Monday, November 30, 2009

The economics of an autorickshaw in Delhi

Happened to talk to an auto rickshawallah in Delhi recently. Some interesting insights though not verified. Since they are coming directly from the horse's mouth,should be generally true:
1.There are 90k auto rickshaw permits in Delhi and new ones are not being issued.
2.One auto rickshaw driver who owns the auto-rickshaw,earns on an average Rs25k per month.
3. Some auto rickshaw drivers rent out theirs for night shift @250 per night + 50%of cost of maintenance.
4.An auto rickshaw from outside Delhi is fined Rs 5k as soon as he enters Delhi. Vice versa is not true.
5. The permit can be sold for upwards of Rs 3lakhs which together with the cost of vehicle at about Rs 1.25 lakh results in on road price of about Rs 4.25 lakhs.
6. The permit regime for Cars is liberal making it practically cheaper to have a Car on road than rickshaw.
7. The per km fare of rickshaw is Rs 4.5 and the auto rickshaw unions will shortly stage a strike to demand an increase. An average Car gives a mileage of 12km per liter and a liter of Petrol costs about Rs 50. So running cost per km are about Rs 4. But Car can accommodate 4-5 people, hence at maximum utilisation auto rickshaw is about 50% more expensive.
8. Due to the latest fare policy, per which public transport costs Rs 1-2 per Km, some people are reverting to use of auto rickshaws when travelling in groups. These people might eventually shift to personal vehicles. The expanded network of Delhi Metro may reverse some of that but cannot decisively arrest this trend.

Blessed thus by Delhi government, Cabs services in Delhi are going to grow a lot. After all ,Delhi has to become a 'global' city. Tata Nano, the new Rs 1 lakh car can only make the matters more interesting. Tatas were once asked to take over Delhi transport corporation. This might as well be the route they agreed to.


  1. Bagdu, you couldn't be wrong. Let me enlighten you on your points.

    1. There are just under 55,000 permits in Delhi.
    2. Auto owner earns an average of Rs.400 per day from renting, i.e., Rs.12,000 per month. This is less than half of your estimate.
    3. Night shift charge of Rs.250 is correct but maintence is the responsibility of the owner.
    4. Auto drivers cannot legally enter areas for which they do not have permits. This applies to Delhi auto venturing into UP or Haryana.
    5. You are correct on market value of autos.
    6. Cars have no permits. You can buy as many you want.
    7. There are no real auto unions in Delhi. We, at NyayaBhoomi, are the only voice of auto drivers and passengers here. Also, all autos run on CNG which costs about 70 paise per km.
    8. It is a matter of concern that public transport is not being promoted aggressively by the government. This causes pollution, congestion and parking problems - leading to huge economic loss.

    Good evening!

  2. Dear Rakesh,As per your website, there are 80k autos in Delhi and I am reporting a conversation not authenticity. This paper also claims the same number and since no new permits are being issued, one may agree on that number.
    2.That was not my estimate. This is the estimate of someone from auto fraternity. If one agrees with Rs250 for night rental, one would assume that this person must be earning about Rs200 on top of the rental. Earning about Rs 12k for night. So 25k per month is not far fetched. Again one shud expect considerable heterogenity like any business and earnings and night rentals may vary.
    3.The person did told me that those who do not have their own Autos have a tough time. Laws and fines outside Delhi might not be as stiff as in Delhi and penalty may not be a deterrant effectively rending it void.
    4.Read about NyayBhumi. It seems to be doing good work.Best of luck and keep up the good work.

  3. Hi Bagdu

    Thanks for the kind words about NyayaBhoomi. Since your post is based on a conversation with an auto driver, I shouldn't have expected accuracy.

    1. Our website says there are 80,000 drivers, not 80,000 autorickshaws. Some autos are driven in two shifts, which increases the ratio of drivers to autorickshaws.

    2. I am still not clear how you reached 25K figure. Please visit for details of what an average auto driver earns. Auto owners are no better off because virtually everybody owes money to auto finance mafia.

    Expect fireworks in Delhi later this month and dial-an-auto service by March/April.

  4. 1. No. of autorickshaws is ~75k as per Delhi government's transport department. This is an informative document on Delhi's transport sector outlining the current state of affairs and Government's long term vision. This sadly lacks attention to public transport focussing mainly on roads.
    2.Your estimation of 15kms per day is unrealistic. Even with that, if you remove the rent paid,earnings will come out to be Rs 15000. If one rents it out at night @300(your estimate) one can comfortably earn 25k. If I were an auto driver I will work as a night watchman for Rs5k rather than roam around for a pitiful uncertain Rs 4650 that has been estimated by your organisation.
    If autos were priced at their true economic value of around Rs 1.25 lakh, this is a stupendous return. Even on the 'real' price of Rs 4lakhs, just the rent of 2*300*30*12=Rs2.16 lakhs is just too much. I wonder why there is no sustained pressure for more permits or delicensing of the sector.
    3.Some experts have suggested removing barriers to movement of taxis and autos within NCR.Under sustained pressure from Manushi and other individuals and organisation, government had to delicense cycle rickshaws. Why cant auto rickshaws be granted same freedom?
    4. As per your estimate, one rents an auto for 120km and pays Rs 300 so rent itself is Rs 2.5 per km.Why not, instead, buy a Nano that gives a mileage of 20km per liter and hence whose running costs are same as the rent cost. So auto wallas have a very real choice now to get out of the clutches of auto 'mafia'.

  5. Dear Rakesh, I also had the chance to extract first hand info from an auto driver about his monthly income which he asserted as mere Rs30K!!!
    May be estimate of Rs12K is what they show for taxes as per the fare they have charged via auto rickshaw meter. Rest 18K, as entire Delhi knows, is generated by bilking passengers.
    And please note again that Rs30k is not the turnover, its the GROSS INCOME per month.

  6. wow,thats interesting. Maybe because of the 50% hike in fares subsequent to this article. Delhi government official website still continue to show Rs 4.50 as fare per km instead of Rs 6.50 which is in effect.The starting fare has also jumped to 19 from 10 which is probably highest in the country.Auto unions will make sure that at least in Delhi Autos will go extinct.AC cabs are now available for Rs 10 per km now which can seat 4 passengers,so more comfort at Rs 2.5 per passenger against Rs 2.2 for auto.Thus,at about 10% extra fare,one also gets at least 30% more speed,on call.

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