I was in Hyderabad sometime back for a business trip and saw a new mode of transport… Shared Autos.
Autorickshaws (see pic above) are a great mode of transport in most parts of India. You don’t see too many taxis on the road unless you are in Mumbai. Anyway, Autos (as they are called) can be hired and it can take a maximum of 3 people (though they may squeeze in 4 or more). Autos in Bangalore and Chennai are famous for charging exorbitant fares too…
But I saw something in Hyderabad, which was unique, from a business perspective and questionable in terms of safety and ethics. The concept is called a “Shared Auto”. The deal is simple:
- A passenger hires an auto (say from Banjara Hills to CyberCity)
- The auto-driver will ask you if you wish to pay the whole money or agree to a shared-deal
- If you agree to the whole (I have only seen families do this), he will charge you by the meter or a bit more (as is the norm
) - Otherwise, it transforms itself into a Shared-Auto
Shared-Auto
What is a Shared-Auto?
A Shared-Auto runs like a bus, stopping at bus stops and picking and dropping passengers. What you get charged is a bit more than what you might pay if you take a bus.
Let’s see how this works out for the auto guy:
Case 1: Non-Shared-Auto
- Say the meter fare from A to B = Rs.80
- The auto-driver makes anything from Rs.80-100 for such a journey, depending on various factors like time-of-the-day, availability, weather… etc
Case 2: Shared-Auto
- Say the meter fare from A to B = Rs.80
- He picks 2 passengers from A to B for Rs.40 (half the price, when say the bus might charge Rs.10/head)
- He picks up and drops say 10 more passengers charging an average price/passenger of Rs. 10
- The total money he makes = 40 + (10×10) = Rs.140
Running as a shared auto, I as a passenger pay more than what I pay in a bus but still get about a 50% savings on if I had taken a non-shared-auto. The auto-driver earns almost 175% of what he would have earned. Now if you consider that the auto-driver has to pay the auto-owner Rs.50 for the above said travel, he makes almost 3 times of what he would make otherwise (Rs. 90 Vs Rs.30).
Looks like the auto-drivers have figured out the business at BOP as well as or better than the big industries by making their service accessable to people at a lower price, increasing the scope of their target audience. What I had above was a modest calculation. Some auto-guys can take this a bit too far, like in the pic below:
Which brings me to the next topic:
Is it ethical to do business as above? Or another question is, “Is it smart?”
- Over-loading is dangerous… very dangerous
- Over-loading can cause damage to the vehicle which might reduce its life-span, hence reducing its capacity to generate profit
- Even without overloading, it is breaching the law of not having more than 3 people in an auto.
What do you think? Anyway, this system apparently works and it is cheaper for the public, better for the auto guys. But again… Is it ethical and/or smart? Hmm…
April 29, 2009 at 2:47 pm
It’s a great business model to target the BOP though it’s not a relatively new or unique idea.Shared autos have been plying in Chennai since the mid 1990s and many autos have been custome made to accomodate 12-15 passengers at a time!I remember these rides being quite an experience;being packed tightly between people in those boxes taking in the combined smell of body odour,jasmine and talcum powder and swaying like palm fronds as the auto careens through the roads negotiating traffic and bylanes..They are extremely risky though and contribute to the second highest cause of road fatalities in Chennai after government buses.
April 29, 2009 at 4:17 pm
Unrelated but useful.. check out zimride.com
I think I’ll be using a lot of it in California
November 25, 2009 at 4:22 pm
Well, i was not aware of the Bangalore style of Auto-rickshaws till i came to Manipal. In Ranchi, only shared autos ply on the road. Its an experience commuting on these autos..