No takers for the Rs. 5 scheme?

Buoyed by the Re. 1 initiative that was run by the BMTC earlier (read my post on this) in September, the state transport minister announced reduction of Volvo fares on Weekends and holidays to Rs. 5 (minimum) against the normal fare of Rs. 10 (Minimum). The maximum fare charged by Volvos normally is Rs. 55, but on weekends - under the new scheme - it would only be Rs. 22!

This was what happened:


(The first image was taken when volvos were for Re. 1, and the second when the Rs. 5 scheme came in!)

Quite interestingly, The Times of India ran a story on the low patronage for Volvos, right the next day after the Scheme was inaugurated. (You can read the story here).

So what went wrong?

The newspaper (and some authorities/crew) blamed it on "low awareness" or "wrong day" for the poor patronage. I was on a Volvo on the day the scheme was launched (imaged above, right). I was traveling to Arakere Gate on the Bannerghatta Road, and the conductor charged me the normal fare. I was not bothered to ask him the reason, but a co-passenger wasn't ready to take the non-implementation lying down!

The conductor was question why he was charged normal fares, and the answer came with a smile: The offer has a "tiny star" on it! A tiny star implies Conditions Apply. So what are the conditions? The offer is valid only on selected routes.

Obviously, my route was not the "selected" few, and so was the Airport routes. He mentioned that the offer was valid only on buses which run within the city limits and passengers in other routes had to shell out the old fares! The move, according to the conductor, was to popularise volvo buses in the city. He was of the opinion that Volvos were performing very well on Suburban routes, and such offers were not necessary here.

Why was this very important condition skipped when the minister announced the scheme? The website of BMTC has however mentioned that the new fare is applicable only for selected routes.

Not only that the "Rs 5" initiative is for selected buses, so is the fare for other buses. Buses running along the "IT" corridor charge higher than normal buses! I feel this is outright cheating since it is the IT corridor ones which run crowded during peak hours. Perhaps, V-365 (KBS to Bannerghatta National Park) is the only route which is pretty popular among passengers, and this route always has passenger in it! I am one of them ;-)

Moral of the story: Take any offer from BMTC with a pinch of salt :(

Comments

SloganMurugan said…
Well, I don't think it is cheating. It's a business strategy. Moreover, it's a premium product not meant for everyone.
Binai.K.Sankar said…
Being a premium product doesn't give BMTC the right to charge at their will for each route. "Cheating" was not used in the normal sense - but I disapprove of such business strategies. The routes give them good revenue, and i feel they should provide more concessions to encourage more people travel in them. If not discounts, atleast charge at normal rates. This should encourage people to leave their cars at home, and take a bus instead! I am sure many would like doing it...
Manish said…
Binai,

Buses running along the "IT" corridor charge higher than normal buses! I feel this is outright cheating since it is the IT corridor ones which run crowded during peak hours.

This may appear like 'cheating', but is in fact a very good pricing strategy - in economics it is known as 'third degree price discrimination' and results in benefits to both the consumer as well as the producer (here, BMTC). The reason being that two different groups of commuters - the IT crowd and the 'others' - are being charged their 'reserve price' (i.e. the price which they are willing to pay for the service). The IT crowd is generally more affluent and hence, their 'reserve price' is higher-therefore, they are charged higher. This brings in added revenue for BMTC, and at the same time, these commuters don't feel at a loss, since they are anyway willing to pay the price. On the other hand, the 'other' commuters have a lower 'reserve price', and hence they are being charged less, in order to encourage them to use the service.


Perhaps, V-365 (KBS to Bannerghatta National Park) is the only route which is pretty popular among passengers, and this route always has passenger in it!

Not the only route! Routes 335E/333P (KBS-WFD) are also extremely popular among commuters and run full almost all through the day. This bus has a myriad crowd - IT professionals, college teenagers on dates, and even school children! It is also one of the few routes that runs crowded in both directions! During peak hours, there are buses on these routes every 5-10 minutes!

Popular posts from this blog

First ride on Airavat Diamond Class: Bangalore to Thrissur

The Bangalore "Satellite" bus station...