Thursday, March 15, 2012

Why Chennai Autowallas charge you exorbitantly?

Why Chennai Autowallas charge you exorbitantly?

I was in Chennai for a month. During this time, I used to frequent by Autos.
If you are not aware, the chennai autowallas charge too high in our country.

For 10 kms, you pay around 80 in Mumbai, and around 90 in Delhi.
Whereas you may have to shell minimum 150 in Chennai.

This is a pure game of demand and supply, along with rules and regulations governing autowallas.

In Chennai, public transport is too good and is too cheap. When people have to wait for just 3-5 mins, and have to pay just Rs. 10-12 for 10 kms distance, why would they pay 150 for an Auto !
Also, the city has good number of people with their own vehicles. Most people commute by bikes or by their own cars. Thus, the Auto-wallas are left with almost no passengers !

Its common to observe that whereever volumes are high, prices are low.
In Mumbai, Autowallas are almost always occupied. You will see that there are more people waiting for autos and so there is more demand for autos and less supply. Since volume for autowallas is high, they can afford to travel at low cost. Also, add to it the stringent rules and regulations that are enforced upon them. So the authorities strictly control the auto fares in Mumbai.

In Chennai, the equation is totally opposite. The supply of autos is more and demand is too less. Since volumes are low, autowallas have no option but to charge v high from those who take an auto. Add to this, no strict govt rules and regulations and so the prices are controlled by autowallas (as in they work like a cartel)

As an example, if an autowalla is travelling 200 kms per day in mumbai, charging Rs 8 per km, his revenue is Rs 1600 per day. If an autowalla is travelling 100 kms per day in chennai, to make Rs 1600 revenue, he will have to charge you Rs 16/ km !! which is 2 times that of Mumbai !

So, how has been your experience with Auto-wallas in your city ?
If you enjoyed my article, do subscribe to my blog.

PS: You should say sorry to Chennai autowala if you dared to quote him below Rs 30 (even for 1 km)