Reforms In Intermediate Public Transport (Auto Rickshaws)

Dear Hon’ble Chief Minister Smt. Shiela Dikshit, Hon’ble Minister of Transport, Shri Arvinder Singh Lovely and transport commissioner Shri R K Verma

With regard to the problems commuters face with auto rickshaw drivers (ARD), such as overcharging and unruly behaviour, we wish to bring your attention to the following facts.

Out of the two types of autorickshaw drivers, 80 per cent are renter-drivers, renting autos from contractors who own multiple vehicles. They pay Rs 250-300 for 10-12 hours and earn the same amount in profit: half their daily taking goes on rent and CNG. Owner-drivers own their machines, although “owner” is misleading as most are repaying huge loans to auto-financiers from whom they purchased the rickshaw and the required permit. Monthly payments are Rs 9,000-15,000.

Two decisions have strengthened the auto-financiers’ hands. In 1997, the Supreme Court capped the number of autos, trying to cut emissions. No new auto-permits would be issued; nor could they be sold. Delhi’s size and population grew, but the number of autos did not. Consequently, the permit price rocketed and a black market emerged. Only auto-financiers won; their existing stock of auto-permits appreciated. In the late ’90s, a new rickshaw with permit cost just over a lakh. Today, after a decade of black-market inflation, the same package costs Rs 4-4.5 lakh: Rs 1.45 lakh for the auto, Rs 3 lakh for the permit. Meanwhile, demand for rented autos rose with new migrants, but supply froze, allowing contractors to hike rents.

Then, in 1998, the Supreme Court ordered public transport vehicles to convert to CNG by 2002. Owner-drivers had to pay Rs 30,000 each. In 2000, Delhi had 83,000 autorickshaws. In 2002, there were 55,000. The average owner-driver could not afford it; thousands had to sell their autos and valid permits cheaply to financiers. Others had their permits voided and were left unable to legally drive their autorickshaws: selling them to a financier was the only option. By cancelling and hoarding permits, financiers and the Transport Department managed to get rid of over a third of Delhi’s autos, sending permit prices spiralling.

Financiers now hold most of Delhi’s auto-permits — but in the names of the original owners (not the financiers), who sold their vehicles years ago. When a driver pays Rs 4-4.5 lakh for the auto-permit package, the permit will be transferred in his name only when the loan is repaid. Until then he drives “illegally”. Renter-drivers have the same problem: the auto-permit is in the contractor’s name, or a false name to cover the contractor’s activities.

Other methods exist to retain control. The financier will make the driver — frequently a new migrant to Delhi — sign several blank loan contracts. This gives him power to raise interest rates and deny the driver ownership even when the loan is fully repaid. It also allows him to charge extortionate “penalty charges”. Many of Delhi’s owner-drivers have been repaying loans for many years due to compound interest and “late payment penalties” of up to Rs 30,000. The contract maximises the financier’s ability to repossess the autorickshaw. Once snatched back, it can be sold to the next driver. Many vehicles have been “sold” and repossessed five or six times.

The over-regulatory regime demands Auto-drivers to carry around 16 documents with them at all times, “available” from the transport department on application. However, each application requires an absurdly long list of supporting documents: a 50-year-old Bihari driver may be asked for his old school certificates and Delhi ID and ration cards. Impossible requirements, of course, lead to bribes being offered.
Is it surprising, then, that in this distorted market, auto-drivers can’t rely on the meter? Somehow, in the midst of all these repayments, rents, bribes and challans, the autowallahs must feed their families.

Yet auto rickshaws are a vital part of Delhi’s infrastructure: they are efficient, affordable, economical, environmentally friendly — and iconic. They cannot 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 needs a bigger, better fleet of intermediate public transport vehicles that provide convenient public transport to residents respecting right to livelihood of the drivers.

The apex court-appointed Environment Pollution Control Authority in January this year cited the freeze ordered by the apex court on the number of autos at 55,000 in the city as the main reason for the financier mafia selling autos at an escalated cost.