Pricing Strategy used By Rikshaw Wala’s

If you are an Indian and especially from North and Eastern India you know very well how important Rikshaws are in day to day life of a common middle class person. The face of a dark, expression-less man pulling a three wheeled machine for meagre charge has been an integral part of your life. Yet you do not know that they are the only marketing brain who use multiple pricing strategy for the service they provide in one single day to achieve their Target.


It is probably the only public transport means without any fixed pricing system yet it is comes under one of the very profitable small scale industry fetching good money for the Riskhaw owners. Normally in every small city, town or village there is one person who owns few Rikshaws  then hire some people, mostly uneducated who do not

posses any special skills to earn their daily bread and butter for pulling it. On an average a Rikshaw puller makes around 300-500 rupees per day out of which he gives back almost one tenth to their Rikshaw owners and k

eeps the rest for himself. The  success  rate of this business structure is so good that even in Delhi which possesses one of India’s best transport structure ,Rikshaws are one of the most prevalent source of travel for shorter distance.

Being a guy from a small town of Bihar it always fascinated me as to what makes these” Rikshaw Wala’s”  decide upon what price should be charged from a customer. This problem is more obvious to arise because you actually do not use any petrol or sophisticated machine in Rikshaws to make them run. Yet I always wondered what could be the factors that derive their pricing strategy. So after doing a lot of research work and chatting with the story started to unfold.

It so happens that every Rikshaw-wala knows a generalised earning if he is working on a particular area for one individual day. Unlike Auto Rikshaw’s they do not have any fixed stands. So they fix a rough idea about the amount they will be earning for that day. They basically divide their pricing strategy depending upon operation time.

1.       Morning- Its is usually peak customer time with all office going people and students. So their main target becomes to get maximum customer if possible grab other’s customer by decreasing their offered price what in our Marketing terminology call “Competitive Pricing”. More the number of customers they carry more they make earning and in a sense closer to their “Target”.

Tips-

  • This is the time where you can get better result if you bargain, but too much of bargain can at times let you stand alone because see ,its morning and there are many others like you who want that RIkshaw.
  • Pricing will be moderate at this time.
  • Number of Riksaws available will be less more so because demand is high at that time.

2.       Afternoon-This is the time when you can get to hear abnormally high rates. Mostly sun is high in the sky and even they know that pulling a cart along with someone at that times is something tough. So they prefer to go with “Premium Pricing” where if you are ready to pay price at the higher end then only you can expect their butts to move, else what happens is a common scene of people fighting with Rikshaw-walas “Yar he is asking too much…or bhaiyyaa are you mad”.They make sure they get almost closer to their daily earning target by getting one or two customer who agree with the Premium Pricing.

Tips

  • When you ask them how much they will charge, make sure you are ready with the genuine price for that distance, its better to agree than leave.
  • Good part is you will have lots of Rikshaw-walas to choose from as their will be many whose Morning shift was bad if you can find them you are lucky.

3.       Night – Here comes the night and you will face “Value Based Pricing”. They will all make you feel with moderately high pricing that “look its night and you need us more than we need you” and trust me while returning back home we do know that we need them more than they need us and that makes the price go moderately high.

  • Tips– Go home and sleep tight.
Contributed by SHARIQUE MANAZIR ( Class of 2013, IBS Hyderabad)

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