The curious case of Gopal Rai PDF Print E-mail
Thursday, 16 June 2016 03:58
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While opposing AAP’s app-based bus service, Delhi’s LG must read what Arun Jaitely has to say on it

It is, of course, a delicious irony that after his brush with app-based cabs like Ola and Uber, Delhi CM Arvind Kejriwal should want a similar service for top-end buses — but let’s applaud him for being open to good ideas


Though Delhi chief minister Arvind Kejriwal has had many brushes with taxi cab aggregators like Ola and Uber on their surge pricing and even threatened to seize their cabs for this—clearly he wasn’t as concerned about the unofficial surge by his favourite autowallahs—it has to be said to his credit that he wants to push an app-based aggregator model for premium bus services, suggesting that he too agrees the Olas and Ubers have made a very big difference as far as public transport in the capital is concerned.

That, in fact, is at the heart of his jung—pardon the pun—with Delhi’s lieutenant governor (L-G) Najeeb Jung, as a result of which transport minister Gopal Rai has put in his papers and has been questioned by officials of the anti-corruption bureau that reports directly to the L-G.

This is not the time or place to get into details of the unseemly fights between Jung and Kejriwal that seem to have become an everyday affair now, but in this case at least, it is clear the lieutenant governor has been misled by his officials since the app-based bus service is not just a good idea in terms of what it will do for passenger comfort in the capital, it is a crucial reform that all state transport undertakings across the country must adopt at the earliest.

Briefly, though this newspaper has been critical of Kejriwal’s odd-even scheme on grounds it was ill-conceived and badly implemented, there can be little doubt that any policy that gets more cars off the roads without unduly inconveniencing citizens is a good one, not just in terms of what it does for pollution but in terms of what it does for energy use. The metro is a very good addition to Delhi’s public transport but even its biggest supporters will agree it is overcrowded. Taxi-sharing of the sort that Ola/Uber do is a cheaper alternative to booking your own cab and car pooling of the sort done by Shuttl or BlaBlaCar is another, assuming you don’t want to take buses.

But what if you had an air-conditioned bus that stopped not far from your house and dropped you off not far from your office at a fixed time? This, of course, is nothing but a variant of the chartered bus that all office-goers are familiar with, but the advantage of doing it through an app is that it is more organised, the booking can be done on your phone, maybe even alerts/information of various type can be sent to your phone directly.

That, in a nutshell, is what the Delhi government worked on, an app linked to an aggregator whose job was to link people with buses and ensure a safe passage. The buses would run on a fixed schedule, the seats would be numbered, no extra passengers would be taken on board, the bus would have to run even if there wasn’t a minimum number on a route, fines were to be imposed if the conditions weren’t met, refunds to travelers … all of this was to be enforced through a hefty Rs 25 lakh bank guarantee (for an aggregator running up to 100 buses). There we, needless to say, some Kejriwalesque terms like the possibility of a fare cap to prevent predatory pricing, but on the whole the scheme was a welcome addition to Delhi’s public transport system.

Jung, it appears, has several problems with the scheme, the first of which is that the notification says “the Lieutenant Governor … is pleased to notify …” But, the L-G says, I’ve never even seen the file. While this is obvious immaturity on the part of Kejriwal’s officers since the order didn’t necessarily have to be in the L-G’s name, the fact is that all central government contracts are signed in the name of the president—imagine the chaos if each such order had to be ratified by the president.

There is also an allegation of corruption, that the app scheme benefits one particular aggregator. Since there is nothing in the order that suggests the scheme is limited to one aggregator, it is difficult to figure out what this allegation is based upon—if it is the minimum of 50 buses that the notification says an aggregator must have that is causing the concern, this can be reduced if doing so brings in more competition.

What is odder is Jung’s view that the scheme is bad because the officials of the transport department didn’t like it. Since Delhi’s bus service is a big monopoly—and public transport an oligopoly till private taxis came along—it is obvious the transport department would frown upon any scheme that seeks to break this power that the licensing authorities have. And, in any case, once a Cabinet—in this case, the Delhi Cabinet—decision is taken, it is irrelevant whether line departments objected to it.

The L-G is right to object to there not being enough public consultation on the scheme—that’s easily fixed—but on the wrong track when he says the permission given to aggregators under sub-section 3 of Section 66 has been incorrectly used. Under clause (n) of sub-section 3, the government can waive the need for a special permit from the state transport authority. According to the L-G, clause (n) has to be read in conjunction with clause (m) (yup, bureaucracy!) which says this waiver can be given only in extraordinary circumstances—like an earthquake or a flood—and that such provisions cannot be invoked for an indefinite period of time.

But surely the L-G realises that the law is meant to serve the needs of Delhi’s population and that the needs of the citizens are that more buses ply. Indeed, while the experience of telecom and airlines clearly demonstrates just how competition lowers tariffs and improves service quality, one of the issues flagged by the L-G is that DTC will be adversely affected since the aggregators can decide on which routes their premium buses will ply—since some will be ones on which DTC also plies, the argument is, this will hit its profitability.

As a career bureaucrat, it is obvious the L-G will be more impressed by arguments made by the political class, never mind that it is probably more useful to hear the views of top-notch economists in areas like pricing, markets and competition. Which is why, he would do well to read a part of finance ministerArun Jaitley’s budget speech this year that most missed. Passenger traffic, Jaitley said, “is a totally unreformed sector which suffers from several impediments. Abolition of permit-raj will be our medium term goal. Government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment … Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms. The major benefits of this game changing initiative will be provision of more efficient public transport facilities, greater public convenience, new investment in this moribund sector …”. To the extent Kejriwal is simply implementing the central government’s reform goal, as a nominee of the centre, the L-G and the central government should both welcome the app-model for breaking DTC’s inefficient monopoly.

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