Auto-rickshaws in Delhi: Why Sheila Dikshit’s comments are misguided

Guest post by SIMON HARDING

As every Delhite knows, taking an auto journey in the capital is not a pleasant experience. Drivers speed off at the very mention of your home or office, leaving you stranded on the roadside. When an auto-wallah finally agrees to go where you want, he steadfastly refuses to run by the meter and instigates a minute or so of stressful haggling. You arrive at your destination frazzled, irritated and over-charged. This situation has not gone unnoticed. Chief Minister, Sheila Dixshit recently announced plans to phase out the auto-rickshaw after five decades of service. Auto-rickshaws are “not a good option”, she complained, auto-wallahs “harass” passengers and up to half are plying the streets “illegally”. With the Commonwealth Games fast approaching, the eyes of the world will soon turn to Delhi. Auto-rickshaws do not fit with the CM’s desire to see visitors return home “with the impression that they have been to a truly civilised city”. She promised futuristic battery powered taxis, which thrilled middle class Delhi.

But before the auto-rickshaw and the much-maligned auto-wallah can be condemned, we must look at how the auto-rickshaw sector in Delhi operates: at the rules, regulations and policies, which govern the livelihoods of the city’s 80000 or so auto-drivers. Some questions need to be answered: why are Delhi’s auto-wallahs so greedy and grumpy? Why won’t they switch on the meter? Why do so many ply “illegally”?

There are two types of auto-driver: Renter-drivers rent their vehicles from contractors (who own multiple autos). They pay Rs.250-300 for 10-12 hours and expect to take home the same amount in profit: half their passenger fares go on rent and CNG. Today around 80% of auto-wallahs rent their rides. Owner-drivers own their autos, although ‘owner’ is somewhat of a misnomer as most are repaying huge loans to auto-financiers from whom they purchased both the auto-rickshaw and the all-important auto-permit, without which the auto cannot legally ply the streets. Owner-drivers pay what they can upfront and then take a loan for the outstanding amount from the auto-financier. Once the loan is repaid, the auto-financier transfers the auto-permit into the new owner’s name. Monthly loan repayments are typically Rs.9000-15000.

In 1997 the Supreme Court froze the number of autos in a bid to cut emissions from vehicles. No new auto-permits would be issued. No auto-permits could be sold either. The supply of auto-rickshaws was capped whilst the demand for public transport surged as Delhi’s population grew. Consequently, the price of an auto-permit rocketed and a burgeoning black market for permits emerged. Auto-financiers found themselves in a lucrative position as their existing stock of auto-permits suddenly became a very precious commodity indeed. In the late 90s, a new auto-rickshaw with permit cost Rs.1-1.5 lakhs from an auto-financier. Today, after a decade of inflation on the black market, the auto and permit package costs Rs.4-4.5 lakhs: Rs.1.45 lakhs for the new auto, Rs.3 lakh for the permit.

The cap was also good news for contractors. No new auto-rickshaws coming onto the streets, but the number of willing drivers was increasing as migrants continued to arrive from Bihar and UP in search of employment. Demand for rented autos rose but supply froze, allowing contractors to hike rents.

A second policy shifted the balance of power in favour of financiers once again. In 1998 the Supreme Court ordered that all public transport vehicles should convert to CNG. Owner-drivers were faced with a Rs.25-30000 bill for a CNG conversion kit and the threat of having their precious permits canceled if they did not comply. In 2000, just before the switch, there were 83000 auto-rickshaws on the roads, but just eighteen months later there were 55000. Where did these autos go?

Aware that the average auto-wallah could not afford a Rs.25-30000 CNG kit, ‘soft’ loans were made available from the Delhi Finance Corporation. However, the increasingly powerful auto-finance cartel paid officials in the Transport Department to do two things: firstly, to stall the ‘soft’ loan scheme, denying drivers credit and, secondly, to arbitrarily cancel thousands of auto permits . Consequently, thousands of drivers were unable to convert their autos to CNG and had little choice but to sell their autos and valid permits to financiers at bargain prices. Others had their permits voided and were left with a machine they could not legally drive: selling it to a financier was the only option. By canceling and hoarding permits, financiers and the Transport Department conspired to reduce the number of autos by nearly 30000, sending the permit price spiraling.

Financiers hold most of Delhi’s auto-permits. But these permits are never in the name of the financier. Most are in the name of the original owner, who may have sold the vehicle many years ago. When a driver buys the Rs.4-4.5 lakh auto and permit package, the permit will not be transferred into his name until he has paid off the loan. Thus he drives “illegally”. Delaying permit transfer is just one of the weapons in the financier’s armoury. The financier does everything he can to avoid legally signing over the auto to the driver. Postponing the permit-transfer means that the auto-wallah is stuck plying “illegally”. The same is true for renter drivers as the auto-permit is not in their name, but in the name of the contractor or a false name employed by the contractor to cover his activities.

Many auto-wallahs come from rural Bihar and UP. They have little experience with contracts and business procedures. They have no way of knowing that the actions demanded of them by auto-financiers are dubious, shady and illegal. For example, when signing a loan agreement, the financier will insist that the driver signs several blank contracts. This gives the financier power to raise interest rates above the standard 16-18% and deny that he has received a penny from the driver even when the full loan has been repaid. It also allows him to charge extortionate “penalty charges” and to trade the driver’s debt on the black market. Many of Delhi’s owner-drivers have been repaying loans for seven or eight years or more, due to compound interest and “late payment penalty charges” of up to Rs.30000. The contract is designed to maximise the chance of repossessing the auto-rickshaw from the owner-driver. Once snatched back by the financier, it can be sold on to the next unsuspecting driver. Some auto-rickshaws have been sold and subsequently repossessed five or six times by the same financier.

The financial pressure on the auto-driver does not end here. The Transport Department and the Traffic Police take their cut from drivers.

Auto-drivers must carry roughly sixteen documents with them at all times, including a licence, a commercial badge, vehicle fitness certificate, pollution control certificates for the past year amongst others. To get each compulsory document, the driver must make an application to the Transport Department. However, each application requires a long list of supporting documents (as many as fifteen), which most auto-wallahs simply do not have and have little chance of obtaining: A fifty-year-old driver applying for a commercial badge may be asked for his old school certificates from rural Bihar in the 1960s whilst Delhi ID and ration cards are standard for many applications, documents which migrant drivers do not possess and have virtually no chance of getting. Aware that these requirements are impossible to meet, Transport Department officials solicit bribes from drivers to overlook gaps in applications and often even to process complete applications.

Given the sheer weight of paperwork a driver must carry around and some pedantic traffic rules, the Traffic Police are able to stop an auto-driver at random and find an excuse to challan him retrospectively. The officer simply keeps asking to see documents: he is bound to find one or two which the auto-wallah is missing. If not, then he can issue a challan for “wrong uniform” (including wearing the “wrong socks”), “incorrect lettering on auto” (Rs.1500 challan) or “illegal stopping” (despite the fact that the city’s 312 auto-stands are unmarked and no one knows where they are. Tiny Pune has over 1000 marked stands). Often the challanning officer knocks a few rupees off the challan and pockets the auto-wallah’s money.

Delhi’s hated auto-wallahs are, it appears, not naturally nasty, aggressive people. Rather, they are under huge financial pressure. They pay half their daily wage as rent or hand over thick wads of cash to financiers at the end of each month for outrageously priced vehicles, which they have little hope of ever legally owning. Transport Department officials demand bribes from them for the most basic of services whilst they are easy prey for policemen in search of quick cash. Somehow, in the midst of all these repayments, rents, bribes and challans, the autowallahs have to feed their families. Who can do all this on just Rs.4.5 per km? No wonder the meter is a dirty word as far as most auto-wallahs are concerned. Go by the meter and their families would starve.

Auto-rickshaws are a vital part of Delhi’s infrastructure: they are efficient, affordable, environmentally-friendly (they are CNG-powered after all!) and economical transport. They are an icon of Delhi and the envy of many other global cities. The auto-rickshaw must not be scrapped. Instead, the whole auto-rickshaw sector must be reformed, starting with the issuance of new permits. To become a “world class city” Delhi does not need even more taxis and cars; it needs a bigger, better fleet of auto-rickshaws to provide quality public transport for residents and visitors and livelihoods for one lakh drivers.

[A heavily cut version of this article appeared yesterday in the Indian Express. The author is a researcher on informal labour at the AMAN Trust, New Delhi.]

25 thoughts on “Auto-rickshaws in Delhi: Why Sheila Dikshit’s comments are misguided

  1. vivek

    Thanks..very well argued. We need this kind of quality research with empirical data if we want to fight powerful political-money-and contractor mafia……keep up the good wrok.

  2. Amit Misra

    Great article. I was aware that an autorickshaw costs more than a Maruti or Santro in Delhi, and kept wondering why the authorities are so antagonistic towards a 150cc, eco-friendly transport vehicle, while they evidently have no qualms about the 1000-plus cc taxis.

  3. miao

    I’m curious here. I agree that given Delhi’s very high road-to-area ratio, small vehicles like auto may be good alternative public transport. But I’m not sure about cities like Kolkata where this ratio is extremely low. Autos invariably congest the road in such cases and traffic becomes a nightmare. Buses and metro looks more attractive. Even within Delhi compare autos in Dariyaganj and in Outer Ring Road, for example.

  4. Dipak Dholakia

    This is a good article. Auto-rickshaw economy comes out so clearly for the first time. Only the other day I had to take a rickshaw. He told me how hard it was for him to earn enough to survive. He said, 70-80% of his time is for others whom he must repay. He said, he hardly makes Rs. 10,000 a month. And Supreme Court too does not always think of the consequences of its decisions.

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  6. suchismita

    this was one of the most informative and enlightening articles that i have read regarding the economy of public transport.
    iam just wondering something here that is, why hasnt the Delhi government revised the metre rates like they have done in trivandrum, kerala? the autos there have always run by the metre and it has constantly been revised by the state govt. with time. i dont understand what stops the delhi govt from doing so.
    autos are one of the most important modes of public transport. scrapping them is a ridiculously demented idea.

  7. Very good points. I laughed out load (not in a nice way) when the CM suggested we should replace autos with electric cars. She KNOWS that’s not going to happen, but somehow feels compelled to put a coating of greenwash on stupid policy initiatives whenever possible! CNG powered autos are a green way for people to take short hops in the city–to the metro station or bus stop, for example. (Sure, cycles would be better, but her administration does not even strictly enforce the cycle lanes in the one place they exist, on the BRT.) There are, in fact, designs for more efficient autos out there, but she’s not interested in that. She just wants to “clean up Delhi”, which seems to mean banning litter, poor people, and “rude” autowallas.

  8. Superb article and really insightful and researched. Its sad that the story is no different in other cities. Exhorbitant rates charged by auto drivers is only the symptom not the problem; an effect not the cause; a fever masking a dangerous flu. But as always, govt tends to treat the symptoms rather than the disease. Now how do we ensure that this superb article reaches the right eyes??

  9. BC

    It’s not really the same in all cities. Autos in West Bengal run on fixed-rate and fixed-route mode. So we don’t have over-charging problem. But we face serious congestion, pollution and traffic rule violation issues. Kolkata has the dubious distinction of highest incidence of pulmonary infection and lung cnacer. Now, “Auto” as a metaphor of “Small” and “Alternative” really amused me for long. Because people like me, living outside big metros, in suburban small towns, auto is seriouasly “mainstream”. They choke and harass you everyday every moment, but you can’t do without it. So, like most of the “Mainstream” stuff, auto is a necessary evil to us, who don’t have easy access to buses, taxis and metros, or who don’t own private vehicle. This doesn’t mean I don’t support what is said before, but just want to emphasize that it’s not the same everywhere.

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  11. Garima Jain

    A very insightful article indeed, and very well argued. Auto rickshaws are a great invention considering they do not require much street-space per passenger and as they are constantly moving, they require very less parking space. Being light and running on CNG additionally reduces their carbon footprint. With all these advantages, it is evidently foolish to rush into decisions without understanding the root cause of the problem. Policymakers MUST analyse in a similar manner as done here, before they commit to new fallacious policies, which can cost the taxpayers a huge loss in turn. But having said that, just in the spirit of being constructive, what then do you suggest could be an alternative?

  12. Prashant Jain

    While I agree with the author on most facts.. I am sorry that the discussion entirely looks just one side of the story.

    To start with, I have one basic question that why auto rickskaw business in Mumbai is entirely different from Delhi.

    They run on petrol (some on CNG also) which is much expensive than CNG (in fact CNG in Mumbai is also more expensive than in Delhi) and still charge as per meter (rather Re 1 less than the reading in meter), never refuse to go to any place and are much polite. You will always find them in uniform. I am sure that auto rickshaw wallas in Mumbai also need to feed themselves and their family and must be having almost similar financial situation as auto drivers in Delhi.

    Even then if I accept author’s point of finance mafia and corruption, how can the “Refusal to go on certain routes” can be explained. Contrary to authors point of view, an auto rickshaw driver should never refuse a passenger since each passenger gets him much needed revenue to feed his family and pay auto rent. An auto driver in uniform is a rare site in Delhi.

    In the last, what on earth can justify the rude behaviour of Delhi auto drivers… it doesn’t cost a dime to behave good with public. May be author should visit New Delhi railway station and try to get a pre-paid auto rickshaw, perhaps the other side of coin would also be known to him.

    Very last, there are very “Rare breed” of auto drivers in Delhi who would always charge as per meter and won’t take you for a”ride” and am sure are fulfilling their personal & financial liabilities.
    Could author please explain how “these” auto drivers can defy the law of econmics of supply & demand, finance mafia and corruption and still able to serve passengers with smile and feed their familier with pride ?

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  14. anubha

    good to look at both the sides pf a story, and that too in detail when often in this country most of our own mistakes are cleverly slipped into sum1 elses pocket !!
    i have a question regarding a research project – who decides the uniform for the auto riksha drivers?? which authority takes care of their uniform??

    Waiting to hear soon.
    Thank You

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    1. vikas

      Very informative article…!!

      Can you please tell us something about battery operated auto ricksa, As i have heard there is no permit is required and no legal formalities. Is it true.??

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