Team-BHP - Radio cabs at Rs 10/km soon in Delhi

I just read this article on radio cabs, and Delhi government is looking at an alternative to autos, but just as cheap.

Radio cabs at Rs 10/km soon in Delhi, govt invites tender-Automobiles-Auto-News By Industry-News-The Economic Times

NEW DELHI: THE Delhi government on Tuesday invited private firms and individuals to launch radio cab services at Rs 10 a km, easing the pain on

commuters who will have to dig deeper to travel in an auto or taxi as fares are expected to rise 40% from Wednesday.

The government has also relaxed rules to allow small cars such as Maruti Alto and Tata Nano to ply as taxis in the city.

“We have already received applications for hundred no-frill cabs and are expecting to have a fleet of over 3,000-4,000 such cabs before the Commonwealth Games,” Delhi transport commissioner RK Verma said.

The charges for the new non-airconditioned cab service are already being billed as the same as those of an autorickshaw, for which the basic fare is said to have been fixed at Rs 20 for the first 2 kms. For each subsequent kilometre, the fare will be Rs 6-6.50 as against Rs 4.50 now. Likewise, taxi fares are expected to be increased from Rs 15 to Rs 20 for the first km and from Rs 8.50 to Rs 12 for every subsequent kilometre from Wednesday.

For the new cab service, private operators can have their own customer service centres while individual or small cab operators have the option to link up with a centralised call centre operated by the state government.

The transport department is yet to fix a limit on the number of licences to be issued for the new radio cabs. Only 55,000 autorickshaws are allowed to ply on Delhi roads.

The government has also allowed operators to use smaller 700 cc cars as cabs. Existing cabs fall in the 1,000 cc capacity.

The automobile industry has long been lobbying with the government to relax norms so that small cars can run as cabs. To date, most radio cab operators have been using Maruti Esteem and Tata Motors’ Indica in the city. Ambassadors and utility vehicles too are seen playing as taxis.

“There is wider availability of cars now and we are neutral to brands. We just want to provide more options to customers,” said Mr Verma.

My 2 paisa:
If this goes through, taxi services will now be more organized, and will directly hit the unorganized sector (taxi walas charge as per their mood, that was my experience a few years ago). And I guess the road space occupied by a Nano is nearly the same as the space occupied by an existing auto, so the roads wont get any more crowded.

CNG could be mandatory in the new taxis, so we might get to see factory fitted CNG Nanos.

At the price point of 10 Rs / km and the overhead costs of having a central call center, operator margins may get squeezed. Someone conversant with the industry could throw some light on this.

The Delhi government should consider extending the taxi services to the neighboring states as well, with more people moving around to Gurgaon / Faridabad / Noida.

Aroop