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To
The Honourable Chief Minister of Karnataka
Bengaluru
Dear Sir,
One of your recent decisions make me wonder …”If a person is running a Mandi and allows farmers to display his wares and bring together buyers and sellers, does he become a farmer?”
Kindly clarify.
Why Do I think so?
The Karnataka Transport Department has issued an order stating that Uber, Ola Auto service has to be stopped because they are charging a minimum of Rs 100/- as against the Government fixed minimum of Rs 30/-
Mr Sriramulu the Minister has threatened that he has ordered his officials to seize autos plying in defiance of the order. This gives a free hand to the police to stop every auto and demand information from the auto driver and increase his collections.
I would like to categorically state that your move to block Uber/Ola auto is not in the interest of the public nor in the interest of Auto drivers. It will make only a marginal dent to the Cab aggregators unless you are arm twisting them for contributions to BJP for fighting the BBMP elections.
I am a staunch supporter of BJP and Mr Modi but is compelled to call out the decision of the transport department as not in the interest of the citizens of Bengaluru of which I am also a part.
I request you to kindly give a thought to the basic nature of business which the “Aggregators” are in. The” business of aggregation” cannot be equated to the business itself which it integrates. Karnataka Government has already made this mistake when they last made a law to treat Uber and Ola as “Taxi Operators”. I had pointe out at that time itself that this was a wrong decision. unfortunately, the companies instead of fighting it legally went for some compromised solution and accepted the classification.
Now is a time for correcting this bad decision if your Government can think in terms of understanding the business.
The business chain always consists of different layers of service from producers to consumers. There are farm brokers, transporters, Mandi Merchants, Wholesalers, Retailers etc all of whom have a role to play. As long as they collect remuneration commensurate with the value addition they bring to the business, each is entitled to their profits.
Cab aggregators fall into this category of “Intermediaries” whose job is to bring together the cab operators with the consumers on an online platform and make it easy for the service to be consumed.
They work for their service charges and the benefit for the produce (In this case the transport service by a car or an auto given to the consumer) goes to the producer (Driver/auto or car owner). The aggregator also acts as the collector of money on behalf of the driver and passes it onto the driver. (Ideally, the receipt of money can be split straight away on and credited to the driver’s account if required).
If the Cab aggregator is cheating on the driver and exploiting him with excessive commission, it has to be checked. But a reasonable commission should be allowed. (I consider 15% as reasonable and not 30% which the Uber/Ola are now charging).
The system brings transparency to the collection system and all cab/auto owners would be happy that the drivers cannot cheat them on the total collection of the day.
At the same time the consumer is happy that he need not bargain with the driver which is the biggest headache which all Bengaluru Consumers are aware and were relived of with the introduction of Uber/Ola services.
The auto drivers who were demanding their own price in excess of the meter may be unhappy that they now have to ply according to the fixed rates . But many honourable auto drivers would be happy with the system which gives them a fair return without the botheration of waiting for a customer and demanding double the meter, refuse plying to a stated destination, get abuses constantly. They can operate intermittently from their home, respond only to calls on the App, switch off the App when they want to spend time with their family and have a good work-life balance.
The most important aspect of this service is that consumers need not go out into the street to look for the auto, wait and keep waving at the moving autos. In case there is any luggage to carry, there is to send an errand boy to go and fetch an auto to take them to the railway station.
I am sure that you and your family must have experienced these difficulties when you were younger and before you became the Chief Minister.
The current decision will now put Bangalore consumers of auto service back to the 70’s and 80’s and make it extremely difficult to commute. Senior citizens living alone are the most affected since they cannot get the autos to their doors.
You are therefore snatching away this door step auto service.
Now coming to the allegation of collection of Rs 100 instead of Rs 30. If only Rs 30 is charged, then do you expect the aggregator to charge no fees?
If you think the commission of Rs 70 is unreasonable and it ought to be not more than Rs 20, I may agree with you just as the 30% commission charged by Uber/Ola is considered double the reasonable figure of 15%.
You have the right to regulate this and through the transparent system of money flow that occurs ensure that the aggregators follow the rule of 15% commission with a minimum of Rs 20/-. You can also either disallow the “Surge charges” or more appropriately allow it with a higher rate of commission of say 25% at level 1 and 30% at level 2 depending on a criteria to determine the level 1 and level 2 situations. If the available supply is too low and below a critical level, surge commission can be made even higher.
Instead of regulating the pricing in such a manner that the driver gets a reasonable return on his efforts and the consumer gets a reasonable price, you are denying them of the service itself.
This will be creating a backlash on your Government and the first signs should be in the BBMP elections when BJP is going to lose heavily.
I therefore urge you to immediately suspend the decision of the Transport ministry and form a “Pricing Committee” for aggregators to fix a more appropriate price structure as indicated above.
The Government now have access to the Open Network for Digital Commerce (ONDC) as an available platform where all the auto drivers can register themselves and ONDC can fix a fair commission for itself and give an outlet for the autos. This will also bring down the competitors Uber and Ola to a more reasonable price structure. If required I thinks you can also use MYn which otherwise would be a disastrous failure. You can also request philanthropic organizations like Tata Neu to start cab aggregation platform (If you donot insist that they will be considered Taxi operators but only Intermediaries under ITA 2000), they and many more technology companies may oblige. Even Amazon would be happy to start a channel for autos.
If you take a decision in this direction, it will bring revolution to the Bengaluru transport system.
I think Mr Tejasvi Surya brought a problem to your attention but your solution was worse than the problem. Even Mr Tejasvi Surya should accept the proposal made above and you can show your statesmanship in retracting the 2014 order of equating the Aggregation business to Taxi business which was bad in law.
If the order is properly challenged by the operators in a Court of law they have a fair chance of winning in their argument as it is discriminatory on the city transport system and spares all other types of intermediary service providers being taxed like the end producer.
Please think over and act wisely to preserve the BJP electoral chances in the coming elections.
Naavi
