Capitalizing on India's Auto-Rickshaw Sector

India's Bajaj Auto company introduces an ultracheap small car focused on the country's rickshaw industry. Meanwhile, an unrelated study finds that the unorganized auto-rickshaw sector presents a huge business opportunity.
January 6, 2012, 11am PST | Chris Steins | @urbaninsight
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India's Bajaj Auto, known for making motorcycles and rickshaws, calls it's newest product, the RE60, a "four wheeler", which is expected to cost around $2,750, or about $500 more than a traditional rickshaw.

"Executives say they have no plans to market it to average consumers. Instead, they are aiming for drivers of rickshaws, which are powered by motorcycle engines and operate as short-distance taxis in India. The RE60 offers features not found on current rickshaw models, including seat belts, doors and a hard top. It will have windows, although ones that fold out rather than roll down," write authora Vikas Bajaj and Sruthi Gottipati.

Auto-rickshaw services in Indian cities are predominantly unorganized, where services are provided by individual owners and operators competing against each other for the passenger market. This structure, coupled with an improper governance framework, has created significant problems for both drivers and passengers, and it has resulted in a variety of social, economic and environmental problems. A new study by EMBARQ India recommends implementation of a system similar to the taxi industry in the United States.

Thanks to Jeffrey Riecke

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Published on Tuesday, January 3, 2012 in The New York Times
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