Comments on Tidbits here and there: Meter Jam and my proposal to fix the Auto menace

Being the wannabe economist that I am, let me offe...

2010-08-26T01:42:05.837+08:00

Being the wannabe economist that I am, let me offer you an analysis based purely on economics. Let's try to understand the incentives at play here. One would imagine that the auto-driver is interested in maximizing his earnings. When an auto-driver refuses to ferry you somewhere, he is losing business. Why then, is the behavior of auto-drivers "unruly?" The auto-driver's true cost of taking you somewhere includes not just the fuel cost but also the cost of the time taken (a function of traffic) and the expected distance/time until he finds another passenger. When an auto-driver refuses to take you somewhere, it is because he believes (rationally) that he can find another passenger soon enough to compensate for the loss. Of course, he does not have perfect information nor is he likely to think in such abstractions, but he is making a shrewd bet based on his experience.

Another reason for the "unruly" behavior is that an individual auto-driver does not "own" his reputation. Reputation for him is an externality. In other words, his behaving badly does not affect his reputation negatively but counts against auto-drivers as a whole. This is a well known problem in economics known as the "tragedy of the commons." This is similar to what happens with pollution.

Consider your proposal of not allowing auto-stands. This clearly increases the costs for the auto-drivers. If that wasn't the case, you wouldn't see auto-drivers standing around even today. Higher costs for the auto-drivers can have one or more of the following consequences depending on the politics of the day. One, demand for even higher rates from the auto-drivers. Two, fewer autos on the road because driving an auto isn't as profitable any more. Three, more traffic on the roads.

My recommendation, therefore, is diametrically opposite. De-regulate the system completely. Let the government not interfere with the pricing but allow and encourage corporates to own multiple autos and set their own rates. My guess is that a system similar to Meru cabs will emerge. The auto company will "own" its reputation and will incentivise auto-drivers to be more courteous. Competitive pressure will drive them to devise fare systems that are more beneficial to both themselves and the consumer. They will keep their own costs down by using technologies such as radio and phones to capitalize on their economies of scale.

@Ajit: I am not trying to compare the carbon footp...

2010-08-17T14:19:17.855+08:00

@Ajit: I am not trying to compare the carbon footprint of Autos w.r.t Buses/Trains, but rather pointing out that every mode of transportation has inefficiencies.

(Actually I have more to say on inefficiencies of buses as well. I was in Copenhagen in early 2009 where I could see buses run totally empty for many hours because unless they provide that level of service, people won't dump their cars and once you get it to that level & frequency, running empty becomes inevitable. So, population density has a significant role there, but in case of India or for that matter Singapore, it can be safely ignored for the purpose of this argument, since population density is fairly high.)

If comparison is needed, compare them to Cars. Do you know that there are enough cases where cars travel around empty to "pick up" others? (It is only in India where Yahoo used to send a "pick up" all the way from the city to BIAL to pick up employees, whereas everywhere else they are expected to take a cab and go to their destination. These cabs in turn would never come to Airport empty - they will bring along on going passengers. I have hardly seen a cab driving empty into Changi Airport.)

If a good Auto system exists (one which doesn't have auto stands and is hence more available and consistently priced for the passengers and hence supplanting needs of cars), then "picking up" would go down and the Autos/Cabs leave a lower footprint per km of passenger service served. I understand that more math is needed, but I don't think we can brush aside the concept just in the name of carbon footprint.

I hope you understand what I am getting at.

@Shrini the comparision between autos with mass t...

2010-08-16T11:51:06.093+08:00

@Shrini

the comparision between autos with mass transit systems like buses and trains is completely flawed because the average carbon foot print per passenger is so low with a mass transit system compared to an auto rickshaw. Let us just not compare them. Besides buses and trains frequency and servicing can be controlled to account for non-peak hours by running lesser number of them with lesser frequency. This is something impractical in case of autos running on roads all the time with no stops for them and they are definitely increasing the carbon footprint of the city, the only question is how significant its going to be. Perhaps doing some math on this would help us gauge it better. If its not going to be significant then there shouldn't be a problem. I agree that we would see some people switching to using autos as opposed to booking cabs if finding an auto is going to be easy.

I must say this post and the related comments are ...

2010-08-15T00:29:28.670+08:00

I must say this post and the related comments are representative of everything I love about blogging!

Ajit: The problem with energy efficiency shall rem...

2010-08-14T20:38:45.121+08:00

Ajit: The problem with energy efficiency shall remain with or without my proposal; with or without Autos. If Autos ply more, the expected effect is that they will pick more passengers, in turn potentially reducing the footprint of other vehicles like a car - which I believe are more polluting, but I could be wrong.

Wouldn't a more effective Auto system reduce the cases where a car travels a distance just to "pick up"?

Do you also worry about trains/buses running empty during early mornings or late nights? Because wastage will always be there, in any form - autos/trains/buses. Just because Autos drive for a few KMs empty doesn't make it any worse than a bus traveling with say < 10 passengers.

Behind however efficient a transport system lies some amount of inefficiencies and energy inefficiency is one of them.

Deppe: I agree with you in principle that it is no...

2010-08-14T20:32:53.690+08:00

Deppe: I agree with you in principle that it is not about "us" vs "them" and again I have nothing about the pay scales rising across the board - in fact I am all for it. I am just saying that the vast majority of the Auto drivers just don't fall into it.

I have never seen the same issue arise for other service providers in my life - I have given raises to the maids at my house, as well as to the ironing staff and I was the one who argued for an increase in the wages for the security staff in my building.

And, as you may have guessed by now, I am strongly against the way Autos drivers behave. Let there be a plan where the fares are increased every single year at the rate of inflation and I have no problems with it if the Auto drivers, in general, act a little more service oriented.

But that's just my theory. Peace from my side too. :-)

(ps: I am glad I touched a nerve with this post. I am receiving responses, both supportive and critical and I am glad I sparked a nano-debate. :-)

Keeping aside the other arguments, one thing I do ...

2010-08-13T23:16:44.897+08:00

Keeping aside the other arguments, one thing I do agree with Deppe is that there are tonnes of *pampered folks* who just refuse to see the other side of the story and would often get their arguments against a section of society with very limited exposure to their reality.

However, I have myself been bitten by Auto guys in Bangalore and I do feel that they behave very obnoxiously. This is a very natural outcome of passengers having no effective control over the situation. I also agree that in the end auto drivers are hurting themselves only as they could earn more by just following rules and not saying no to passengers.

The idea of letting the autos run around and not having a stop is energy in-efficient. This is the only problem I see with this solution. These autos are going to be running around empty quite a bit during the non-peak hours.

Since you bring in the idea of capitalism vs. Soci...

2010-08-13T15:44:18.277+08:00

Since you bring in the idea of capitalism vs. Socialism, I propose that we apply the laissez faire attitude to auto drivers too. Let the government not fix any rate. Get rid of the meter too. Let the market decide how much it can pay ;).

Of course, I'm simplifying here. You are quoting the example of a few people who made enough money to buy out their autos. But if we are picking isolated anecdotal evidence to prove, I know of an autodriver who stays near my house (who used to play cricket with us when we were all kids), who has to work as a security guard at night to ensure that his kids go to school.

Also, abruptly changing the topic, there are several countries in the world that ensure minimum wages without falling into poverty. But, my point wasn't economic at all. I'm going to step aside from that completely.

What I was talking about was the dehumanizing of a complete section of society and making this "Them" vs. "Us" smacks of pettiness to me. I'm talking about the scores of pampered folks who even refuse to begin acknowledging the other side of the story.

What I'm talking about is how we treat our maids and our auto drivers. I'm sure that's not how we treat a taxi driver in Singapore or in England. Granted some of them are very very arrogant, but shouldn't we, blessed with more education, step out of that cycle of reciprocal douchebaggery?

Peace :)

Deppe: Good for you to bring along your thoughts o...

2010-08-13T06:40:39.194+08:00

Deppe: Good for you to bring along your thoughts on this. These are my counter thoughts on the same:

Firstly, the society in question is demonized not because Autos are per say costly, but because the Auto drivers act in a haphazard manner. If the Autos are in their rights to go to the Government and demand an increase in fares and they get it, shouldn't it also be there responsibility to ply on the agreed fares? In all the fare increases I have seen, not even once were the Auto drivers easier to deal with even one day after a fare increase. So, the society has every right to protest against their behaviour.

Secondly, the consensus I have been gathering on Auto drivers is something between 750-900. I have heard people make as much as Saurabh says, and also people making lower numbers like 200, but the general consensus is definitely higher. I have known of Auto drivers who have graduated from drivers to owners to multiple-auto-owners. So, no doubt, the profession is a little more lucrative than you make it out to be.

Thirdly, Singapore cab fares are very much comparable. S'pore cab drivers make about $100 a day in spite the fares being very cheap and costs being high. The average km fare ranges from $0.60-$0.70 which makes it something like Rs. 20-23 a km, which is about more than that of a Meru cab (Rs. 15). On the other hand, the daily lease is about $102, which is significantly higher than Rs. 900 paid by Meru drivers. The petrol prices are the same. Distances in Singapore tend to be shorter on an average because commuters often get to the shortest MRT station and take a train from there on. They are, by law, not allowed to stand as well, so they have to keep plying increasing their costs. All arguments made w.r.t Meru cabs stand consistent for Autos as well, since their costs and fares are proportional to Meru cabs. Yet, as you pointed out, they seem to be making $100 a day, which is very healthy by local standards. Why? The reason is they pick up a lot more passengers. And why do they do that in spite of Singapore having such good buses and train services? Because passengers know that they can easily flag down a cab and be treated fairly and consistently every single time.

Fourthly, there is no hypocrisy here in meter jam - it is capitalism in play. If you want every service provider (maids/cab drivers/retail salesforce) etc to make as much as the people they serve, then we are looking to become a socialist country and that is the surest way to further poverty.

Further thoughts?

@Shreeni: Idea is nice ! But impractical in Indian...

2010-08-13T02:13:13.695+08:00

@Shreeni: Idea is nice ! But impractical in Indian scenario. You need to have a much more 'mature' traffic system to have what you suggested, unlike India, where if you are driving/walking, you need to look in all 4 directions before you move :)

@Deppe: 200 Rs per day ! You'll be surprised ..The auto-wallas start from anywhere between 1.5-2 times the fare for slightly longer distances. If you do manage to negotiate, you'll still end up paying 20 -30 bucks extra than the normal fare. Why? Because, there is no U turn near the place where you stop.

I agree with the spontaneous unionization/groupthi...

2010-08-13T01:12:47.456+08:00

I agree with the spontaneous unionization/groupthink that happens at Auto stands. However, I still think that for civilized society to boycott and demonize a member of society that earns Rs.200 per day (usually less than that) is a little petty. I wish we'd take our time to come up with a better solution. I admit I don't have one, because I hardly ever use the auto, but those who depend on it should try to come up with something more mature than treating them like vermin.

Comparing them to cab drivers in Singapore is a little unfair, because the tariffs are hardly comparable. It could be argued that if the auto drivers in Bangalore earned anywhere close to taxi drivers in developed countries, they'd be less insolent. In any case I detect a certain hypocrisy in our attitude (and the disturbing degree of support to Meter Jam); we want for ourselves a first world experience in our day to day lives, but we are unwilling to grant that same thing to other sections of the society. We want our autodrivers cheap and our maids servile, don't we?