There is a huge government-sponsored racket that is going on under our very noses – and that is the licensing of auto-rickshaws.
The other day, I made some inquiries into the price of an auto and it turned out that a beat up old machine sells at over Rs. 2,50,000. I am not being offered more than Rs. 80,000 for my 2001 Opel Corsa, which is in immaculate condition. And 3 old Opels for 1 old auto-rickshaw is no deal.
It also turns out that the price of a new auto-rickshaw is in excess of Rs. 4,00,000. This, while the Suzuki A-Star has just been launched at Rs. 3,50,000 for the base model. The A-Star looks great. The auto, even new, looks like junk. And junk should be junked.
My rickshaw-driver friends told me that Bajaj gets about Rs. 1,50,000 per auto, while the rest of the money is a premium for the license to operate the vehicle. These licenses are scarce. The issuing authority is the the Regional Transport Office (RTO).
Now, driving a car is difficult in Delhi because of the proliferation of autos. They slow down all other traffic. If they were banned, traffic management would be easier. Scientific traffic management is impossible today because of the different speeds at which different vehicles move, the auto-rickshaw being the slowest.
There are a host of small cars already available from Suzuki and Hyundai that could replace auto-rickshaws while also smoothening out the traffic flow. The customer would get a better ride. And the driver would save his backbone. An orthopaedist once told me that spinal injuries are commonplace amongst auto-rickshaw drivers.
The auto-rickshaws on our roads symbolize our poverty – that the people cannot afford cars. This is totally false. Fleets of small cars to be run as taxis would be invested in by individuals as well as taxi companies if the transport authorities that license commercial vehicles were all unceremoniously closed down.
There is already a major illegal business going on in Delhi by which unlicensed big cars (like the Toyota Qualis or the Chevrolet Tavera) ply as taxis, cramming a dozen or so passengers at a small fee each, competing with buses. In a free market scenario, there would be all kinds of vehicles on offer, from small to big, and it is the customer who would be king, free to choose.
So ban the Bajaj auto-rickshaw.
And shut down all the RTOs.
I totally agree with you on the point, but be careful on the 'ban' word you used. I am sure what u meant was to eliminate the 'extra legal privilege' offered to Auto.
ReplyDeleteI guess there are lots of factors to look into before we can move into this idea.
ReplyDeleteFirst of all, the high taxes levied on foreign cars, all the control imposed by the State have to go. Only then will the auto problem erode away in a truly free-market scenario.
Sauvik, I am really surprised that a libertarian would be in favour of "banning" anything. Absolutely abolish the RTO, licensing, and all the premium created in rickshaw sales for Bajaj. But otherwise, whether people choose to buy rickshaws or Opels is really none of the government's business.
ReplyDeleteConcur with bhuva. The auto-rickshaw driver and Bajaj Auto are free to trade with each other. Why should there be a ban on their business?
ReplyDeleteA private road owner would only allow road-worthy vehicles onto his road. Slow vehicles slow down traffic - and his profits are lowered.
ReplyDeleteBut we don't have private roads.
So the State, as owner of all roads, must also allow only certain categories of vehicles onto busy roads.
Yes, the auto-rickshaw owner and Bajaj can freely trade with each other. But there is a "negative externality" here as the autorickshaw transfers the costs of its inefficiency onto others - by slowing them down. They should therefore be banned as unroadworthy.
In Germany, for example, the autobahns are off limits to scooters and low power motorcycles - and, of course, three-wheelers.
Note that the road is the scarce resource here.
So roads must be efficiently used.
Why don't we have competitors to Bajaj? Charging 1.5 Lakh for an auto is cheating.
ReplyDeleteSauvik, true, but partly. We cannot argue on both sides, saying the state is the owner but we don't like state ownership. That argument then applies to everything under state "ownership". For example cigarette smoking (vis a vis state air). It seems to me that we are arguing on a convenience ticket here - we don't like rickshaws (and rightly so), go ahead and ban them. However, for our social debate here, the problem is not rickshaws per se, but that we have the worst quality of rickshaws due to Bajaj and government collusion, and licensing. Perhaps if the market was freed for rickshaw manufacturers and operators alike, the poor guys could go ahead and buy cheaper more efficient less noisy less poluting faster 3-wheelers. I am very much against banning by the state, private owners can do as they like, but not the state since it claims to speak for everyone.
ReplyDeleteBhuva (na?) : What about cycle rickshaws? They are cheap and non-polluting as well. Are they not banned on all major thoroughfares? What would happen to our roads if cycle rickshaws roamed free?
ReplyDeleteI don't think this argument is based on "convenience" per se. It just sounds like that probably because I have worded it in an authoritarian style. Typical of me :-)
But note that in a totally free market, including duty-free used car imports, autorickshaws would be outcompeted. People would invest in "real" assets, not junk. They would own real cars. And commuters would enjoy real taxi services - like they used to in the 60s - before the autorickshaw was invented and given free rein. You were probably not born then, but I have vivid memories of those times too.
Indeed, Calcutta and Bombay had only taxis then. It was Delhi that had the autorickshaw in the early 70s.
Yes, bhuva(na), the ghost of xmas past! Good posts :)
ReplyDelete