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Time to Corporatise Autorickshaws?

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Public Transport

There is a growing realisation among government circles that there has to be a big push towards promoting public transport in the country, together with steps to disincentivise private transport. But while there is no doubt that public transport is clearly the need of the hour and the future, it is very disappointing that the government has chosen to restrict its agenda to include only mass transport media, such as buses and metro trains. It has not focused on other forms of public transport such as taxis and auto-rickshaws, which provide a more "personalised" service to passengers.

What differentiates autos and taxis from buses and metros, and indeed what makes them more important, is the fact that they offer an end-to-end service. That is, you can hire an auto or taxi directly from outside your house or wherever you may be, and it will drop you right to the doorstep of your destination. And generally the waiting time is also less, as any auto or taxi can ply to any part of the city.

By contrast, if you are commuting by bus or metro, you need to first go to the nearest bus stop or metro station. Once there, you need to wait for the appropriate bus or train to arrive. And lastly, you need to get off at the stop nearest to your destination and then make your way from there.

So clearly, in terms of convenience, buses and trains cannot possibly compete with autos and taxis which come to the customer rather than expecting the customer to come to them, and also act as a single mode of transport from start to finish. And for this reason alone, I would personally rate autos and taxis as much more important than buses and metros.

So why has there been (and still is) utter neglect of this form of public transport?

I live in Bangalore. Auto drivers here are infamous for grossly overcharging, refusing to ply, and being rude and verbally/physically abusive in general. And the scenario is pretty much the same in most Indian metros, be it Mumbai, Delhi or Chennai. Honestly, I do not know whether the auto drivers overcharge in order to make more money for themselves, or whether they are forced to do so to recover the costs of hiring the auto/taxi imposed by unscrupulous owners, many of whom are, or have contacts to, powerful people in the establishment. And therein lies the answer to the above question: no one is interested in fixing the problem because it suits those who are in power, and because there is no serious political impact of not fixing it.

Which begs the question: is it time to corporatise autos and taxis in India?

There is already limited corporatisation in case of taxis in select Indian cities. For example, Meru Cabs and Easy Cabs run taxis in Bangalore, Mumbai and other cities. Apart from these, there are various lesser known local entities which operate taxis in the respective cities. And while the fares are indeed higher than the Government-approved fares of taxis, anyone who has travelled by these taxis can vouch for the fact that there is far greater transparency in terms of a clear fare structure, which results in a hassle-free travelling experience.

But unfortunately, taxis will always remain less popular than rickshaws in India due to the higher fares, and therefore it is very important to extend this trend to autos to have a real impact on the ground situation.

Corporatising autos and taxis has several immediate benefits, as outlined below:

  1. Benefits for passengers:

    a. Transparency of ownership: If autos were corporatised, then a corporate entity would own the rickshaws and hire drivers to drive them. Thus, the ownership would be clearly defined and transparent, and the auto drivers would have no more incentive to demand exorbitant fares. This is unlike the present scenario, where no one knows who actually owns the rickshaw, and therefore the public anger is not directed at any one entity , which makes it easier for the authorities to do nothing. If the ownership was well-defined and known, then people and the media would agitate in a more focused manner, which would then compel the authorities to take action.

    b. Transparency in fares: When a corporate entity runs a taxi service, there is a transparent fare structure that is widely advertised and thus well-known. People are therefore more aware of what they need to pay. By contrast, when it comes to autos today, the official fare structure fixed by the government remains only on paper, because the auto drivers demand much higher fares and refuse to ply if you don't pay up.

    c. Accountability: Any corporate entity's future depends on its acceptability with the general public, especially when there is competition. Therefore, corporate entities are inherently accountable to the people, and so have to focus on maintaining their brand image. Thus, it would be much more unlikely for rickshaws operated by corporate entities to indulge in overcharging, denying service, etc., because then the brand image would suffer in the long run. Also, an auto service run by corporates would also have a well-defined grievance redressal structure that would generally be better operated than the RTO or Traffic Police's Complaints Department.

    d. Technology-driven experience: If autos were owned by corporates, they would have the money to invest in technology to offer a superior experience to customers. This could be in the form of websites and call centers to connect to customers, tamper-proof GPS-based or electronic meters, additional payment options (credit card, any local/national unified travel card, vouchers, etc.), entertainment options (newspapers/magazines, TV/radio, etc.) and so on. Individual auto drivers could not possibly think of offering these kind of facilities or services to customers.
  2. Benefits for auto drivers:

    a. Assured income and benefits: An auto driver employed by a corporate entity would get a salary which would likely have a fixed component as well as a variable component (based on his earnings). Not only this, he would also be eligible for other benefits such as pension and provident fund, medical benefits, various allowances, leaves, etc. This would go a long way in meeting the Government's agenda of bringing more people under the social and medical security net.

    b. No credit hassles: Since the auto drivers would be employees and not debtors, they would be free of any worries of repayments, etc. and would not be under the grasp of unscrupulous owners or lenders.
  3. Benefits for the Government:

    a. Freedom from regulating fares: Every now and then, auto and taxi drivers go on strike to demand a hike in the fare structure. This puts an unnecessary burden on the local Government and also inconveniences passengers. With corporatisation, the companies running the rickshaws would be free to decide their own fares, and the Government could play the role of a watchdog to ensure that there is no cartelisation or arbitrary charging of fares.

    b. Higher tax income: If corporates were to run rickshaws, they would pay taxes to the Government based on their profits. And since the salaries of the rickshaw drivers would also be known (unlike what it is currently), they could also potentially be eligible for paying income tax. Currently, no one knows who owns the auto, and what is the owner's income. Even the net income of rickshaw drivers is unknown.

    c. Widened social and medical security net: As explained above, rickshaw drivers would be eligible for social security and medical benefits, in line with other salaried professions. This would meet the Government's social agenda of widening the social and medical security net.

As can been seen, the potential benefits are immense and widespread, and far outweigh any concerns anyone may have regarding corporatisation in general. I genuinely feel the time has come to relook our antique policies and free public services from the inefficiencies of Government control.

Your thoughts and comments please...


khshri's picture

Establishing Corporate Auto will be an up hill task.

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The advantages of corporate auto are definitely great as you have explained.

But puting in to force practically is a humongous task.

We might remember that two years back some did try that in bangalore with the name "Easy Auto":

And what happened to it.... The initiatives must be more pragmatic, deployable in actual condition and sustainable.

Else it would be utter failure.


May be having auto drivers as a contractors just like most of the cabs would be more feasible. We can definitely try for a semi corporate model, where the higher layers deal with accountability and tracking while the lower layer deal with pracitcality.


murali772's picture

would be better off without them

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Individualised forms of transport like the auto take up road space at the cost of public transport services, and therefore the priority needs to be for public bus transport services. And, if public bus transport services are efficient, you can reduce the dependence on autos (and cars and mobikes) to the barest minimum. And, for that to happen, this sector needs to be opened out to effective competition from the Corporate sector, and that's what the talk here (as also in the associated blogs that will get listed in the margin when this blog is accessed) is all about.

And, as for autos, I for one would like to see this ugly 3rd world contraption phased out of the city, earlier the better (for more on that, click here)

Muralidhar Rao
vijaypadiyar's picture

Thanks for the comments

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Hi guys

Thanks for the comments. Responses below.

@khshri: Govt. does not have to put the model in force. It simply has to reform the rules to allow corporatisation of rickshaws, similar to taxis currently. The private players will take care of the rest themselves and make it a success. That's the beauty of private participation - the Govt. does not have to do anything except acting as an enabler!

With reference to Easy Auto, the reason for it not being popular is again the same - Govt. tried to do everything on its own. As a result, there was no adequate marketing, promotion, etc. due to which it never really became popular.

Here, the Govt. does not have to be involved in running the rickshaws - let the private players take care of it. Govt. simply has to reform the rules and create a level playing field. Rest all will take care of itself.

This is similar to why ICL failed and why IPL succeeded. In case of ICL, the promoters tried to do everything on their own. In case of IPL, the BCCI simply laid the infrastructure and let the team owners do everything else.

@murali772: You cannot put autos/taxis and cars in the same bracket. Autos/taxis ply throughout the day, unlike cars which only ply occasionally but yet need road space to move.

Also, no matter how efficient bus/metro services are, they can NEVER provide the level of convenience that autos/taxis can, because you can't provide doorstep service to every single house in the city, no matter how many buses you have.

Also, if too many buses are there and they don't have much occupancy, they will end up wasting more space than even rickshaws and cars.

Of course, I totally agree with you that autos need to be phased out soon. Maybe Tata Nanos would be a good replacement, rather than Revas. But that's a separate debate altogether. Till then, I would love to see this happen.


Vijay Padiyar

R V Raja Rao's picture

Driving is enjoyable in Bangalore if Autos are off the Road.

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Driving is enjoyable and peaceful in Bangalore if autos are off the Road.  In Bangalore we give too much importance to Autos and taxis.   At the international Airport Meru Cabs gets priority over private vehicle parking.   At Railway Stations Autos get priority over BMTC Buses.     In Bangalore BMTC Bus stops are located away from the railway Stations.  Whereas in other metros like Chennai, Buses are given priority over Autos and taxis and bus stops are located right in front of the Railway Stations.  How do you like if such system is introduced at Bangalore.   

abidpqa's picture

No. Why should autos be

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No. Why should autos be corporatised? Why should some managers get power over so many people. Anyway, autos as it exists now represent almost perfect competition, with low barriers of entry etc. In fact the auto industry should be liberalized; there was a report about allowing increased number of autos. There should be no restriction on the nubmer of autos.

Main problems have been regulation. There have been many numbers to call and complaint; there have been some five numbers published in Praja. Somehow, they have not been effective. Auto problems are not much different in all other fields. Is the housing, education, healthcare rightly priced? Housing may get affordable with competetion but not other two, but that is another matter. Autos will be working well when Everything starts to work well.They cannot be independant.

And autos need not be eliminated from the city. One complaint against them is they dont go short distances. Autos are for short distances, and they will have to do that when Metro starts and people are familiar with the city so that they can plan the trips combining buses and autos. Auto is a great optimum design.

But no autos should be allowed to be run without the silencers. Even buses have lesser sound than the autos without silencers. This problem may have started with the diesel autos with old technology. They were so loud. Maybe the sound of these diesel autos had bee accepted as sound of all autos!

R V Raja Rao's picture

Autos need not be eliminated

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Autos need not be eliminated from the city but give priority to mass transport vehicles like BMTC Jnnurm etc over autos and make it easily accessible for the commuters who are combining long distance travel with local travel.   Sometime auto fares are more expensive than the fare paid for long distance travel by bus/train, especially when autos are hired during night and early morning.

Autos are only complementary to our transport system and perfect competition exists under perfect market conditions only. comment guidelines

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