Kolkata Yellow Cabs’ Decline: A Case of ‘Prisoners’ Dilemma’?

If the Bengal govt wants individual taxi operators to stop flouting laws, it will have to meet the unions halfway.

Iconic yellow Ambassador taxis waiting for passengers in Kolkata. Image used for representational purposes.

(Photo: iStock)

The prisoners' dilemma is a well-known example from the world of game theory. Simply put, it posits a situation where two prisoners are being held and interrogated in different cells over their suspected participation in a crime. Although unable to communicate with each other, the prisoners know that they will be interrogated at the same time.

The situation is made clear to both the prisoners: confess before your accomplice in the other cell does, and you'll be let off with a much lighter sentence; don't, and bear the brunt of the harshest sentence possible. Without a confession from either party, however, the police will be forced to let both prisoners go scot-free.

How the Kolkata Yellow Cab’s Troubles Began

The solution seems deceptively simple – both prisoners should say nothing to the police. But there is an issue of trust. Can either prisoner really trust the other to uphold honour among thieves? Eventually, both parties confess in a bid to save their own skins, leading to a solution that is far from optimal.

This behaviour has been instrumental in the decline of Kolkata’s iconic yellow Ambassador cabs, a ubiquitous feature of the city’s streets.

Their troubles began with the entry of private app-based taxi services like Uber and Ola, whose popularity and adoption surged – ironically, for a city long famed for its rebellious price sensitivity – in part due to higher, but more transparent, pricing.

Kolkata boasts of public transport that is easier on the pocket than most other metro cities.

The same holds true for yellow cabs, the base fare for which is a mere Rs 30. This fare holds for the first 2 km, following which the fare remains steady at Rs 15 for every subsequent km. For air-conditioned taxis, the rate is a flat 25 percent higher than that charged by the yellow Ambassadors.

Why Kolkata Yellow Cab Drivers Need to Change Their Mindset

Compare this with Uber and Ola (both of whom have a base fare of approximately Rs 60 when there is no surge pricing) and it would appear that the city's indigenous taxis are well positioned to compete with their private counterparts.

The trouble, however, is the blatant refusal of the cabbies to actually charge rates by the metre – a cause of disgruntlement for many of the city's residents. But the cabbies, in the mistaken belief that they are underselling themselves, have chosen to price themselves above that of the ride hailing apps and, indeed, beyond the range of the market.

Taxi drivers have even resorted to showing passengers the higher fares on app-based services to justify the practice of charging a fare greater than that warranted by the metre. This is where the prisoners’ dilemma enters the picture.

In order to compete against private players, the yellow taxi drivers would need to enter into an agreement with each other and charge by the metre. But would the cabbies really trust each other to uphold the deal? And for how long? The outcome is only assured if everyone plays by the rules. Cabbies who reneged could bring the agreement to its knees even as they made handsome profits in the short term.

Inadvertent Dilution of the ‘No Refusal’ Cab Campaign in Kolkata

The second issue is the oft-cited refusal of the city's yellow cabs to visit certain destinations and areas. The anecdotal reason as given by the cabbies is that certain zones are simply not profitable enough as drop-off points for them, due to the lack of return passengers from those areas. The cabbies argue that they would therefore have to return to more bustling parts of the city if they wanted to pick up passengers, incurring the loss of driving that distance in the process.

In order to tackle part of the problem, the government of West Bengal launched a fleet of two thousand ‘No Refusal’ taxis in 2013. These white-and-blue cabs would have the words No Refusal’ emblazoned clearly on their doors, and would be commandeered by drivers who were under strict instructions not to refuse passengers, regardless of destination, time of day, or weather.

The move was lauded by the city's residents, and seemed to work for a time. The very next year, however, the government passed an order requiring all taxis — white or yellow — to bear the ‘No Refusal’ sign. This was done in a bid to end confusion about whether the absence of ‘No Refusal’ on yellow taxis implied that yellow taxis were free to refuse rides, a culture the city's transport department did not want to encourage.

But what the transport department failed to foresee was the effective dilution of the ‘No Refusal’ campaign, leading to all cabs, white or yellow, reverting to their old ways in a few short years’ time.

Why Govt & Taxi Drivers’ Unions Must Meet Each Other Halfway

On the other front, the issue of fare pricing persisted. In 2019, Kolkata’s taxi workers unions organised a three-day city-wide strike to protest amendments to the Motor Vehicles Act, which had failed to revise existing fare structures – some believed, to encourage transport sector privatisation. The protests failed to yield any tangible result and, in 2020, three unions, citing petrol, diesel and commodity price hikes, unilaterally announced that all taxis would henceforth charge an augmented base fare of Rs 50.

The government responded by labelling the move illegal, going so far as to say that it threatened the competitive advantage that yellow taxis offered to the economically underprivileged.

Taxi unions, on the other hand, claimed that the move to hike fares to Rs 50 was done with an aim to end the practice of overcharging, and to introduce a degree of uniformity.

When all is said and done, it is clear that if the government wants individual taxi operators to stop flouting the law, it will have to meet the unions halfway.

There is no doubt that the continued presence of a cheaper alternative to app-based cab services would benefit economically weaker sections, besides keeping the drivers of yellow cabs employed.

Agreeing upon a fare-pricing system that the unions consider equitable will be essential in discouraging ‘rogue cabbies’, and will enable unions to provide the government their full cooperation in charging fare-violators and ride refusers hefty fines, without worry of backlash.

The onus will then fall entirely on the taxi drivers themselves who, in the absence of such compliance, may find themselves victims of the prisoners’ dilemma.

(Prithviraj Tankha is currently pursuing his MBA in sales and marketing from SCMHRD Pune. An avid reader and a film enthusiast, he hopes to travel extensively someday. This is an opinion piece. The views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)