Taxi, auto unions fume at fare war in Bengaluru

BENGALURU: New-age cab operators have had consumers drooling with fares cheaper than those of autorickshaws. As in many other parts of the world, a backlash from traditional oper ators is building up.
The Bangalore Tourist Taxi-Owners' Association (BTTOA), Adarsh Autorickshaw Drivers' Union and Karnataka Maxi-Cab Owners' Association are meeting the city transport commissioner on Wednesday to discuss certain practices of the new operators which they allege go against the law.
"Some cab operators are using state and all-India per mit vehicles to ply point-topoint taxis. That's against the Motor Vehicles Act, 1988. The Karnataka government has set a standard fare of Rs 19.50 per km for radio taxis, but Ola, Uber and TaxiForSure are offering rock-bottom fares, subsidizing customers with the tonnes of funding they have received," said L Radhakrishna Holla, general secretary of BTTOA, which runs 45,000 cabs in the city. But Raghunandhan G, cofounder of TaxiForSure, countered, saying Rs 19.50 per km was only a ceiling, and an all-India permit did not restrict point-to-point city services.
Uber is backed by Google, Ola last month received $210 million in funding from Japan's Softbank, and TaxiForSure has raised raised $50 million from VC firms Accel Partners, Helion Ventures and others. From November 1, TaxiForSure lowered its base fare to Rs 49 for 4 km, and thereafter Rs 14 a km, making it cheaper than an autorickshaw up to a certain distance.
Uber has been offering promotional discounts as high as 45%. A customer who used an UberX (the lower-end option) late in the night from MG Road to Malleswaram, a distance of 6.26 km, paid a mere Rs 87.45. An auto would have cost her Rs 130, including the night-time charge.
Taxis of The Airport Taxi Service parked at Kempegowda International Airport (KIA), in Bengaluru.
Pranay Jivrajka, VP (operations) at Ola, said the company was able to achieve high economies of scale through cutting-edge technology, and that was what resulted in better fares for customers and increased revenue for drivers. Holla said the economics would not justify the fares of these operators. "If a singleowner-operated Innova taxi driver has to pay Rs 30,000 EMI, fuel bills and take home a decent salary, he has to have a monthly billing of Rs 70,000.
But they won't get that if fares drop so drastically," he said.
But Raghunandhan noted that the total cost of running a cab - including fuel, and wear and tear - was Rs 3.50 per km. The rest of it is the driver salary and the operator's commission. Also, given the ease with which cabs can now be booked through mobile phones, the number of trips a cab does in a day has sharply increased.
That significantly reduces the time that a cab remains empty, and increases the cab's earnings.
Reacting to the taxi union protests, Raghunandhan said, "They should come and join us. They understand vehicles and how to manage drivers, while we underst and the technology and customer acquisition."