Tuesday, February 26, 2013

Business Model of a Rickshaw-Garage

Two and a half months after quitting the ‘job’, I wasn't still fully aware of how this whole Rickshaw-Lending System worked. On what faith does a garage-owner lends his rickshaw, permanently  to a guy who is forced to take up the detested job because he badly needs money to make his both ends meet and yet be confident that he will daily pay the rent and not sell it off and run away with the money. After all, there is no GPS on a rickshaw!

So last week, when I met with the owner of the garage where I rented my first rickshaw – Raja Rickshaw Garage – I decided to satiate my curiosity.

His reply had the flavor of a Management Guru’s discourse sans the jargons, finesse and accent of course! He said that he never lends rickshaw to a complete stranger. The guy needs to be a relative/acquaintance of an existing rickshaw-puller or someone he already knows. Just like Banks, they also work on Referral System. And just like banks ask for guarantor(s) before sanctioning a loan, so do they (though, not always)!

“But I was a complete stranger so why did you lend me a rickshaw?” I interjected. “We kept your Driving Licence as security, didn't we?” he retorted. All I could do was nod!

“But how do you retrieve the rickshaw or recover the cost, if, in the worst case scenario, someone succeeds in duping you?”
“If one runs away with the rickshaw, his guarantor has to pay back.”
As he was unraveling, I was getting even more amazed at how this system works without any legal framework.

“But a rickshaw costs somewhere around 8-9 thousand, how the guarantor will pay that amount when he himself finds it hard to pay back his own rent?”
“We know that, and that’s why he doesn't have to pay in lump-sum. He pays some amount daily, say 40-50 rupees along with his rent. And the amount depends upon the condition of the rickshaw stolen, gaurantor’s economical condition and our mutual understanding. So it’s never the full amount.”
“So how many rickshaws do you lose this way in a year?”
“Around 20-30.” (he was just saying ‘yes-yes’ to any figure I said but said louder yeses to the figure 20-30, so I assume that to be closer approximation!)
“But do you ever recover your stolen rickshaw b'cuz it’s really easy to paint, renovate and then sell it off to a distant garage owner.”
“We do, 50% of the times!”
I was so astonished at his confident reply. Just look at the probability he quoted!

“But how,” I asked like a kid eager to know a magic trick.
“Here comes the role of dalaals or informers.”
Are you kidding me? Informers, in this sector? Well, Carry on. I am all ears.
“These dalaals constantly monitor out rickshaw’s moving around in the area and when they notice our rickshaw plying in some distant place, they alert us.”
“But the rickshaw has been painted and modified!”
Doesn’t matter!!! A dalaal identifies”
(I don’t believe you but go ahead!)

“Also, since we are in the business for so long, almost all the garage owners in the adjoining area and a lot of owners far away know us and when they spot our rickshaw, they inform us. This network builds over time.”
It’s like the Star Alliance in the Aviation sector, where all the major airlines cooperate with each other to minimize losses on logistics and maximize profit.

Talking of Profit, exactly how much does a rickshaw-garage owner earns?
Let’s assume you are a garage owner. Now one rickshaw pays you Rs 50 in a day and if you are an average established Garage owner, your fleet could be as big as 100-200 rickshaws. Which means 5-10K in a day, 1.5-3 Lacs per month or 18-36 lacs per annum. That’s the scale of earning!

Are you suddenly seeing the worthlessness of your MBA degree from IIM? It’s just the beginning of despair because if you are a superstar garage owner, you could very well be sitting over an armada of 700-800 rickshaws. Please do the maths. OK don’t do it. There’s no point making yourself miserable.

Prima facie, a rickshaw garage looks a very lucrative business; so lucrative that you want to take a plunge in it right away. I used to make such off the hand calculations for rickshaw-wallas as well but I only released how tough it is to save even 100 Rupees a day let alone 500 or more. But many of my friends do save that much. As Mr Robert Schuller has rightly said, “tough time never last, but tough people do.”

But undoubtedly, it’s easier to start a rickshaw-garage business these days in Delhi than probably few years back. In Feb 2010, Delhi High Court declared impounding of Cycle-rickshaws by police or Municipal Authorities as illegal and virtually abolishing the need to have a license to pull a rickshaw. This Decision was upheld by the Supreme Court of India in April, 2012.

Earlier lakhs of rickshaws were confiscated every year and released only after extorting bribes; not any longer. “This has meant saving at least Rs.200 crore a year for rickshaw owners,” says Madhu Kishwar, the lady behind the NGO Manushi, which is behind the Court’s verdict.

So from a Garage owner’s perspective, entry barriers have been lowered. Because, if a rickshaw gets impounded, it’s the owner who coughs up the bribe to get it released and in the worst case scenario, if the rickshaw gets scrapped, that’s his loss. Although it depends how mafia-like he is and how much he can put the blame on the rickshaw-puller and extract a part of the moolah lost.

These Garage owners act as 'Banks' and 'lockers' as well for the rickshaw-wallas. My friends used to submit their daily earning with the owner in good faith and ask for it when they needed it. Of course they don’t get any interest on it.

The first time when I stayed at the garage overnight, they advised me to submit my phone at the small grocery shop they run lest it slips out of my pocket while I was sound asleep. I did. The next morning, the son of the garage owner was asking me, “why have you clicked photos of random signboards and who was that girl with you?” Apparently, I forgot to lock my phone!

There is no ledger that they maintain and there is no PHC to audit it. It’s all trust based accounting. Everything is maintained in a seemingly haphazard manner in a dirty notebook but makes perfect sense to them. But it has one drawback. They precisely know how much a rickshaw-walla is earning daily. Probably one of the reasons why they so easily raised the daily rent from Rs 40 to Rs 50!

But probably the toughest part of the business is to deal with rickshaw-wallas because most of them are not very educated and a lot of them are addicted to either hooch or ganja. You have to understand the psychology of your every rickshaw-puller and customize your approach.

You become too lenient with them and they take you for a ride, default on the rent, keep the rickshaw poorly maintained and if you become too strict (or abusive) with them you never know what extreme step they may take – junk or sell off the rickshaw, abuse you back or maybe even hit you. Going in their area to collect daily rent is even more risky for above mentioned reasons.

So if you have enough clout to encroach a road/pavement/govt. land and can arrange a mechanic (which is easy) and possess qualities of a psychologist, a lucrative business is awaiting you. It’s time to be an Entrepreneur!

Wednesday, February 20, 2013

Karmbhoomi Nostalgia - Revisiting North Campus

They say nothing can stop an idea whose time has come. Well, the idea to revist my Karmbhoomi (workplace is such an astronomically weak word comparatively!) was brewing in my mind for months but it's time came only yesterday.

It was International Students’ Cultural Fest (Arcus Iris 2013!) in the Girl’s Hostel at Indra Vihar on 19th to which I was invited by my friend. To put it succinctly, the fest was so-so and highly overpriced. Cumm'on, for a Delhi University Fest, 280 rupees is humongous! (of course, you can always argue that you won't mind paying even double to get only an entry in the girl's hostel, that too International, at night!)

The fest lasted till 11:30 and catching the last metro was out of question so I crashed at my friend's place in International Students House (ISH)! They don’t even ask me to sign the visitor’s register these days; my African looks also have advantages at certain places, you see!

Yesterday’s party, inadvertently  gave me this amazing opportunity to visit my erstwhile workplace again as an outsider of which I was an element just two months back. At 8 AM, While heading towards Gwyer hall for breakfast, I passed across the Delhi University Metro Station and found myself surrounded by profound memories, bright smiles and gleaming eyes; and also bombarded by the questions, “boho dino baad dikhe?” (Long time no see!) and "rickshaw chchod diya kya?" (have you left pulling rickshaw?) etc.

I stood there, right outside Gate no.4 for at least 45 minutes if not more and observed the periodic flood of students flowing out of it and getting trifurcated  – the left one flowing straight to Chchatra marg (a lot of students prefer walking), the right one into the Campus Special DTC bus (which wasn't abiding by the nationwide strike) and the middle one flowing into the Rickshaws. Of course there were some leakages to other buses, University Road and across the Ring Road!

I also observed nostalgically the ‘routines’ of my friends (and ex-colleagues) to placate their prospective customers in order to get their ‘bowl’ filled with the ‘stream water’ few minutes earlier than it would fill up naturally. After all, time is money for them.

Two months back, even I used to stand on those very same black marble stairs along with them and used to filter customers out of the crowd by reading the questions in their eyes and haste in their strides and used to throw random names likes ‘Kamla Nagar’, ‘Hindu’, ‘Miranda’ etc at them. However, I must confess that my search results were never as accurate as my friends’. I was probably Bing while they were all Googles!

When the hunger pangs overpowered nostalgia, I bade adieu to my friends – who for a moment took their eyes off the students to shake hands with me, the Metro Security Guard, and the Campus special DTC bus conductor and headed for Gwyer Hall where I would meet my best friend – Sanjay Turi, breakfast was secondary.

But when I reached there, I found only a single Rickshaw-walla whom I didn’t know. I was heartbroken.  Dejectedly, I went into the canteen and munched an Aloo-parantha at Panditji’s legendary canteen. The Parantha tasted still the same or may be since I was having them after so long, even tastier!

When I came out of the canteen the 'autumn' was over, 'spring' had arrived. Sanjay was there, so was Nageshwar and also my oldest friend – the 76 year old rickshaw puller whom I call Baba! Sanjay was chatting with the other two while sitting carelessly on his rickshaw when I emerged out of the canteen gates. A rickshaw-walla instinctively turns his head towards any human activity that happens within his field of vision even if he is not looking there actively and so did he! The moment he saw me, he exclaimed – “Gaurav bhai aap?” with a big surprise and an even bigger smile!

Though he is several years elder to me and despite repeated ‘warnings’, he refuses to be less formal than this. Anyways, we had our ‘Bharat-milaap’ moment, asked about each others’ well-being but soon he assumed my elder brother’s role. “So did you get a job somewhere?”, “this roaming around won’t serve you any purpose” were some of his questions and suggestions. His concern for me is heart-warming. We also talked about some other stuff before we were cut short by a student, apparently running late for his class. Sanjay responded to the call of duty. I couldn't meet him again in the day.

At the canteen gate, I met another rickshaw-friend, high on 'spirits', who dropped me at Law Faculty for just Rs 10; he refused to take more than that. From there, I walked till Hindu college meeting scores of Rickshaw-friends standing in the serpentine queues in front of St. Stephens and Hindu college. I should be publicly chastised for not being able to remember the names of such wonderful people who have their time, smiles and good wishes for me despite the fact that I have never done anything exceptional for them.

At Hindu college, I came to know that Dr Subramanyan Swamy, the President of Janta Party would be holding a seminar on “Policy Paralysis & corruption”. What else can a journalist ask for? But I still had one hour and so I went to meet the owner of the garage from where I rented my very first rickshaw – Raja Garage. Unfortunately he was on leave but his younger brother was there.

After the routine questions, the request of a friend of mine flashed my mind. She is a painter and expressed her interest to paint the back of rickshaws with art capturing the present zeitgeist – female foeticide, women equality, girl education and stuff like that. I shared her idea and expected him to agree and I wasn't expecting too much!

I asked him one more thing, a question that fascinated me all this while but never asked hitherto – how do you ensure that a person – especially the one who doesn't come back and park the rickshaw at the garage daily – doesn't run away or sell off the rickshaw? And if one does that in the worst case scenario, how do you retrieve the rickshaw or recover the cost, if ever? However, his answer was quite detailed and I think I should deal it in a separate blogpost.

I met the owner of my second garage as well – Gokul. He too enlightened me on his business model and also gave an NOC for the ‘Rickshaw-backside art’! Saying my goodbyes, I left the place, bought a newspaper, drank vegetable juice and took a rickshaw for Hindu college yet again.

Must say that Dr. Swamy is a great orator and entertainer. Though I didn't agree with a lot of things he spoke, I couldn't help but laugh and clap at his wit, sarcastic humor and clever jibes at the Gandhi Family, PM Manmohan Singh, A Raja and St. Stephens college!

The session was over and so was my extended stay at Delhi University. But one last thing was remaining – keema paranthas at Delhi School of Economics' canteen. I was told that they are awesome but never really got the chance to try them in those three months as a rickshaw-walla. In fact, despite working in the campus for decades, hardly any of friends has ever entered a college!

But sadly, I was misinformed. There was no keema parantha there and the next best thing available was Mutton Dosa for Rs 35! I had exactly 34 rupees in my pocket but the canteen-walla was generous enough to give me 1 rupee discount. I devoured it! Worth the money, certainly worth a try however not exceptionally good.

With not a single rupee left in my pocket I walked till the metro station. This artificial ‘bankruptcy’ acted as the ‘finishing touch’ to my nostalgic trip to North Campus. I recalled those days when I had to pull the rickshaw for a good 1-2 hours empty stomach to even earn enough for a modest breakfast. (it wasn't a regular feature though, just in case you are thinking I am trying to magnify my misery-ful experience)! I had my Debit card in my bag with a high probability of having few hundreds if not thousands in it but I chose not to withdraw any cash to savor that carefree lightness for as long as possible!