Auto-rickshaws have become a very critical part of the urban transport system in India, so much so that they are now an identifying part of the Indian culture. They have embedded themselves as a life force for the Indians who want to dodge the traffic-heavy roads and overcrowded buses but want a cheaper public transport than private cabs. Introduced in India in the 19th century as a three-wheeled motorized vehicle that could navigate small spaces with agility, the auto rickshaw has lived up to its original purpose of affordable last-mile connectivity and has become ingrained in the very fabric of the public transport system.
The popularity of three-wheelers is not just on the consumer side, though. Its convenience is matchless- no doubt, but it is also an increasingly popular means of professional investment in the informal sector.
Case in point: Three-wheeler’ sales increased by 10.27% in April-March 2019 over the same period last year and within the three-wheelers, passenger carrier sales registered a growth of 10.62%.
Clearly, this mode of transport seems to be keeping everyone happy on the otherwise angst-ridden roads of metropolitan cities.
However, do you know how much it costs for an auto-rickshaw to get from a manufacturer to plying on the roads for passengers? Let us have a look at the estimated breakdown.
Cost of a Three Wheeler (Auto Rickshaw)
Let us look at the costs across major brands and popular models:
Piaggio: Piaggio has brought a variety of different body styles amongst three-wheelers in India. The LPG model can cost around Rs 1.95 lakh. The Piaggio Ape Xtra DLX Diesel Auto Rickshaw is priced at Rs.1.75 lakh.
Bajaj: Bajaj Auto is the world’s largest auto rickshaw manufacturer company and part of the Bajaj Group. The model you see the most on roads can be bought within Rs 1.5 lakh.
Mahindra and Mahindra: Mahindra Alfa Passenger, the self-proclaimed ‘Badshah’ of 3-wheelers gives great mileage, and style with a warranty of 24 months at a price of roughly around Rs1.52 lakh.
TVS: TVS is also a strong presence in the market with its TVS King auto priced at Rs 1.65 lakh.
Permit, insurance and other registration fees
Apart from the main investment cost, there are ancillary costs related to additional fittings, and the legal side: a permit costs Rs 375 on paper, but allegedly takes Rs 1000 more if it is to be procured the same day. Similarly, insurance for the vehicle is another imperative cost, coming a little over Rs 5,000. Conducting a test of a vehicle for grant or renewal of a certificate of fitness incurs a cost of Rs 600 for a three-wheeler. One encouraging recent development was the passing of a new government rule that allows taxi and auto drivers to use their private license. This means they no longer have to apply and register for a commercial license separately.
Are the returns worth it? – Cost of Operation
While these differ from one state or Union Territory to another, let us consider Delhi as an example:
The operational earnings include Rs 25/- for the first fall of 2 Kilometer (upon downing the meter) and thereafter Rs. 8/- per Kilometer for every additional Kilometer. The provision of night charges means you get 25% of the fare, over and above the fare if you are driving passengers during 11:00 PM to 5:00 AM. Apart from that, the waiting charges are subject to a minimum of 15 minutes stay at Rs 30 per hour.
On the other hand, Chennai’s government has established fixed auto fares, which when compared to the operational cost of Rs 3.5 per kilometre seems more than a fair deal.
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