The Economics of Chennai Autos - Part 1
I was reading Guru’s post here on autos and had a few things to say. It eventually turned out longer than his post, so thought I’d rather post it in my blog.
While I completely agree with Guru on fleecing by Chennai auto drivers, I do think there is another side to it. This is not to say I justify the pagal kollai most of the auto drivers resort to. What I am trying to suggest is that, there should be more thought put into the problem.
The following are some info I collected during my chit-chats with auto drivers every now and then. I’ve checked this info for consistency. Either they are true or all the auto drivers I talked to are pretty consistent in their lies. I hope it’s the former.
Petrol rates per litre is Rs.54 (including oil)
Autos, on an average, give a mileage of 20 km/litre. so, per km, his fuel charges alone would be about 2.50-3.00 Rs.
From Velachery to Teynampet, i usually pay 70 bucks for 10 km ride whenever I take an auto. Which works to 7 Rs. per km. Here, the fuel component alone works out to 25-30 Rs approximately. Add the drivers labour and the fixed overhead component(daily rent of 120-150 rupees per auto)
There is no limits/restrictions on the number of autos plying in Chennai. So it’s not realistic to expect autos to be occupied all day. I dont even think the RTO have an exact measure of the number of autos plying.
Coming to think of it, its more like a vicious cycle. People don’t take autos because it’s not viable and auto drivers don’t bring down rates because they think they can’t afford if they ply for low rates. Greed pays a part too. The average auto driver thinks he has to make the minimum target amount as soon as possible which is stupid. The fact that most of the fellows are uneducated does not help in seeing the better picture (that theirs is a dying breed).
Guru also mentions that a share auto driver runs from Triplicane to Thiruvanmiyur for 10 bucks per person. That maybe true, but I don’t think the share auto runs with 5 people. Usually there are more. And also it’s not like the share auto runs the entire distance with the same set of 5 people. People get down and get in at various stops.
So the capacity maybe 5(even assuming he is right), but the share auto would’ve had 10-15 passengers by the time he covers the distance. Add to it, most of the share autos runs in diesel.
So how come Kerala is able to run autos so cheap and so well?
The cost of living in a Kerala city is much lesser than Chennai.
I think this whole concept of policemen/MLAs/Dadas owning autos and making 150 rs per day is just insane. I don’t think this culture exists in Kerala.
Malluland has something called dignity of labour (sometimes excessively so in other spheres of life, but it helps in keeping their autos in the good books of the public)
Due to their efficient service, there is good patronage too which is not the case in Chennai/Coimbatore/Madurai. The lack of patronage makes the auto driver to fleece whoever comes his way which antagonizes the layman even more and he vows to avoid autos.
Maybe, just maybe, auto drivers in Kerala are more educated and consequently aware of the importance of making a good turnover with cheap fare than Chennai auto drivers.
An auto driver in chennai typically makes 500-600 per day as revenue and his net income per day would be about 250 Rs. (600 minus 200 for petrol and 150 for daily rent, not to mention mamool if and when that happens). Ofcourse this is not guranteed everyday. He may make more. He may make less.
Let’s face it. Auto drivers in Chennai are not MBAs who would analyse why demand is falling with each passing day.
So whats the way out?
More on that tomorrow.
September 18th, 2006 at 5:26 am
PK,
Tell me how these things don’t happen in Bombay/Banglore? ( I don’t know much these days - but used to be that way….) If your readers agree that Bangalore/Bombay autos don’t fleece…and the cost of Petrol is almost the same…why are Chennai auto guys notorious for this?
Way out of this - Fuel efficient autos!
September 18th, 2006 at 9:19 am
NV sir,
bombay is definitely good. bangalore to some extent. certainly not as bad as chennai.
As i said, there are other factors inherent to chennai like goonda’s buying autos and letting it for rent.
so in essence, its not a deal between the auto driver and passenger alone.
i think this sitn is unique to chennai.
fuel efficient autos, absolutely i think its time to retire these gas guzzlers.
September 18th, 2006 at 6:37 pm
In Bangalore, autos dont run on petrol……
they run on LPG which costs abt 28 Rs per litre or something………
S
September 18th, 2006 at 7:23 pm
PK,
Most of us wont make a fuss when we know they are asking a genuine fare. the probs comes when they make false claims it irritates us
example 1 - one auto guy agreed for some amount. he came near the apartment gate. when asked to drop inside he asked for additional amount. its a very small apartment complex not a one sprawling acres.
example 2 - he was waiting at the adyar signal i asked him to drop me at adyar ananda bhavan he told some weird reason and dropped me elsewere
when we take auto we always end up feeling cheated thats why people get so irritated.
i’d cancel the program rather than taking an auto
have heard good reports abt bombay and bangalore autos
September 18th, 2006 at 11:47 pm
Corollary to the theorem: A devil’s advocate approach to the problem
54 Rs per litre and 20 km per litre are both taken to be right. 70 Rs for 10 km seems to be a little less than average, but since you live in Chennai and I don’t, let me take that to be true as well. About 2.7 Rs/Km is being spent on petrol. I’d allocate 1 Rs per km to be spent on everything else including overhead, repairs, mamool and so on. With the amount of km driven on a daily basis, the 1 Rs should be cover that pretty easily. That gives us a good 3.3 Rs/Km going straight to the driver (of which the daily rent for the auto will be paid from). If a driver works an average of 10 hrs a day and 25 days a month, and he drives an average of 200 km a day — he’d be earning 660 Rs a day, of which about 150 can be spent on the daily rent. If he makes in excess of 500 Rs a day for 25 days a month, he should be earning about 12.5 k per month. Isn’t that a reasonable sum for a job that does not require much skill (at least time and effort wise prior to joining the job) ?
I like these economics issues as well. I make these mental calculations all the time.
September 19th, 2006 at 6:20 am
S,
i am not sure abt bangalore autos running on petrol or LPG..
maybe some bangalore vasi ,might pitch in..
September 19th, 2006 at 6:22 am
dany,
i agree with u. as i said clearly, i am not here to justify auto drivers..
but i think the ecosystem per se needs to change.
i would include the middlemen making money, the mamools, the RTO office people etc.
September 19th, 2006 at 6:47 am
dinesh,
70 for 10 km unmai dhaan ba, enna nambu
sometimes i’ve taken auto from central to velachery for 120-130 bucks. its no less than 15 kms i assure u
but this is not to suggest u can get an auto for 15 bucks for a 2 km distance, no way!!!
Coming to your calculations, i’m not sure about yr 200km a day assumption..
The price they charge makes it all the more difficult to have 100% utilisation.
If they run, say 160 km (at the max) a day with passenger occupancy of 75%, they would still need to shell out fuel for 40km from their pockets. so they lose abt 100 bucks there alone.
From whatever little i’ve spoken to these guys, they should be making around 6000 on an average.
Which brings us to another point.
will it not be appropriate if some economics student runs a research on the unique undesirable phenomenon called chennai autos?:)
unakku indha madhiri economic calculations laam pidikum na try Freakonomics, u’ll love it:)
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September 19th, 2006 at 3:53 pm
PK
It is systemic failure on several fronts 1)Official rates have not been revised for several years..while the the price of gas has gone up.. 2)Customer don’t trust the meters.. because of the ’soodu’ phenomenon 3)City doesn’t care to enforce laws.. So 4)Auto drivers go wild..
Besides all of the above.. Chennai Auto drivers ‘thrive’ in abusing their clients..
I wish 1) Govt revised the fares ‘fairly’ 2)Auto meters are not ‘tampered’ with 3)Customers can just engage Autos by the meter and don’t have to haggle.. 4)Proper enforcement of all this.. by the Govt..
September 19th, 2006 at 11:07 pm
PK neenga sonnatha alasi aaranju oru comment potta meter ku mela pottu tharuveengala
September 20th, 2006 at 1:31 pm
Ugh PK,
That was a bangalore vasi, trying to share some info….
S…
September 20th, 2006 at 1:58 pm
Ram,
because of problems in 4
1, 2 and 3 would fall flat IMHO
September 20th, 2006 at 1:58 pm
syam,
prasavam madhiri freeyave polaam
:p
September 20th, 2006 at 1:59 pm
anon,
ooh! sorry ba!
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