Taxi Companies in Bombay: an Episode in India’s Urban Transportation

By Ajay Shah, on March 23rd, 2010

The problem

The best thing that you can ask for, in getting around a city, is a comprehensive underground metro system, where a tube station is at worst 200m away from wherever you might be. There is no city in India that has this. While the Delhi Metro is very impressive, it is still not aiming to intensively criss-cross the city in this fashion (a walk of no more than 200m to the metro station from any point).

The next best thing you can ask for is: well functioning taxis. A good success story in India is the black/yellow taxis of Bombay. They are ubiquitous, can be hailed down on the fly, will charge you by the kilometre, and the meters are not grossly off. I am not aware of any other city in India where taxis work like this. But the quality of vehicles is atrocious, and the customer experience unsatisfactory.

Air-conditioned taxis were tried in Bombay but collapsed into the wrong equilibrium. Customers came to believe that the meters were tampered with, so there were few customers, so the only way to make ends meet for the provider was to tamper with the meters, and so on. Somehow, the law enforcement, which went into ensuring veracity of meters of the traditional black/yellow taxis, did not come about with the blue taxis.

The solution

So it was a big step forward when the Maharashtra government setup a policy framework for corporations to setup a fleet of taxis, as is found in most good cities outside India. These are high quality vehicles. The Transport Department of the Maharashtra government, through its RTOs and the Weights and Measures Department, takes responsibility for ensuring that the meters are not tampered (and this is easily verified by the corporations operating these fleets, thanks to GPS and GPRS). Access through call centres and the Internet makes it easy to call a cab. In addition, as the number of taxis per city builds up, it becomes feasible to just step out into the street and grab one.

The place where I noticed this change the most was at the domestic airport. As a traveler, an incoming flight would bring me to the Bombay airport. I would then walk to a dedicated bay which could hold two taxis at a time, and grab a Meru. This would take me anywhere, with metering by the kilometre, and no fuss. It was just great.

The collapse

This worked so well, it took away business from the traditional black/yellow taxis. There were bays for 20 traditional taxis and 2 Merus at the airport, but customers would line up for the Merus while the traditional taxis stood around without customers. Bombay unfortunately has a trade union of taxi owners. They created a ruckus about this, engaged in a little violence, and pressurised the local government and the airport. In a sensible market economy this should have been no issue. Violence should have been dealt with by the police. Meru’s services should have continued to make progress regardless of what the incumbent felt.

The authorities buckled and Meru was evicted from the airport. That is, the 2-bay which they had earlier been given was taken away. So the traveler could no longer step out of the plane, step out of the terminal and grab a Meru.

To me, these events symbolised the governance problems of India. Here you had a very nice new piece of infrastructure. The incumbent (black/yellow taxis) should have lost market share when the new technology came in, and that creative destruction was taking place just fine. But the incumbent then engaged in hooliganism. The forces of law and order did not work effectively in blocking small-scale violence at the street level. The authorities did not have the spine to think about what was best for the users of the airport. The rule of law was not strong enough for Meru to enforce its rights as a legitimate taxi operator authorised by the government – the 2-bay which had been promised to them was taken away. It was a black mark for the quality of governance in Bombay and in Maharashtra. A very nice initiative that had improved the airport lay in shambles.

I single out Bombay and Maharashtra here because Meru is also operating in a few other cities, and this kind of collapse did not come about in any of those cities.

Resurrection

In recent weeks, Meru has comprehensively solved this problem. Here are the steps that I went through a few days ago:

  1. As I was stepping out of the plane, I called 4422-4422
  2. At the menu, I punched 5: a hotkey which says that I have just come in at the domestic airport.
  3. The call centre employee asked me which airline I had come in from. I named the airline, and they then knew which terminal I was at.
  4. Immediately, the call centre employee said: “Your car is number 9152” and hung up.
  5. This call was at 00:27 and it lasted all of 37 seconds. (If you don’t have a cell phone, there are telephones inside the terminal where this call can be made).
  6. At 00:29 I got an SMS giving me details about the car.
  7. At 00:32 the driver called me and said he’s waiting for me.
  8. I stepped out of the terminal and the car was waiting to pick me up, alongside the private cars that had come to pick up other travelers.

It was a very impressive use of technology. Through this, in effect, Meru has comprehensively solved the problem of being denied the 2-bay where taxis would be waiting for customers. Through this, they have successfully routed past the impediment of the breakdown of law and order and contract enforcement in Bombay.

Not yet fully plugged in

These new facilities are not yet properly in place ubiquitously.

At the Delhi airport, the airport penalises users of Meru with a charge of Rs.80. The Meru arrangement there is not as frictionless as that in Bombay. And, they use the same rigid zone definitions of the traditional pre-paid taxis, which isn’t relevant in this new setting.

At the international airport in Bombay, there is no access to Meru.

So it seems that a lot has yet to be done to properly integrate good taxi services into urban transport.



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The IMF, the EMF and All the Worthless Money In Between

By Richard Daughty, on March 23rd, 2010

There are those (me) who think that the International Monetary Fund (IMF) is a huge load of worthless, corrupt crap, not only because their dismal record pretty much shows that they are miserable failures, but because that is the way things always end up when someone is given power and money in huge amounts, or even in moderate amounts.

Or, it turns out, even in small amounts, as I prove each week when the kids, over whom I have absolute, awesome power right up until the exact moment when the social workers and/or cops come roaring up, bursting into the house and are literally standing between me and the whining kids to face me down, so I have to explain to them, too, how “The foul Federal Reserve is creating so unbelievably much money (so that the loathsome Obama administration can borrow and spend it) that inflation in consumer prices is going to destroy the buying power of the dollar, and that is why this week, just like last week, I don’t want to give these whining kids their paltry allowance, let them eat anything that is not on sale at the grocery store, or drive them anywhere, except maybe to a military recruiter or a bus out of town, but especially not to see their hoodlum friends!”

I suddenly realize, to my horror, that I am standing there drinking coffee out of one of my many “World’s Worst Father” coffee mugs that the kids always give me as a present for every Father’s Day, and I instantly knew that explaining the essence of the Austrian theory of economics as a rationale for being stingy and cruel by withholding money and benefits from my own kids was certainly not going to fix this mess.

So, I decided to appeal to the innate greedy investor that is in all of us, and I said, “I’m going to take this little bit of money, see, that still has some buying power left in it, although less and less each day which is why prices go up and up each day to make up for it, and I am going to add it to the little bit of money I have already accumulated and secretly squirreled away so that none of these little leeches can get their hands on it, and I realize that leeches don’t have hands, so don’t bother pointing it out to me that the metaphor is not entirely apt, but you get the gist of it, and then I am going to use the money to buy some more silver, which is so seriously under-priced that the opportunity thus afforded to the astute investor far outweighs the whining demands of, ugh, children.”

There was a kind of stunned silence in the room when I had finished, and so, eager to get the conversational ball rolling again, I said, “And anyway, the whole thing started out as just another Angry Mogambo Tirade (AMT) about, this time, the International Monetary Fund (IMF), which invented their own money, the Special Drawing Right, which had the effect of expanding the world money supply so as to prop up idiot countries that have bankrupted themselves and who mostly deserved to be destroyed, and it does so at the cost of permanent inflation in prices so that poor people, around the world, suffered more and more as prices constantly went up faster than their incomes, and who suffer a lot more than these stupid, whining kids here and their so-called ‘psychological trauma’!”

Well, it got ugly from there, it’s all over now, and there is nothing more about it except planning my revenge, court appearance dates, and attending some stupid “Good Parenting Course” being taught by some nitwit “counselor” half my age, whom I exposed in the very first class as a low-IQ loser when I asked him, “Have you told your children to buy gold, silver and oil to protect themselves against the inflationary horror caused by the Federal Reserve creating so impossibly much money so as to allow the lowlife Congress and the idiot Obama administration to deficit-spend us into the hellish oblivion that is, in two words, our future?”

He replied, real intelligent-like, “Huh?” which told me, loud and clear, that this guy was an idiot, which was soon proved when he instructed us to (get this!) “listen” to our children, like I haven’t heard them crying and whining and saying, “Gimme, gimme, gimme!” and, “I hate you!” their entire lives, seemingly every freaking minute of every freaking day of my life, sometimes even when I am – horrors! – completely sober, which makes it all much, much worse. Moron.

But as far as bad ideas like the IMF goes, it just gets worse until you are screaming, “No! No! No!” in your nightmares because TheDailyBell.com noted that the German finance minister, Wolfgang Schäuble, “floated the idea of a European Monetary Fund (EMF) to act as a lender of last resort to euro-zone countries that could not raise funds in capital markets on tolerable terms. He offered few details about how an EMF would be financed or how it would operate.”

Creating more money out of thin air, so as to increase the worlds’ money supply, to bail out more corrupt, incompetent deadbeats, at a cost of higher prices for everybody? Yikes!

See what I mean? We’re freaking doomed!

Knowing that, I wonder what the little counselor thinks about gold, silver and oil now! Hahaha! I wonder if he is saying, “Whee! This investing stuff is easy!”

The IMF, the EMF and All the Worthless Money In Between originally appeared in the Daily Reckoning.



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