Searchlight South Asia: The Auto Rickshaw Diaries

Tired of hearing auto-rickshaw nightmare stories? There’s more to them than what meets the eye.


Tired of hearing auto-rickshaw nightmare stories? There’s more to them than what meets the eye.

The three-wheeled motorized vehicles, popularly known as auto rickshaws, are a backbone to urban mobility. Commuters in urban India are served by about 5 million auto rickshaw drivers who move through traffic-tangled streets all day for a living. The drivers work for over 10-12 hours per day and form part of the urban informal sector in India. They are generally self-employed and lack employment benefits such as health insurance and social security. Income insecurity is a significant concern for the drivers – they earn on a daily basis leading to no fixed income. While over 20 million lives are dependent on the drivers’ income; their earnings could be as low as US$ 3 per day. Health expenses are a big challenge for most auto rickshaw drivers. They suffer from serious respiratory health threats as they are constantly exposed to vehicular pollution. The drivers are also prone to road accidents given poor road infrastructure and badly maintained vehicles. On the road for most of their day, they suffer due to the poor quality and availability of hygienic water and sanitation facilities in the country, leading to further health issues.

Auto Diaries

Auto rickshaw drivers incur high costs to ply their trade. A study in Delhi suggests that about 80% of auto rickshaw drivers rent their vehicles and roughly half of their daily revenue covers the rental fees.  Their other large expense is that of gas for the auto rickshaw. Their daily wage depends on the number of customers and the distances travelled. However, they face a daily battle of optimizing their trips and avoiding empty returns, when they have to drive long distances without passengers. The drivers, sometimes also face trouble with the police authorities which leads to a cycle of bribery.

Faced with increasing costs, auto rickshaw drivers find the preset fare meters a pain point. The fares of auto rickshaws are fixed by a meter system decided by the State Transport Authority. Negotiating fares is a common practice in most cities, despite the fixed fare charts. Passengers face a constant hassle of bargaining prices with the drivers. For the drivers, the fixed fare does not suffice or meet their needs. This has led to several auto strikes for higher base rates backed by strong auto unions. Therefore, regardless of the demand and customer base for auto rickshaws in the country, the auto rickshaw driver lives a rather strenuous life of urban poverty and marginalization.

Better the Auto Rickshaw Experience: Dial a Rickshaw

In light of the issues faced by passengers and auto rickshaw drivers, interventions that addresses the concerns and demand of the various stakeholders is imperative. One such intervention that has gained momentum, is the Dial-a-Rickshaw service started by young entrepreneurs in some cities across India. The Dial-a-Rickshaw business essentially allows for people to book an auto rickshaw via phone or internet and in the process addresses the strong dissatisfaction amongst both the stakeholders involved. These enterprises have not only provided the “hassle free auto rickshaw experience” to commuters but have simultaneously empowered the auto rickshaw drivers for a better income and living.

Making a Difference

Nirmal Kumar started G-Auto initiative with three objectives – to provide “Suraksha, Samridhi and Samman” (Security, Prosperity and Dignity) to auto drivers. G-Auto runs an Any Time Rickshaw service with a mission of empowering auto rickshaw drivers as well as proving customer satisfaction. The initiative runs across most cities in Gujarat and is set to launch in Delhi as well. Any Time Rickshaw service allows for passengers to book an auto rickshaw on the basic metered fare with a service charge of INR 15 (US$ 0.25) per booking. The ATR model reduces the nuisance of negotiating fare prices between commuters and auto rickshaw drivers. In its first year of operation, G-Auto earned a revenue of INR 17.5 million (US$ 285481.24) with a net profit of INR 2 million (US$ 32626.43). The organization also earns sizeable revenue through advertising in G-Auto vehicles.  With this model, the initiative organizes Auto Rickshaw drivers under one umbrella and improves their living conditions. “G-Auto provides prosperity and security to auto rickshaw drivers with regular income generating rides through the ATR service and also protecting them from the cycle of bribery by taking up any issues with the police to the highest level of authority. By organizing the drivers, also known as G-Pilots under the initiatives, we are also enabling them to live a life of dignity and respect, while providing them with income and job satisfaction”, suggests Kumar. Currently G-Auto has 10,000 auto rickshaw drivers from different cities in Gujarat.

Social Ventures to the Rescue: Auto Wale

Entrepreneurs cum Engineers, Mukesh Jha and Janardan Prasad were at the receiving end of long and taxing negotiations with auto rickshaw drivers along with hiring an auto rickshaw in certain areas of Pune, in Maharashtra. As citizens who relied extensively on auto rickshaws for commute, they set up Auto Wale, an enterprise that improved the experience for customers. The idea was to improve the already existing options of commuting as compared to building new infrastructure. In-depth surveys in Pune suggested that “most customers had complaints about the auto fares and the constant hassle with auto rickshaw drivers, whereas on the other hand auto-rickshaw drivers were unhappy about unstable earnings and not finding enough customers in a say”, says Prasad. Some persistent problems of auto rickshaw drivers included “unpredictable revenue, empty returns and competition from cab/taxi companies.” Additionally, many drivers seemed to have some form of debt to repay, worsening their financial condition. Auto Wale’s Dial-a-Rickshaw strategy was ideated to use technology, IT systems and communications in the best way to reduce the plight of both parties.

Auto Wale uses two approaches for its dial-a-rickshaw model. The first one incorporates buying miles in bulk from auto rickshaw drivers on a monthly basis. As and when customer requests come in, auto rickshaws depending on their location are assigned to the customers. In this approach, the drivers are paid on a monthly basis, customers get to use the auto rickshaws on metered fare prices with a conveyance charge of INR 20 (US$ 0.33) and time is optimized as the network of auto rickshaws is already established. The registration process is simple as long as all the compliance documents are met by the drivers. Auto Wale also helps in opening bank accounts, where the monthly payments are deposited. In the other approach, generally used during surplus demand, auto rickshaws drivers who want daily earning and more freedom in terms of commute, use a prepaid balance method where an advance is paid for a particular number of trips (for example, INR 1000 (US$ 16.31) for 50 trips). Auto Wale helps these drivers by giving them leads to customers.

Auto Wale is focused on increasing the earning potential of the auto rickshaw drivers. “The gross income of the drives has increased by twice and the earning potential by almost 100%”, says Prasad. The strategy is simple, to reduce as many empty returns as possible. To that end, Auto Wale has put technology to its best use. They use algorithms to predict future locations of customers and connect the drivers’ accordingly. The driver is generally informed of 2-3 simultaneous trips reducing, drastically, the wait for customers. “This method has reduced empty running by almost 25%”, suggests Prasad. Auto Wale works in Pune and has validated the model in Bangalore, where it should launch soon. There are about 400 auto rickshaws registered with a customer base of more 10000 commuters.  “We are running a business to make it profitable, where all three aspects – the customers, the drivers and the company is satisfied”, says Prasad.

Scaling Dial-a- Rickshaw models: Challenges and the Future

Ay Auto is another enterprise based out of Pune that tried its stint with the Dial-a-Rickshaw model. The approach used was to be an on call service for auto rickshaws. They put together a network of drivers and marketed to customers about the service. The challenge that Ay Auto faced was more to do with bringing about changes in the behavior and mindset of auto rickshaw drivers. “We were unable to change the mindset on one big aspect, we couldn’t get them to move from what was a daily struggle to a monthly living; we couldn’t get them to pay in advance for a benefit that Ay Auto would give. That made it very unsustainable as post-paid collections are nearly impossible”, suggests Gopi Aravind, co-founder, Ay Auto. The firm eventually exited and sold its operations to Auto Wale.

“Awareness levels of the customers and the drivers are continuing challenges with Dial-a -Rickshaw models”, suggest Kumar and Prasad. The initial implementation itself is tedious, as the enterprises have to ensure that the communication of the concept is put across well to the auto rickshaw unions and authorities to put together a network of auto rickshaws. “One of the larger challenges faced by these models is the unequal demand and supply of auto rickshaw versus the customer requests”, says Prasad. Demand in unpredictable with good and bad days. However, as the business scales and awareness increases, “there could be a more uniform distribution solving the demand supply conundrum.”  For Dial-a-Rickshaw to scale across India, accessing funds for daily operations is critical. “With more players in the market, the scope for validation and expansion increases”, says Prasad. In the future, apart from scaling the business, empowering this section of the urban poor through overall community development, increased incomes and health security via insurance are on the cards for Auto Wale.

Conclusion

Along with increasing the earning potential, these models have the potential to improve their overall living conditions and have a work-life balance. While the auto rickshaws drivers are self-employed, the idea behind Dial-a-Rickshaw model is “not to kill the entrepreneur in them”, but to help them nurture the spirit and improve their lives. “A Dial-a-Rickshaw model where all stakeholders (drivers, customers, unions, government and the company) benefit, is a sustainable one; hopefully we’ll get there soon”, says Aravind. Dial-a-Rickshaw model presents a sustainable solution to the growing insecurities of auto rickshaw drivers while addressing the customer’s plight and in long term, solve the commute issues in urban areas.

 

By Noopur Desai

Sources:

http://articles.timesofindia.indiatimes.com/2013-03-18/nagpur/37813592_1_autorickshaw-driver-auto-drivers-g-auto

http://thecityfix.com/blog/socially-responsible-business-for-indias-auto-rickshaws/

http://www.thehindu.com/news/cities/Delhi/dial-an-autorickshaw-service-coming-to-delhi/article4417948.ece

http://workerscentre.wordpress.com/2013/07/16/informal-sector-map-of-india/

http://yourstory.in/2012/02/enough-haggling-with-auto-wallahs-dial-ayauto/

http://www.thehindu.com/sci-tech/energy-and-environment/three-wheels-and-a-new-paradigm/article3987982.ece


  ABOUT THE AUTHOR
Intellecap’s Searchlight research and analysis tracks urban poverty trends in Bangladesh, India, Nepal and Pakistan. It covers a range of development issues like education, healthcare and financial inclusion. more

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  ABOUT THE AUTHOR
Intellecap’s Searchlight research and analysis tracks urban poverty trends in Bangladesh, India, Nepal and Pakistan. It covers a range of development issues like education, healthcare and financial inclusion. more

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