Strategic Insights from an Auto Driver in Delhi

Well I always wondered about the application of the MBA classroom learnings on ground level. Though I never questioned the authenticity but always felt a vacuum on how to connect them with trivial and small sectors beyond classroom.

I had an interesting experience when I had to head to Hazrat Nizamaudin Station, New Delhi to board train and live the last 2 months of my campus life. As planned I had thought of booking Uber or Ola as most of us do these days as compared to hiring an auto few years back. Suddenly, out of nowhere my phone wasn’t able to connect to internet and I decided to board an auto.

The driver was an old man, somewhere in his late-fifties and to my surprise asked a reasonable fare and without wasting a second I boarded the auto. During the journey of 30 minutes I asked him how Ola and Uber have impacted him and the auto-drivers overall. In my opinion, his answer held some gravity specially for the upcoming MBAs (like me) and therefore thought of sharing.

· He admitted that he had lost more than 50 percent of his business to Ola and Uber. He was driving auto in Delhi for 35 years, from an era of no competition at all to present day where Ola and Uber stand barely few seconds away. He said, I have given up long distances routes and operate only within 10-15 km from Connaught Place. Reason, I know I cannot compete with Ola & Uber specially in summers hence I have to refocus and rethink where a commuter would prefer auto and not a cab.

Classroom Funda: Competitor analysis- Beware of competitors’ strength and agile enough to recognize how we can add value even if that means giving up on conventional business model (going beyond 15kms in this case).

· Also, till 2010 he earned so much that there was a time he himself wondered how could this be so profitable and that was the time he started saving as he believed if an auto driver can make this much money, this would invite either some regulation or competition. Today that saving helps him if during any given day, he isn’t able to earn the threshold revenue.

Classroom funda: Market Structure- Though markets cannot be perfect in reality but profits beyond a threshold should be a warning bell about upcoming changes in the industry. Also, it always pays to save a bit for future even if today seems to be perfect.

Open to suggestions and feedback.