“Illegal franchising” in India — (1/2)

In my two last visits to India, I have had an interesting insight which I would like to share with you. The following incident happened in Summer 2005 when I was coming to India. When coming to India I generally take a flight to New Delhi and take a train from there to my destination. There are a couple of fast trains from New Delhi towards Kolkata named Rajdhani Express which I generally prefer. They take about 2/3 the time most other trains do. However, these are few in number which leads to a ridiculous buildup of advance reservations. The seats fill up as early as one to one and half months before the date of the journey and as you can imagine, it’s really hard to program a trip that early.

I planned my trip to India in summer 2005 about a month in advance. I had little problem getting a good deal on the flights but I couldn’t get a confirmed ticket on Rajdhani for the appropriate day. I was able to secure a waiting list ticket. (A waiting list ticket automatically turns into a confirmed seat once a given number of confirmed tickets are cancelled.) I had a waiting list number of 1 which made me confident that given a month’s time it would be confirmed. I could not be more wrong.

Well, I cannot believe that there was not even one cancellation for an entire month. I was certain that there was something else going on. When I reached India I still didn’t have a confirmed ticket. I was beginning to worry. I had no place to stay, the train was in about four hours and I had no intention of travelling overnight without a confirmed seat. The magic of Indian economics begins now.

An old man walked up to me and said, “Do you need a ticket sir?”. I thought… what are the odds! Except when there are about a 100 of these guys probably coming up to people in all kinds of trouble and offering a solution. I told him that I needed a ticket for a train today. I thought he would laugh at me and say, that’s impossible and suggest a hotel to stay. (I think this might be what you might expect in the US or EU). This guy on the other hand took me confidently to an office on the other side of the road. I followed less out of hope and more out of curiosity.

Of course no service comes without money and this guy later said, “Saheb, my job is done. You can pay me whatever you think is appropriate.” I gave him Rs. 20 (think $3 in terms of cost of living). He seemed to be more than happy and he left. It might be possible that he also collected some money from the office he took me to. Okay, this office was a small room with a single window with a view of the railway station, was sparsely crowded and had an air-conditioner. Given the summer heat in New Delhi I would pay just to be in an air-conditioned room. This guy in the office was obviously selling railway tickets illegally but this was such a relief compared to the legal way of buying tickets in India (which is basically standing in a long queue in the heat for around half an hour and then presenting at the counter a form with specific details down to the train number to get a ticket. If you are missing a detail (say the train number) you are shoved out of the queue. Of course there is no easy way to find the train number of a given train, leave alone a sensible way to plan your entire journey which involves not only finding all the different trains you might need to switch but also finding seating availability in all of them). An air-conditioned office with an agent was such a relief…

I told him that I had a waiting list ticket for the Rajdhani with me which I needed to be somehow confirmed. I told him that this was for a train leaving in less than 4 hours. I thought he would be surprised at my audacity and expectation… but he continued very normally: “We will charge 30% extra over the ticket’s cost.”
I was surprised: “You mean you can get me a confirmed ticket on today’s Rajdhani?”
“Most certainly Sir. If you come after around twenty minutes I will have the ticket ready for you. I will need some advance payment though.”
“Sure.” I paid him a little and left still very surprised by what he claimed he could do. I went outside for some lassi (refreshing drink made using blended yogurt and rose essence). I thought about the number of hoops this agent would have to go through to get me the ticket. He would need to bribe people in the ticket counter to make sure he kept some seats reserved for premium sale such as mine. The person at the ticket counter has to make sure that those seats are reserved even though he doesn’t know the name or the age of the people who would eventually buy it. Only god knows how he does that… I guess some more money exchange is involved here too. Also, he is not the only guy selling tickets illegally. He has competition. So he needs people at various places in the station to see that his assets are not under risk. He maintains an office at a place which people would pay a lot of money for. He also has air-conditioning! And he doesn’t seem to have a crowd following in his office. Suddenly the 30% extra seemed too paltry… may be he is competing on these rates too. Hmmm… this seems like an already mature market running smoothly on the fundamentals on capitalism very strangely in the absence of law and order.

I came back after 20 minutes and sure there was my ticket… it was in every way a genuine ticket. When I boarded the train about three hours later my name was on the reservation charts, the Ticket Collector had my name on his list and the whole thing left me very amazed. I talked about this to some other people in India about this and they were surprised to see me so excited. They blamed the system and the government for mismanagement and rampant corruption and bribery (very rightfully). They however did not believe that there was something more interesting going on here. To put things in perspective, I did a little research on expedia.com (popular flights and hotels booking site in the US): A flight from Chicago to San Francisco costs about $223 dollars if you book tickets two months in advance, costs about $350 (57% extra) if you book it one month in advance and $501 (125% extra) for the next day. The same goes with hotel booking too. I got a Rajdhani ticket with only 30% extra 4 hours before the journey. Now, that is some capitalism. If only the thing was legal…

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2 Responses to “Illegal franchising” in India — (1/2)

  1. Pingback: “Illegal franchising” in India - 2/2 « Defective Compass

  2. Mahesh says:

    What you got is a ticket from the EQ quota. Some % of the the seats in every Bogi are reserved for emergencies. The quota is released 4hrs before the chart is prepared. If you have decent contact in the railways and have a wait listed ticket, This is way to get it confirmed.

    BTW, there is something called a tatkal ticket. 10% of seats in a bogi are under this quota and released 5 days before the train departure. You will have to purchase the ticket end-to-end though and a few extra bucks.

    HTH,

    -Mahesh
    Celebrating Life…

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