Sucheta Dalal :Shades of grey in a black-and-yellow world
Sucheta Dalal

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Shades of grey in a black-and-yellow world  

Dec 26, 2005

Consider this: A majority of Mumbai’s taxi drivers these days are migrants from Uttar Pradesh and Bihar. They live out of rickety, non-air conditioned vehicles, park for the night in community groups near public bath and toilet facilities and eke out a living after making multiple pay-offs to hire and maintain their vehicles.


Yet, a majority of them have turned down the opportunity to drive brand new air-conditioned taxis, wear a smart uniform, optimise earnings by working less hours, be insured, get a mobile phone and have access to better parking and service amenities.


How and why does this happen? A simple answer is ignorance, apathy and the vested interest of trade unions and permit holders who are working together to strangle the metropolis by stalling modernisation of taxi services through an automated network, that will provide flexibility in service and pricing and high capacity utilisation.


All this and more is part of the slow discovery process of Arun Sabnis, an NGO activist (from the Fulora Foundation) who is aspiring to help resolve the chaotic traffic situation in Mumbai through a modern taxi project. The Fulora Foundation, says Sabnis, works with street children and beggars. In the process of its interaction with these children, Fulora discovered that some of them graduate to running taxis, often managing four or five vehicles simultaneously.


Operating a taxi in Mumbai needs a ‘‘permit’’ and their issue has been frozen since 1992. There is however a neat business opportunity for permit holders (mainly cornered by politically connected individuals across Maharashtra with little or no connection with Mumbai) to earn between Rs 5,000 to Rs 7,000 every year by leasing out the permits. What is worse, nobody is certain that the number of taxis operating in Mumbai today is in fact limited to the number of permits issues by the government. After all, nobody is counting.


Sabnis learnt the business by travelling only by taxi to chat up the drivers and understand their problems. He discovered that some powerful agents control up to 100 permits and act as the link between taxi drivers and taxi owners for a fee. At the moment, taxi unions have said an emphatic No to the launching of a modern taxi service, even though union leaders were taken on a junket to Singapore to check out how the system works.


Taxi drivers are individually excited about the new service but don’t dare to offend the five powerful unions. They earn anywhere between Rs 1,000-1,200 on a 12-hour shift. Of this, Rs 400 goes to the taxi owner for a day shift and Rs 200-Rs 250 for a night shift. The owner flogs the taxi vehicle for two shifts, which explains their poor maintenance. Drivers pay for all damages and have no support if they are ill or injured.


The situation is worse with airport or point-to-point shuttle services. Sabnis claims that it costs Rs 2 lakh per year for taxi owners to book a spot in the Churchgate-Nariman point share taxi service; taxi queues at airports are so long that it takes 12 to 15 hours for a passenger turn. The Mumbai-Pune or Mumbai-Nasik queue is four-days long except on holidays.


Most drivers in such queues control up to four taxis. A neat collaborative arrangement ensures that the vehicles are pushed ahead by fellow drivers to allow multiple runs on different vehicles. No wonder airport taxis are notorious for harassing customers and demanding extra payment.


Sabnis and the Fulora Foundation promise to transform the business through a combination of better vehicles, a different financing structure and a modern, automated communication and management system created through a several international collaborations.


But before we go into that, let’s look at some numbers. Mumbai has 53,000 taxis of which only 30 per cent are in operation at any point of time, the rest hog public space and are idle. In comparison, New York has fewer than 10,000 taxis for a larger geographical spread. Revamping the taxi business is clearly a key to reducing Mumbai’s traffic congestion. Sabnis has come up with a Rs 320-crore project that has the support of the Mumbai Municipal Corporation. It involves a Special Purpose Vehicle to establish a 5,000 car fleet (Phase I) that will comprise small (50 per cent), medium (40 per cent) and top-end luxury sedans (10 per cent).


The plan is to tie up with financial institutions and vehicle manufacturers to buy back and scrap 5,000 black-and-yellow taxis and replace them with a new fleet along with existing permits. A tie-up with the Singapore-based Taxi Solution provider will help manage the fleet through a GPRS based control system.


Automation and centralised control is the basis of this service. Taxis can be hailed and book by telephone or Internet; they will not occupy busy streets of junctions looking for customers and will provide better service. Electronic meters will ensure accuracy and charge cards including corporate cards will offer payment flexibility. Discounts to reverse direction travellers during rush hour will optimise usage and happy-hour rates will encourage non-peak hour usage.


Fulora Foundation talks about innumerable little benefits such as secure services for women and senior citizen, attendant assisted taxis and convenience of pick-up. The economies of scale will allow it to develop and provide infrastructure such as taxi terminals, eateries and toilets for taxi drivers, as well as group insurance (including medical cover for drivers and their families), maintenance facilities, weekly offs, psychological counselling and shorter eight-hour shifts.


Sabnis has already worked out a clear revenue model that promises good profits in Phase I and a clear salability. While he has tied up with the technology providers and has already initiated talks with manufacturers, he has still to tie up the funding.


But Sabnis is clear that he does not want to enter the market by antagonising existing operators. Instead, he is working hard to woo the unions and convert their initial rejection of the taxi scheme into acceptance. Interestingly, Sabnis has no interest in making a hostile market entry. ‘‘I will only launch the service when the taxi drivers accept it,’’ he says. After all, it will benefit them the most. However, building acceptance will require government officials, taxi unions and users to shed their vested interests and work together to educate drivers and join the Fulora effort.



-- Sucheta Dalal