By David South, Development Challenges, South-South Solutions
SOUTH-SOUTH CASE STUDY
The rickshaw is the world’s oldest form of wheeled transportation and forms a significant part of India’s transport infrastructure. In large cities across Asia, 1 million three-wheeled auto-rickshaws form an important means of daily transportation and a vital source of income for their drivers. There are 8 million cycle rickshaws on the streets of India, the government says. They perform many tasks: as taxis, as couriers, as goods movers. And the Indian government promotes cycle rickshaws as a non-polluting alternative.
But rickshaw drivers in India struggle with a bad image despite being a critical component of the transport infrastructure. They work 12 to 18 hour days, are paid poorly, and are subject to frequent abuse from passengers and other drivers in the crowded and stressful streets.
Many of the men working as rickshaw drivers have left behind families in villages. Because their main home is elsewhere, many just eat, sleep and live next to the roadside.
An innovative company is taking this important service into the 21st century, and in turn boosting income and benefits for the drivers and restoring their dignity. Based in Delhi, Sammaan (www.sammaan.org), meaning dignity, has developed a sophisticated business model that offers a wide range of services to rickshaw passengers – drinks for sale, mobile phone chargers, courier collections, music, magazines/newspapers, first aid and outdoor advertising and marketing – along with professional treatment of the drivers, providing them with a uniform, identity card, bank accounts, profit sharing and insurance. The drivers pay a small maintenance fee of 10 rupees a day (US 20 cents) for renting the rickshaws. It is common in the rickshaw industry in India for drivers to rent their vehicles on a daily basis – 95 percent do so.
Drivers get the full fare from a ride, while they share the profits from the sales of goods with Sammaan (http://uk.youtube.com/watch?v=yUuP16fyTjM).
Sammaan’s founder, 27-year-old Irfan Alam, from the Indian state of Bihar, had the inspiration for his business idea when he was thirsty and riding in a rickshaw. He knew the rickshaw driver made very little money after he paid his rent for the rickshaw. And so he thought about how drivers could increase their income. Why couldn’t they sell drinks, or newspapers or mobile phone cards, he thought?
As well, since they travel more than 6 miles a day on average, why not deliver things and host advertisements on the rickshaws?
Sammaan’s idea is to fully modernize the rickshaw business: an important goal considering it makes up 30 percent of urban transport in India. By turning rickshaws into mobile advertising and marketing vehicles, income is substantially increased, while offering services builds loyalty from passengers.
In order to improve the quality of life for drivers, Sammaan also offers free evening classes for the drivers and their children.
Sammaan’s rickshaws are custom designed to allow for ample space to display the paid-for advertisements. This has proved a highly competitive way to do outdoor advertisements: it is 90 percent cheaper than advertising billboards and other campaigns. The fact the rickshaws go everywhere – from urban back streets to rural areas – makes it an effective way to reach all corners of India.
The rickshaws for the passengers are no more expensive than rickshaws with no services. And passengers are even covered by insurance if there is an accident.
Sammaan currently has hundreds of rickshaws running in Noida, Ghaziabad , Patna , Agra , Meerut , Gurgaon and Chandigarh .
The company also is planning to offer phone services in the rickshaws and the ability to pay utility bills while riding inside.
“We are also in advanced talks with Zandu Pharmaceuticals, Coca Cola and Dabur, and are hopeful of getting advertising contracts from them,” Alam told The Economist magazine. Sammaan expects to make Rs 10,000 to 15,000 (US $204 to US $307) a year from a single rickshaw.
Alam is part of a new breed in India: he is not from an established business family, but is nonetheless well educated. Many educated Indians are turning to entrepreneurship instead of becoming a corporate drone in a big company. This is being called a revolution in middle-class aspirations.
India has long-standing entrepreneurial traditions: merchant community the Marwari baniyas (http://en.wikipedia.org/wiki/Marwaris) are famed for their business acumen. But the new entrepreneurs have different aspirations and inspirations. They look to technology pioneers like Infosys (http://www.infosys.com/) and hire people based on merit and professionalism, not family connections.
The hot areas for this new breed of entrepreneur are technology, entertainment, human resources and education.
Alam’s rickshaws are made out of fiberglass for tourist towns with paved roads, and a rugged version out of iron for places with poor road conditions.
Another initiative to modernize the rickshaw business has come from India’s Centre for Scientific and Industrial Research (CSIR) (http://www.csir.res.in/), which has developed a state-of-the-art, solar powered version of the humble cycle-rickshaw.
The “soleckshaw” is a motorized cycle rickshaw that can be pedalled normally or run on a 36-volt solar battery.
The makeover includes FM radios and power points for charging mobile phones during rides.
The “soleckshaw,” which has a top speed of 15 kilometres (9.3 miles) per hour, has a sturdier frame and foam seats for up to three people.
The fully-charged solar battery will power the rickshaw for 50 to 70 kilometres (30 to 42 miles). Used batteries can be deposited at a centralized solar-powered charging station and replaced for a nominal fee.
- India’s National Entrepreneurship Network (NEN) promotes the spirit of enterprise on the country’s campuses and has a contest to pick the top 30 Indian hot start-ups. Website: http://www.nenonline.org/
- Indian venture capital firm Helion Ventures invests in start-ups. Website: www.helionvc.com
- TATA NEN Hottest Startups — India’s first ever people’s choice awards. Hottest Startups will identify, showcase and support the highest-potential young companies in India. Website: http://www.hotteststartups.in/ http://www.hotteststartups.in/shortlistedStartupsHome.do? method=fetch&businessFn=shortlistedStartupsHome
- Tukshop is a website selling auto rickshaws and tuk-tuks. Website: http://www.tukshop.biz/
- A wide range of auto rickshaws for sale. Website: http://www.auto-rickshaw.com/
- The Hybrid Tuk Tuk Battle is a competition to come up with less polluting auto rickshaws, clean up the air in Asian cities, and improve the economic conditions for auto rickshaw drivers. Website:http://hybridtuktuk.com/
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