The Unique Issue of Auto Drivers in Chennai, India

Autos are short for auto rickshaws. They are just like taxis, with the exception that they are much smaller and can seat only three people behind the driver.

In the city of Chennai, autos play a very important role. Public transport is often so crowded, that people who are not used to it often find it impossible to travel. In addition, there is a large segment of people that cannot or will not use their own conveyance. This could be for reasons like simply not owning a car or bike, to not having the patience to find parking space, etc.

Autos are ubiquitous in Chennai. There are approximately 70,000 autos. However, their distinguishing factor is the prices they charge. Legally, they are supposed to charge by the electric meter, depending upon the distance. However, this law isn’t enforced. As a result, the autos charge whatever they can get away with. This often ends up being 4-5 times the cost of the electric meter.Autos In Chennai

Image Credit: Pandiyan
This is the surprising bit. There is no dearth of autos in Chennai. According to the laws of economics, the intense competition should ensure that an auto driver does not outrage the customer with high prices, thereby driving the customer into the arms of another driver. Yet auto drivers continue to charge ridiculous prices, confident in the knowledge that no other auto will charge a reasonable price.

In all my years of living in Chennai, I am yet to come across an auto driver who charges by the electronic meter. How is this? If I was an auto driver, I would get more business by charging all my customers by the meter. I would get all the delighted customers who would regard me as an honest driver. The relatively lower pay per customer would be compensated by the fact that I would never be out of work, as no customer would refuse to travel with me. In fact, I would put a sign on my auto openly claiming that I charge only by the meter!

Seeing me, all other auto drivers would be forced to do the same if they want to keep up with me, and soon any driver who doesn’t charge by the meter will be out of work.

Auto Meter

Image Credit: mikecogh

But this doesn’t happen. With all my expertise in economics, I’m unable to understand how this is so. As of now, an auto driver will refuse to carry a passenger if he doesn’t get his outrageous price. Why? Is he so confident that he will be able to get another passenger in that time who will be willing to pay the high price?

It’s a cartel of immense proportions that seems to contradict the economic theory that large cartels are unstable. 70,000 drivers have somehow come to an agreement that they will all charge outrageous prices. The public, for it’s part, has lost hope. They know that refusing one auto’s demands doesn’t mean that they will get a better deal anywhere else. The result is that each customer is forced to pay the high prices that the very first auto demands, knowing that he will have no better luck elsewhere.

Customers do try and ask two or three autos one after the other in the hope that one of them will charge a lower price (though still not by the meter). But this never happens.

The drivers do not seem to be behaving rationally. By not lowering his prices or charging by the meter, an individual driver is being stupid since he would get all the customers. But by doing this, the auto drivers collectively side step the prisoner’s dilemma.

A classic case where being irrational benefits the group as a whole. The result being that the city of Chennai is being taken for a very expensive ride by a bunch of stupid irrational drivers! Government regulation prevents a private player from entering the auto market and offering reasonable rates, thus cutting off the only hope of some real competition entering the market and rescuing the city.

9 comments to The Unique Issue of Auto Drivers in Chennai, India

  • Venkataramanan Gopalakrishnan

    I agree with you, I think we need more private players entering the AUTO’s part of transportation and I mean all the public transports cause then alteast would we all Chennai be able to see Clean buses, autos or even trains and mostly the roads. They are so poorly maintained. Would the Respective Authorities look into this issue seriosly as it would change the face of Chennai into a much prettier one!

  • Bhagwad Jal Park

    Dear Mr. Gopalakrishnan,

    I fully agree with you. Private players being allowed to enter the market would indeed benefit people tremendously.

    In fact, I feel that people may not mind paying even a higher price. What angers and irritates them is the knowledge that they are being taken advantage of, and being charged based on the individual driver’s perception of how much can be got out of them, instead of a systematic appraisal that is uniform.

  • Adithya

    Dear all.. Auto in chennai is not only a state shame but national shame. Only political parties (most stupid) both Dravadian parties, because more than 50% are owned by them only. Having travelled all over India, I dont think that woman can be trated so cheaper than on chennai roads by these auto drivers. I am not over doing, but 99.9% autos are culprits and uncivilized. a big drawback in chennai more people rely on these vehicle (like train in mumbai) for travelling from point A to B in time and other transport systems are in very bad shape (buses) or not well conneted. Its unfair to call them as chennites but can call them as Crude Tamilians. Karunanidi and Jaya should die the state will get the real freedom…

  • saraswathy

    In many cities like Bangalore and Hyderabad, Auto drivers uses electronic meters to charge. In front of the passenger seat, auto driver license are pasted in every auto. If the auto driver misbehaves or demmands more, you can easily complaint to RTO by telephoning. They will immediately call the Driver for enquiry. Autos are very systematic in those cities. But why the same thing is not happening in this city?

  • Anvesh

    Somehow Tamil Nadu reminds me of the hostile, self-preserving, fight-for-everything race from which we evolved into this civilized, compromise-seeking race. And the worst of this lot, you guessed it, are the auto drivers. That was long back and now I live in Mumbai. One of my friends asked me why I sit on the edge when in an auto, as if I am ready to jump out. It was then that I realized that the Chennai auto drivers have a left a scar in my pysche. If you are soft-spoken by nature, I advise you to never go to, or worse, settle in Chennai. Unless you want to see how evolved from Nendarthals.

  • Vijayalakshmi Ambalavanan

    Dear all,
    I request you to look at life from the other end – the auto driver’s end. True, he charges more than is legally allowed. However, the current auto fares were fixed way back in the year 1995 when the price of petrol for 1L was Rs.35. Even though petrol rates kept increasing, the auto fares were not revised by the government.

    An auto driver who charges rs.14 minimum and rs.7 every extra km, would earn approximately rs.800 per day. It is a known fact that most autos are hired/rented and it’ll be charged on a daily basis. hence, Rs.200 will go for his auto rent and another 200 for petrol and other minor expenses. With the remaining 400 rupees, an auto driver has to feed his relatively large family (mother, father, wife and 2 or 3 children)as well as for other expenses such as medical, rent, bribes and other necessities without which survival in Chennai becomes hard. All these factors force an auto driver to spend at least rs.100-150 apart from his earnings. And hence, the over-charging.

    How would you react when an entire society turns up against you making a decent living? A decent livelihood? Questions your very right to democracy? That is how an auto driver feels. They have been thrown into the negative light for so long that they use a defensive mode as a defense mechanism. @Avnesh: Everybody has their bad days, you just got unlucky.

    I am not justifying their act of over-charging but they are also victims like you and me. The only solution to this is to demand the government to revise auto fares as petrol costs go up. Next time you travel by auto, why don’t you ask the driver about these fares and how it will help them once they are revised? While your doing so, ask them if they will use meters once the fares are revised and you will only hear a unified voice shout out: YES!

    So, now what do you think?

  • rameshwar

    yea.. I totally aggre to what had viji pitched in and spoke about the issue. We should also undertand and look at common man, who’s day today expense going up above the sky. Their nothing can be done much about it but start to accept things as it is.

  • prem

    even call taxi rates are cheaper

  • veeru

    TOI has started a campaign now. let us hope something will come out in spite of all vested interests

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