An Auto-Rickshaw Cooperative

Posted in Finance Articles, Total Reads: 2311 , Published on 16 August 2012

Villages in various parts of the nation are deprived of many basic facilities like primary health centres, educational institutes, fair price shops, and electricity etc. Many do not even have transportation facilities to gain access to these basic amenities. The paper explores the possibility of finding solutions to the transportation problem by engaging the bottom of pyramid. The proposed model encourages the villagers to organize themselves and collectively discover sustainable solutions.


The demand for luxury vehicles is rapidly increasing. We are not satiated,even with reputed brands of Hyundai, Toyota or Honda which provide automatic transmission, Electronic Braking system, steering mounted audio controls etc. The budget of “upper-class people” is slowly expanding and many are now able to afford them. But the dream of common man is still stuck on Tata Nano, which gives the pleasure of owning your own vehicle to millions of Indians.

But this isn’t the base of the pyramid. The base comprises those who still cannot afford even a two wheeler; they have to rely on the whims of public transport, irrespective of the season, time or emergency. The realities are even harsher in villages where there is no public transportation rather the only means to commute for many kilometers is on your own feet.

This article attempts to seek solutions for the same.

Building on my fieldwork experience, the article proposes a cooperative model to provide a solution for the severe transportation problem in various villages in the district of Kanpur Dehat (Uttar Pradesh).

Cooperation is not merely working together, it is not merely living together, it is basically interacting for a purpose, a cause that includes all members. This interlocking can help achieve the desired results only when the community members have a shared understanding of the cause and a desire to identify and implement possible solutions.

Understanding Cooperatives

A cooperative is an autonomous institution of persons united voluntarily to meet their economic, social and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise. Cooperatives are based on the values of self-help, democracy, equality, equity and solidarity. All the members are treated equally and all have similar rights of participation. Also the cooperative members must believe in the ethical values of honesty, openness and care for others.

Understanding the need for auto-rickshaw cooperative

There exist a plethora of villages in different parts of the country where either there is no transport connectivity to the nearby town/cities or these are present in a very shabby state. The reasons for such lack of transport facilities could be improper road conditions due poor development in the particular block, a backward region devoid of basic infrastructure, unwillingness of the people to aspire for such services due lack of need, excessive poverty etc.

In the Ramabainagar district of Uttar Pradesh, for instance, are numerous villages which have almost no connectivity to the near by towns. My fieldwork in the village of Ekghara (Purwa) allows me to safely hold the government efforts culpable. The population of the village is around 1000 and consists of 154 households. Agriculture is the main livelihood of almost all of the villagers which is supported by animal husbandry. Different caste groups are present among which are ‘Thakurs’, ‘yadav’, ‘Kori’, ‘Kashyap’ etc.

The village has no medical facilities, and in case of medical emergency people have to commute to the nearest primary health Centre(PHC), which is in Rura, i.e. 4kms, on foot. Also the villagers are required to frequently commute to the nearest town, Rura, to purchase seeds, fertilizers and others agricultural inputs, to avail banking services, to avail the services of seed and fertilizer cooperative, to buy from the fair price shop,also many children go to the government school located in Rura. Due to the lack of transport facilities, the villagers, young and old, ill and diseased, all have to walk the distance irrespective of what the time is, how harsh the weather is, or how ill the person is.

Similar is the predicament of the numerous villages in the vicinity where the villagers have to travel long distances to the near towns on foot. The paper proposes a cooperative owned and managed by the villagers to solve these issues.

The cooperative and its feasibility

A cooperative can be formed among a group of 15 villagers, who can buy an Auto rickshaw and run it from their village to the nearest town and then further to the district headquarters. A second hand auto rickshaw costs around Rs30,000. The finances can be supported by either the NGO (Shramik Bharti) or the village Panchayat. Or a loan could be availed from the Banks or MFI’s operating in the region. The funding distribution must be in the 75:25 proportions. A share of 25% i.e. Rs7500 is to be borne by the members, which is Rs500 per member.

Let us work out the schedule and expenses associated with the running of an Auto-rickshaw.

The initial plan is to run it from Ekghara to Rura (i.e. 5kms) and then further to Akbarpur, the District HQ(i.e.10kms). The charges are fixed slightly less compared to the few auto’s already running between Rura and the District HQ. The following table summarizes the procedure

Distance traveled



Cost for running 1km



Cost of One round trip



Revenue from one round trip

(Rs1 per Km is charged,

4 persons are seated at a time)



Profit margin



Number of Round trips



Earnings per day

Rs 120

Earnings per month

Rs 3360

To run the auto, either the members (who have the driving skills) can, on a rotating basis or a driver among the unemployed youth can be hired on a monthly basis and given Rs2000 per month.

Thus the monthly saving for the members amounts to Rs1360. Thus in 6 months (after including the wear& tear expenses) the members are able to recover their basic investments.

The primary objective which was to bring transportation services is thus addressed.


“Even when the motive of collective action is unquestionable, there is always a question of motivating people”

The proposed co-operative is a tool for developmental action. It aims at overcoming challenges faced by villagers by organizing themselves and acting collectively to address the challenges.

Yet the two basic challenges that would appear are

1. The villagers have, to some extent, adjusted themselves to the present conditions and would thus be reluctant to envisage a change. They, first of all, need to realize the issues with their present predicament and display a will to collectively address it. This would require a shift from the Naïve state of Consciousness to Critical Consciousness i.e. they must understand that the problems due to lack of transportation do not pertain to an individual, rather it concerns the whole village and  thus collective efforts are imperative to attend them. Instilling this desire and will to put sustained efforts for a change for the whole village would be a challenge

2. Also in villages, the caste structure dominates the society and it gets increasingly difficult to function unless people cooperate irrespective of their castes. Thus organizing the cooperative, its members and its operation in a manner which is in sync with the existing caste divide in the village would pose another challenge.

This article has been authored by Ajay Vikram Singh from IRMA.

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