Why do auto rickshaw drivers overcharge?

-Prashant NARANG
- ISPP 2006 Delhi and ALSS 2006 Mumbai

• Any other medium like metro trains or even hi-capacity buses cannot be a substitute for IPT-intermediate public transport (autos and taxis) because these provide round the clock mobility, right at your doorstep and are crucial for ports of entry like airports and railway stations. Not just that, these can be used easily for commuting by convalescent, patients, children, aged and tourists also in case of emergencies. They provide comfortable and personal commuting experience. They are most of the time mobile; hence require parking spaces for minimum time.
• It is easier to become an industrialist in Delhi than an auto rickshaw driver.
• Thanks to license, quota and permits that a new or even a second hand auto rickshaw in Delhi costs almost twice. The cost of an auto rickshaw is higher than a new maruti car in Delhi only- around three lacs. It is not so expensive in Ahmedabad or in Mumbai. Why? Only because of government policies. Some rickshaw owners give their vehicle on rent to the poor drivers and charge very high rents (almost thrice) from auto rickshaw driver (ARD) as the permits are closed. So for a new entrant into this profession, the only possibility is to take a rickshaw on rent for Rs. 250-300 a day from the rickshaw owner. In other cities, this rent is around Rs. 100-150 a day. Here in Delhi, the government has not revised fare for past five years. It is least in Delhi- Rs. 3.50 per kilometer. In all other Indian cities it is much higher, up to Rs. 6.50 per kilometer. It is not feasible to pay up such high daily rent with this kind of fare structure. This discourages the ARD to ply by meters and they charge a higher fare from the commuter. Unaware of the policies, the commuters misunderstand and blame the ARD. Even then an ARD barely manages to save only Rs. 3,000-4,000 (85-95 $) a month, as he ends up paying Rs. 6,000-9,000 (170- 190 $) a month to the rickshaw owners. A chunk of this saving goes into maintenance of his vehicle. Whereas an auto rickshaw driver in Ahmedabad earns Rs 9,000 a month. No wonder, he never denies the commuter.
• Why is only a particular model of a particular brand of auto rickshaws allowed? Why not second hand cars? A second hand maruti costs Rs. 40-50, 000. If there is no restrictions on what a private vehicle user can driver, then why so many restrictions on them?
• If the government opens up permits or abolishes permit system, the rentals for the vehicle would automatically come down, hence helping the auto rickshaw drivers to earn an honest living. Though even in that case, the fare structure need to be revised.
• Mind you, this is the only private service/sector, where the government enforces what to charge. Can you quote any other private sector other than transport (bus and auto) where government tells what to charge from the consumer? In Scandinavian countries, neither there is any permit system nor there government fare structure. Hence there are taxi drivers competing with each other trying to provide the best service at minimum charges. For tourists and first time visitors, air port authorities get into contract with taxi companies to ensure that tourists are not cheated. But India is not yet liberalized for poor communities like auto rickshaw drivers. Government is exploiting this poor community. Better it should pull its hands out of deciding fare structure after liberalizing the market. They should open the market and they cannot give the excuse of traffic congestion, as there are only two percent auto rickshaws in Delhi.
• What is fare/price? It is customer’s perception of the service or product consumed. Hence the market decides what the fare/price should be. Who decides price for cold drinks, chips, chocolates or toys, or clothes? Who fixes up what a private lawyer/doctor/teacher should charge?
• Is there a restriction in other professions that there can be only a fixed number of professionals? No. Then who decides? The market! It is simple demand and supply rule. Why is there restriction on number of autos, whereas there is no restriction on number of private vehicles? 94% Private vehicles, 2% auto rickshaws and 1% buses (as accessed on 29 november 2006) http://www.cseindia.org/campaign/apc/pdf/parking-policy.PDF
• Can you quote any private entrepreneur whose uniform is decided by government other than auto rickshaw drivers? Why do we doubt that they would not wear good clothes in absence of a law? Government should decide uniforms only for its employees and prisoners (not even for them). Auto rickshaw drivers are neither its employees nor prisoners. The law just becomes a tool for bribery and corruption leading to their harassment.
• An ARD has least options to choose the fuel/ model of vehicle he wants to ply, or cannot fix up the fare, cannot wear clothes of his choice, has to renew his commercial driving license every five years (20 years in case of personal license), cannot expand his business or buy another vehicle, cannot sell his vehicle (except to the government as scrap) and has to pay very high price for purchase of his vehicle. He pays parking taxes to the government for parking space that does not exist. Where are those 312 parking slots meant for their parking? They do exist- mostly on papers.
• Why is there no bank finance facility available to them for buying auto rickshaws?
• ‘Multiple commuters sharing’ is not allowed. It can ease congestion.
• What about the fare revision committees? Why have they not submitted their reports? The last one- khullar committee had advocated for allowing branded auto rickshaw companies. The government should allow brands and co-operatives to emerge in this sector.
• Heavily regulated intermediate public transport has led to drastic increase in private vehicles resulting in heavy congestion and parking problem.http://transport.delhigovt.nic.in/info/info8.html

Why are those challans returned?
From 1998 to 2003, permit transfer was not allowed. Though one cannot think of any rational reasons, but that is how our government works. Of course there would have been auto rickshaw drivers who wanted to leave or join the profession for number of reasons, could be personal or medical or financial. Or some drivers would have died; hence how can the government put an abrupt stop on permit transfers? But it did. The result was illegal drivers. In 2003, when the government relaxed the policy, thousands of permits had been transferred illegally. Then Government hiked the permit fee from Rs. 50 to Rs. 1950. Why are such rules made that cannot be followed?