Market design for auto fares?

It’s perhaps unfortunate that two of my consecutive posts deal with autorickshaws and their drivers, and well, Outlook. But here goes anyway.

We, here at Chennai Metblogs, have obsessively discussed how auto drivers rob passengers. Friend Sriram Srinivasan of Outlook Business discusses in a recent blog post how market design can be used to decide auto fares.

We are all familiar with the answer Sriram doesn’t come up with in the end, but the blog is definitely worth a dekko.

8 Comments so far

  1. ok (unregistered) on November 17th, 2007 @ 2:57 am

    How do auto drivers rob anyone? If you don’t want to pay their fare you don’t have to. Does anyone who asks a price higher than you want to pay “rob” you?

  2. suppamani (unregistered) on November 17th, 2007 @ 8:53 am

    I dont know why there is a hue and cry always about this auto fare only. It is his auto and it is his business and I feel he should have his libety to fix the fare. To say a cofee cost Rs.6 or 7 in Sangeetha, Rs.11 in Saravana, Rs.20 in woodlands, Rs. 40 to 60 in star hotels. If you want and desire at your choice you can have your cofee. For this there is no debate and orguments. But with regard to autofare only the words like robbing etc being used. Any one is feeling about the other prices fixed by the relevant sellers. I neve heard of.- suppamani.

  3. Venkat (unregistered) on November 17th, 2007 @ 10:52 am

    Auto’s and all other public transportation use public roads and get a license to operate within guidelines set by govt. If they don’t want to ply for Rs 6/KM which is the charge in B’lore, Hyd etc., they should go into some other business. The current fare was negotiated by Auto Unions with the govt and was not arbitariliy imposed.

    Petrol rates are higher in other cities and roads in places like B’lore and Hyd are steep and have more traffic. If meters work in such places, Chennai should not be an exception.

    I wish auto drivers are bound by a code of conduct including what to say, what to wear etc. Right now, only slum rowdies drive them.

  4. Shiva (unregistered) on November 17th, 2007 @ 11:27 am

    It is with the local government to control them, again that will not happen because of obvious reasons. Once when I went to Kerala, I was very surprised when once an auto driver charged us only Rs. 10.50 which would have at least been charged Rs. 40 to 50 by the chennai auto wallas and I could not resist asking the locals about the charging rates and I came to know that the amounts have been pre-fixed between two places within that town and the auto drivers cannot overcharge for anything else. May be that could work here, again I heard that it has already been implemented but still not followed for various reasons. I get anxiety most of the time when I had to catch auto within chennai and have avoided (as said by “ok” here) them and prefer to catch call taxis simply for the reason that you can go peacefully without any arguments. Even the call taxis have started overcharging these days, especially I had a bad experience with Adyar Call Taxi driver once. :-(

  5. tsk tsk (unregistered) on November 17th, 2007 @ 6:50 pm


    With repect to your analogy We do not have a concept of 1 star, 2 ,star and 5 star autos that one can settle for varied pricing. Public transport is a monopolistic business , that needs uniform pricing for a defined service, needs to be efficient, affordable and a viable option to privately owned transportation.

    You will appreciate that in chennai the reason why there are so many two wheelers on the road is that public transport does not meed the requirements of the middle class. This is proved in mumbai, where the sales of two wheelers is not so much thanks to an efficient public transport system.

  6. suppamani (unregistered) on November 18th, 2007 @ 9:25 am

    I could not understand why AUTOS have to be treated as a public transport; It is their own money they have invested as the cost of Auto, for fuel as other vehicle owners are buying and there is no concessional rate for them, like other vehicles they have also to pay the road tax and for other permits and they are not enjoying any concessaion on in any of their cost; If so, why Tourist Taxis are not treated as public transport; the Auto Drivers are also haing their family;for their famly expenses they have also to meet the increase in cost of materials; now we have to pay about Rs.400 to 500 for a mason or for a carpenter; If all these things are taken in consideration, I feel, they are having their rights to fix their charges for using their auto; This would create a good comptition between them and would definitely create a good sense among them and those who charge moderatly and behave good only would survive and flourish.

  7. tsk tsk (unregistered) on November 20th, 2007 @ 6:42 pm


    Patronage for autos will expreince a significant increase if they go in for metered fare, as people will subsitute buying two wheelers with using public rickshaws. Bombay autowallahs do really well for them selves.

    Some points based on your comments

    1. Your idea would work wonders if there was no cap on the number of autos that could ply in the city. However in chennai there are caps. I think there is an upper limit of 35000 autos. So there is no chance of a free market pricing.
    2. Auto rickshaw business will never experiencing free pricing but infact it is a cartelised market controlled by unions, which you maybe experiencing the effects of.
    3. autos run at a cost of less that 2 rs a km where as they are entitled to charge close to 5 ruppees a km. Tourist cabs on the other hand run at a cost of 6-7 rupees a KM and charge 8-9 a Km. The returns are in favor of the rickshaw.
    4. You do not find public taxis in chennai, obviously because there is a lack of patronage. Besides there is the concept of call taxis, so i think you concept of allowing tourist cabs to ply as taxis is already factored into the market.
    5. Lets not compare carpenters with auto drivers. There is no skill to auto driving, as displayed by most drivers :P

  8. Dilip Muralidaran (unregistered) on November 21st, 2007 @ 12:36 pm

    “There is no skill to auto driving, as displayed by most drivers :P”

    I love that statement, if i count the number of times my scooter had been bruised by auto drivers in a stop line where they tend to always go one step ahead of the line by scrapping the paint off our vehicles….

    that data would fit a huge oracle database probably the size of the indian voters list.

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