Autowallahs

Pffttt!! This is so awesome, being a business grad. makes me appreciate the way people think and do their daily business. The fact that I am getting robbed in broad daylight is irrelevant.

I moved to Hyderabad in the December of ’06, and I barely knew my way around. I thought myself very fortunate that the Autorickshaw stand was nearby and my friend knew some of them. Naturally, they operated on a fixed price basis. That sucked, since I knew they had a nice fat operating margin of 15%. I paid, I fell to the cartel’s ways … and soon everyone of them was earning supernormal profits at my expense.

This went on for 18 months, then the government of India hiked the petrol rates and inflation peaked to more than 11%. What that essentially meant for autos, was higher meter rates. Since what I was paying them was higher than the meter rates, I kept on paying the same amount. The smart buggers that they are, decided to hike up my fixed rates as well … upon this, I was quick to point out that my rate should not increase, since their costs are not increasing by a significant amount (Rs. 5 per litre, an auto which gives an avg of 24 kmpl and I have to go 8 km, which means an additional cost of Rs. 1.66).

For a couple of days, this worked. Today, they told me, that I am not profitable enough for them, and that their opportunity cost has gone up!! Indicating, that while they are dropping me off at my office at a normal profit level, they could be earning higher profits somewhere else as well. If only I had so much business sense when I was a b-schooler 🙂

A related rant from Hypnos is here.

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