto. Not only the taxi service is more polite, reliable but they have real doors and windows to protect the riders from the street pollution and vagaries of environment.

However it is not a simple question of economics or newer technology replacing the old. It is a question of better customer service prevailing. There are countless examples where monopolies benefit from favorable market situations. However those who take undue advantage of the situation are dethroned with a quick and merciless death. Good PR and courteous operations is the key for long term survival of business.

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Pricing of public services

The cost of 1 water tanker is more than the monthly water bill that we pay.

The cost of purchasing the invertor/UPS/generator is more than 2 year of electricity bill. Add to it the running cost and the diesel fumes etc. State electricity board electricity is not only cheaper but much more convenient.

The cost of public transport (bus, local trains, metro) is substantially less than auto, taxi or even self-driven vehicles.  Railway Trains are cheaper than bus, flight or cars. LPG is cleaner, greener and more convenient that its alternatives chopping trees for firewood or burning the smoky kerosene stove.

As an educated, smart and savvy statesman interested in public welfare what would you do? Well it’s no brainer that you would invest in the cheaper & more convenient for the mass public. After-all power-plants are not only cheaper but also greener (per unit electricity produced) than a private generator. Public transport can go a long way in reducing congestion, pollution and making urban life more affordable etc. etc.

But you cannot! Why because Indians are like crabs in the basket. They are Ok with not being able to escape poverty, but they will surely drag down anybody else who wishes to.

We want electricity to be provided free of cost, water is already provided free of cost, bus fares have increased by 5-10% over the last decade (while diesel and salaries have increased 5 folds), railway prices have remained untouched since the Independence of this country (well at least for the last decade).

Public enterprise is no different than a business the profit it generates paves way for further investment and expansion of service. In absence of appropriate pricing the services are either shut-down or will suffer with years of neglect & underinvestment. (Some subsidized services like healthcare, police generate profit through the economic development and social impact).

You don’t expect your grocery store to stock your kitchen and feed you for free. The rent you pay motivates the builders and landlords to develop new & modern real-estate. Similarly the price you are willing to pay for public utilities funds for better services. If we are willing to pay for it then we might as well move to forest. (Water in the streams is free, firewood/energy is free, nobody will tax you for walking)

In the 80s, my father used to joke that although the entire west have a Communist-phobia USA, UK & Western Europe is more communist than the so called communist countries. (With reference to unemployment benefits, pension policy, disability and maternity support) Today in Shanghai I am getting some top notch capitalistic advice. What’s more the gentleman even said that India’s communistic & populist policies will undo whatever economic development it has. Isn’t the world is so different from what it appears to be.