Tuesday, June 14, 2011

Convenience Fees

Login to the Indian Railways site and book a ticket. Pay a "convenience fee" of 20 rupees per ticket. Ditto for almost any other site. Whether it is online movie ticket booking or online e- transfers, online users in India are being ripped and milked.

In any other country web users get a discount - for taking a load off the physical infrastructure required to run either a bank or a ticketing booth. Not in India. In India online users pay a "convenience fee" over and above the actual transaction. There is no real reason except that those who book are the "upper crust" mostly taxpaying and used to being looted by all and sundry including the government. The companies use these users to subsidize their other non-productive assets.

Take the case of the railways. When was the last time you saw an army of ticket bookers for Jet Airways or any other airline? Why is that the railways need a humungous infrastructure to book tickets staffed by their own when airlines have depended on agents and suchlike for almost a similar timeframe? And while the railways and road transport services have their own e-infrastructure for ticket booking that supports both agents and individual customers, the answer atleast for the railways lies in politcs. The railway minister(s) job is to create jobs for their constituency. And thus it happens that we recruit ever more people into an already bloated railways - and many of them end up looking forward to a career in ticket booking. And you, the ignoramus who wants to travel by train, instead of standing in the long queue to worship the deity who will hand over your ticket chooses to book online. Shit. That means the more people book online or at agents, the less the job creation engine of the Indian railways will run. Therefore, you idiot, you will be penalized - with what shall we call it - convenience fee each time you book a ticket sitting in your home. All this for travelling toilet class. (More on IR here.)

The story of banks is exactly the same. When there is an army of clerks waiting to do slowly and inefficiently, the same thing that can be done flawlessly and at lightning speed - those who want to use it will be charged - otherwise their inefficiencies will be exposed and they will have to let go off people. So, you, the smart internet banking user are subsidizing them.

Ditto for the RTCs. APSRTC and Karnatakas RTC are light years ahead in the game - thought I suspect it was the former which was the lead thanks to Chandrababu Naidu. APSRTC had counters all over Bangalore for its Tirupati trips while KSRTC counters were hard to find in the capital city of its state. Now KSRTC has caught up and has a great network of both good buses and ticket counters. Needless to say it is making money as well. There are a few RTCs still do not have an e-ticketing infrastructure because I suspect their ticketing employees could be unemployed. Keralas run down RTC is one such example. While every private bus operator in Kerala and to Kerala is making money Keralas RTC somehow survives with old buses and striking employees. Whatever. Well, nobody is dying to buy Kerala RTC tickets - they book online with KSRTC and APSRTC and pay the convenience fees too.

The reason is similar for most others - except the answer is not in politics, the answer is in milking the class which is willing to pay.

So, thats for you the smart consumer. Who says you need to give charity? Each time you pay convenience fees, you are donating to the health of yet another unhealthy organizations. The government deems that is their right to milk you - one who is contributing to their efficiency.

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