Auto Rickshaw wallah’s strike:Govt must act equitably and not back off

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Two themes stand out in the strike organized by the auto ricksha-wallahs: one is a terrible sense of entitlement and the other is that the strike hurts nobody but the rickshawallahs themselves.  As we all know, the rickshawallahs have gone on a strike to demand an increase in the fares (from a base rate of Rs. 17 per KM to Rs.30 per KM and to protest metering and other allied regulations. On the face of it , their demand to increase fares is essentially in the nature of legitimizing an extant de facto rate structure; more often than not auto wallahs charge a rate that is determined by them and after negotiating with customers they settle on what are essentially exorbitant rates. To make a comparison, an auto wallah in Delhi will charge about 100-110 Rupees for a 10-12 KM ride but the same distance will be charged twice or even thrice by autowallahs in Kashmir. Admittedly, the Delhi or Mumbai autowallahs – because of the scope, intensity and size of the market- can play the volume game and make more money but this does not mean that autowallahs fleece consumers in Kashmir or elsewhere.  Moreover, haggling with the autowallahs is a pain in the neck and in terms of the power dynamic between an autowallah and a person hailing an auto, the power shifts to the autowallah. Such is their complacency and smugness that if they feel that a potential consumer of their service is paying them 10 rupees less, they will forego the chance of making 50 or 100 rupees over a 10 rupee concession demanded by the consumer.
The autowallahs then operate under a terrible sense of entitlement: because the conditions in Kashmir are not too sanguine, society owes them a living, appears to their operating assumption.
In terms of their strike, the autowallahs are hurting only themselves. People in Kashmir use the services of autowallahs mostly under exceptional circumstances. An auto ride is not something most Kashmiris take. And nowadays many people own motor cars; public transport, warts and all, is not too bad either. Given these factors, who do the autowallahs hurt by striking? Themselves is the obvious answer.
Despite the irrationality of the autowallahs strike, the question is, is the Government right in sticking to its position and stance?
Yes. Absolutely.
No government should be hostage to either sectional interests or interest groups. The Government as an institution, has to take a holistic and a broader view of issues- views that incorporate the well being of society, provision of public goods and incorporating the interests of all societal stakeholders. In the case of the autowallahs versus society and government, the government axiomatically has to consider the genuine and legitimate interests of all groups and stakeholders. Specifically, this means regulation that redounds to the benefit of all stakeholders.
The regulation , to use economics jargon, should be non zero sum and Pareto efficient meaning no side or group should emerge as a winner; the regulatory solution should be win win and crafted in such a way that in which it is impossible to make any one individual better off without making at least one individual worse off. Specifically, it would mean devising a regulatory framework wherein autowallahs are not hard done by. They should be able to make a decent profit; not an extortionate one and at the same time consumers must not be at the receiving end and not fleeced.  This would also mean strict monitoring of regulations including meters and what have you. If the autowallahs resist this and stick to their irrationality, the government must not and should not back off. It should stick to its stance , adopt and equitable and efficient regulatory framework and not pander to what amounts to coercive, strong arm tactics.

 

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