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Autorickshaw - Case for a decent service and good business model!
Written By kbsyed61 - 10 December, 2011
Bangalore Autorickshaw Analysis Last Mile Transportation public transport business model
Background
Mere mention of word 'Auto' starts ringing the bell of many different voice. Don't these voices sound familiar?
....Auto drivers seem to create the maximum of problems in Bangalore. Where should we start?
...They drive very rash driving. And hitting anyone on bike or on foot, their brotherhood (other auto drivers) tend to support them.
...Most of the times not ready to go for short distances or to the places where they do not want to go. I think they are legally supposed not to deny for any place and a fine-system is also there if they deny to go somewhere.Courtesy - MyBangalore.com
Have you ever paid Rs 200 for an autorickshaw to take you from Indiranagar to MG Road? That is what passengers had to do on Friday, thanks to the auto strike. They separately paid the amount the meter displayed even if they were sharing a ride; the fare comes to Rs 50 on any other day.
Source - Times Of India
On the other side we do hear about the plight of the auto drivers,
- Complaining of ever increasing fuel price, but can't charge more
- Uncertainty in monthly income
- Police Harassment
- Occuptional Hazards - Health, Safety
- Total Lack of any civic amenities - Toilets, Recess are
The third stakeholder, Government, has its own story to tell:
Most autorickshaws are not owned by drivers. They run them on daily rent. Once his shift is completed, the driver should leave the vehicle at the owner’s house and return. Many drivers make up for the “dry runs” by charging the commuter double the meter fare. The police feel the autorickshaw drivers’ unions shouldn’t oppose modernisation. The unions are against the use of GPRS systems and mobile linked facilities such as those in the airport taxis. “If we don’t address these problems, things will never improve even after 50 years from now,” points out Sood.
Courtesy - Deccan Herald
An autorishaw service that we all aspire for!
Given this background let me try to lay a case for the need to have better auto/taxi service system in city of Bengaluru. Gone are the days wherein PT services can operate in their own insulated worlds. This is an era of inter-connectivity and cross-connectivity. Each one of the PT services should be complimenting not competing each other. Clearly the time has come for reforms in this sector. One important aspect and reality about 'Auto Rickshaw' is, it is an integral part of the public transport system in any urban/semi-urban setting.
Stake Holders
- Government - Custodian, Regulator, Enforcer, Facilitator
- Commuter - Customer, sole source of income
- Service Providers - Auto Rikshaws Owner, Driver
High level Objectives
For Commuters
- Good Reliable Service
- Guaranteed Ride - No Refusal
- Market Regulated Fare
- Choices - Immediate On street, On Schedule
- Dependable and safe ride
For Service Providers (owner and driver)
- Fair and transparent licensing system
- Decent Financing options
- Guaranteed returns on investment
- Guaranteed monthly income for the operator/driver
- Toilet/Recess Facilities across city
- Personal and Vehicle Safety
- Personal Benefits - Health Insurance, Life Insurance
- Transparent system for fixing meter charges
Government
- Framework for auto rickshaw service regulation, operation, Licensing and enforcement
- Framework for transparent system of fixing meter charges in tune with market costs
- Provision for technology and system to aid regulation of the service
- Provisioning of commuter and service provider grievance system
- Co-ordination of different departments - Police, RTO,
Is it possible to design a decent business model which can deliver the above listed objectives? I am sure yes, we can.
Let us throw some ideas here.
COMMENTS
Anithasunil - 13 December, 2011 - 05:18
I commute to Mahadevpura, daily. Since there are a lot of volvos to ITPL, the best route for me turns out to be using the bus till graphite india, and taking an auto for the last 1.5 km stretch. On this stretch, where the frequency of BMTC buses are too low, there are a group of about 5 autowalas, who are stationed on either side. They charge a flat Rs20/- for this stretch. Sometimes, they take more than one person, and each person pays Rs20/- . But, they do not refuse you a ride at rs 20/- even when you are a single passenger. They never take more than 3 passengers either. I am happy, since, I almost always get an auto as soon as I get down from the bus. I do not have to negotiate the charge every time I go for an auto. And, given the consitency of charge, and the assurance of an auto on this stretch, it is good enough for me.
There was a time, when any auto on this stretch used to ask for upto Rs 50/-. And, at that time, most people (including myself) refused to take an auto. We used to wait for the bus however infrequent it might be, or walk! These days, with the current system, I see more and more people taking autos.
And the more interesting part is that I seldom see these autowalas going for long trips. They seem to be happy with the to and fro traffic on this stretch.
I wonder if it is possible to interview these auto drivers, and get to know how all they are facing/overcoming the problems faced by the autowalas.These guys seems to have formed a business case for themselves, and if it can be replicated for different parts of the city, that will be good. And more autowalas will take it seriously when members of their tribe are talking about the model, and how it works.
I am not able to talk more than necessary to them, for the lack of language skills :(
On the other hand, I have a route which will save me atleast 30 minutes each way, compared to the ITPL route. I can some on the bus till EMC2 on outer ring road (and thus escape all the marathahalli, kundenahalli, graphite india traffic blocks), and take an auto for the last 3km stretch (through a short cut - ghosala road). Unfortunately, there is no ferrying service from the autowalas on this stretch, and the negotiation usually starts from rs80/- to rs 100/-. And for this reason, I do not see many people form my office taking autos on this route!
If it was possible to induce some auto drivers to take up the same model as the graphite india - mahadevpura stretch, I would be happy!!
I have seen other business models as well. The last 1 km stretch near my home has infrequent bmtc services. There are quite a few apartments about 1km from themain road, and the autowalas here go for a sharing system. You get dropped at the apartments (or nearby) by paying a charge of Rs 10/- the charge remains the same, even when there are 5 passengers in the auto (three on the seat, and one on either side of the driver). The model is flawed from a safety perspective. But, considering the 50 speed breakers, and the speeds at which vehicles move on this road, and the fact that most passengers on this road are daily wage earners / labourers etc, it seems fair enough! At least it provides an assured means of transport, at an affordable cost, for the last mile. I guess this is similar to the sunranjandaas road auto sharing that was mentioned, with the difference that here, the cost benefit is passed on to the passengers to some extend.. And that seems to be because on Suranjandas road, "techies" seem to be a good part of the crowd, whereas on the stretch I was talking about, it is mostly daily wage earners!
I would have preferred it, if they would take no more than three passengers at the same rate.. If that is too much to ask for take rs 15/- per passenger, and make sure that no more than 3 passengers are made to travel in a trip..
What I would want is an affordable means of transport, which is predictable as well. I do not want the hazzle of negotiating the charge every time, and there should be some consistency. Paying upto 1.5 times the meter charge is ok with me most of the times! It is when it goes beyond 1.5 or double, that my blood starts boiling :(
Concept of "HOME" stand
Another thing I have noticed is that In bangalore, the territories of autowalas seem to be marked. Usually, when an autowala asks for double charge, since he wont get a return trip, I am amused. They say that for any destination. Even during peak hours, when you travel to MG road, they complain that they wont get a retunr trip! why is it always necessary to get a return trip? Another trip from the current destination should be good enough!
On the other hand, autodrivers are not allowed to wait at autostands other than their "HOME" stand.. There are instances where, I got an auto by "waving the hand" and not from the auto stands, and the autowalas at the stand objected to it.. (The same graphite india stand!) They abused the non-member of the 'stand' and make sure no other autos picks up passengers from near the stand.. I guess this is one of the reasons autos often claim "return" as the reason to charge more. They really have to return to their "HOME" stand to pick up passengers, or keep running on the road till they get a passenger!
Recent Service Models - Part 1
kbsyed61 - 19 December, 2011 - 15:31
Disclaimer - The information and analysis given below is purely for comparison and understanding the existing models. It is based on available information from public domains mostly from Internet editions of news items. Therefore beforehand I would like express my deep regret for any discrepancies in analysis information and data, which is purely unintentional.
Easy Auto - Bengaluru
'On call Auto' Service launched by Internet World Wide providing the auto service on Phone Call. Started in PPP model with govt stake holders BTP and RTO. It followed a model wherein the Autos who were interested to join the service and get GPS and radio equipment installed by IWW. In turn they were required to charge Rs. 3/- as the service charge from every passenger and pass it onto the 'easy Auto'. Passengers can call the 'easy Auto' service number, the Easy Communication Center, which in turn relays this information to the available autos in the area. Autos in area would take the request and confirms to passenger via Comm center. Passenger then is picked from his/her house and dropped at the destination. Meter Fare plus Rs.3/- service charge is paid by the passenger.
As things stand, the 'Easy Auto' Telephone number and SMS is not in service. It has fallen aside to be resurrected in near future. The 'Easy Auto' CEO Padmasree Harish lays the blame on Bengaluru Traffic Police and RTO.
Positives:
- Well intended initiative
- Provided passengers with convenience of getting the auto ride by calling a number.
- Opportunity for Autos to get more business
Negatives:
- Dependent on voluntary joining of autos
- Unions were vary of another competition - Fear of Change
- Not a business friendly model as service charge of Rs.3/- to be collected from passengers and then autos were to pass it onto the 'esat Auto'.
- Except for auto on demand, passengers didn't get any additional service.
- Auto except for additional passengers, no other needed benefits were there for them like Insurance, Easy credit etc.
- Service levels were not guaranteed as auto were not own by 'Easy Auto'.
Courtesy - Citizens Matters
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G-Auto - Ahmedabad
Started by Nirmal Foundation run by Nirmal Kumar, an MBA from IIM Ahmedbad. Veru similar to Esay auto by with lots of additional benefits to passengers and more importantly to the auto driver/owner.
Outright it states its service objective of financial upliftment of auto drivers and its owners. It rightly positions itself as "service Provider" thereby making it clear that its success lies in providing passenger friendly service with safety.
Positives
- Any Time Rikshaw, Airport Express, Tourist Express via Tele Booking 24/7
- Newspaper, Magazines, City Maps for passengers
- Receipts for the auto fare
- Accepts Feedback/Complaints via telephone/SMS.
- For auto drivers, it offers health insurance, Life Insurance, Credit facility arrangements through Banks, Safe Driving coaching and assistance for children's education.
Negatives
- Service level not guaranteed as autos are not owned and operated by Nirmal Foundation.
Courtesy - The CityFix
kbsyed61 - 11 December, 2011 - 13:50
Naveen,
Are you suggesting that reform of 'Auto' service is waste of time and effort? It shouldn't be attempted? Past failures likes Easy Auto need not be true at all times?
It is said failures are stepping stones for the success. Provided lessons are learned from failures and a course correction is undertaken.
-Syed
idontspam - 10 December, 2011 - 07:08
Good post, I think its appropriate for all to get access to work done by CiSTUP, IISC in this regard, hope someone from there will post their study or excerpts from the study for us to understand & analyse with additional data
idontspam - 12 December, 2011 - 11:22
Enforcement is another challenge
We are unable to do any enforcement on the unorganized auto services anyway. Any enforcement will only be a step up from here. What do we need to enforce? Its a huge laundry list running since the beginning of time on these threads. We have found even BMTC have behavioural issues. Yesterday a bus driver ran over some people and was administered "justice" by the people. Anyway this thread is not about BMTC its wether the current autos take up these reforms or we get a new service politically different so it can run on new rules.
Let us list what needs to be enforced.
Dangerous behaviour/driving on the streets - This dangerous driving has largely been solved because congestion does not allow speed anyway. On empty streets cars (especially taxis) drive more dangerously than any public transport. Have we banned taxis because they drive dangerously? No we put speed guns on them instead. Licensed auto agencies will be given training on driving behaviour & the form factor of the vehicle will not allow for the kind of manuvering that three wheeled autorikshaws are famous for. Zone of operation being 3 to 5kms within collector & local streets with main roads being used for connecting or going across does not allow for crazy driving on main roads. GPS also captures avg speed travelled by each identified vehicle which can be used to penalize the operator or even cancel his license.
Overcharging/mischarging customers - Smart cards will reduce cahs transfer & allow the central regulator to use statistics to determine when commuters were boarded & how much they were charged. Every tap is registered directly in systems which will be the basis of determining if load factors during peak & off peak were as per service levels. Common mobility cards will determine what will be the fare sharing between modes & who fed whom.
Technology has answers but is not being relied upon because it is optional now. Right now Bus/Auto will run without it also. Once you make all payouts tied to the data provided by these technologie things will fall in place.
Coming to profitability, In your calculation mileage is assumed to be 10KMPL. Tata magic gives 20KMPL in city so costs reduce by half. EMI will also be 30% lower in retail & upto 50% less in bulk lowering the cost even further. GPS units can be procured under a bulk scheme unit costs will be very low. Smart cards have already been issued by the metro. Over a period of 30 years these costs are not significant.
Its probably time for a pilot to test this theory & put to rest all speculations. Proof is in the pudding, no?
PS: Share auto is already running in Suranjan Das road on the old airport road end, they charge flat Rs 20 for the 4 kms from each pax. Upto 5 pax are squeezed even on the drivers seat getting him a neat Rs 100 per trip. With around 6 autos they are always full during peak hours. They in fact carry more peak hour pasengers to Bagmane tech park than the metro.
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