of autorickshaws, millionaires and freakonomics – Part 2

Carrying on with the question Dubner asked on Freakonomics last week.

I’m going to take a rather different view to Abhishek Rawat. In essence, Abhishek states that the differences between autod drivers in Mumbai and Delhi are down to the greater numbers of autos and thus greater competition for fares in Mumbai. While this is true to some extent, I don’t think its the key reason for the differences between the 2 cities.

I currently live in Mumbai, grew up in Bangalore and have visited Delhi several times. Bangalore was a good case study since about 15 years ago, Bangalore’s autos were very similar in nature to Mumbai’s autos today. They were friendly, safe cooperative and went strictly by the meter. Now they are probably as bad if not worse than Delhi’s. Today it is near impossible to get an auto (or ‘ric as we refer to them) to a) go where you want to and b) go by the meter.

If I were to compare Bangalore today with Bangalore of 1990, the major difference is population and accompanying traffic. It is just a lot harder to get around by road in Bangalore than it used to be.

Anyway, enough rambling on Bangalore. The reason for the difference between Mumbai and Delhi’s ‘rics today and Bangalore’s ‘rics over time is this:

1. Competition among autos: As Abhishek said, Mumbai has the highest density of autos in an equivalent area of all three cities. Walk to any intersection and there are between 5 and 10 ‘rics, atleast, competing for you to ride with them.

2. Alternatives: I think Abhishek has got this point reversed. In Mumbai, modes of Public transport are:

a. taxi – the Central Business District to the northern suburbs and further on, essentially the entire city

b. auto – only the suburbs, about half the city. After specific points, autos can’t go south into the city.

c. local trains – the most heavily used option which connects the entire city together and very much the one thing that keeps Mumbai going.

d. local bus: a massive network that goes everywhere and integrates with inter-city bus lines.

All these alternatives have been around for decades. In Delhi, there are buses and now a metro, both of which are, compared to Mumbai, more recent options. Bangalore has no viable alternative to autos today.

So the result of that is a person is much more dependent on autos in Delhi and especially Bangalore than in Mumbai. If an auto driver were to ‘put up their price’ in Mumbai, commuters would just walk by and use something else, like the bus or train. Also, road transport, due to traffic jams is not as fast or as reliably on time as the trains in Mumbai. So these competitors have inequalities other than price.

3. City culture: Culturally, Mumbai is like New York. Delhi is like Washington DC. Bangalore is like a cross between a Florida beach and silicon valley. People are a lot less tolerant of time-wasting-haggling in Mumbai and will show their displeasure.

4. Economic demographics: This, I think is an important point and one which is bound to be quite controversial. Mumbai is a lot, lot more crowded than Delhi and Bangalore. People from the corporatized (and equivalent) middle / upper-middle class (in terms of buying power) form a far larger section of the population in Delhi and Bangalore than they do in Mumbai. So the market for autos in Delhi and Bangalore is a lot more tolerant of paying 10-20% over and above the meter.

So there you have it, as an auto driver in Mumbai, you are facing a potential customer who is financially and culturally much more reluctant to bargain than in other cities, competing with alternatives which on a speed aspect are superior, are limited geographically and you also have a lot more ‘colleagues’ driving their own autos around looking for a fare.

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