“Placing a request for a pick-up is a major headache, as the procedure involves a lot of approvals,” said an executive with the Pune-based BPO firm.

A top administration official said, “We have introduced stringent measures...in difficult times, we cannot provide every employee a pick-up from his or her doorstep at his or her wish.” KPIT Cummins has around 4,000 employees in Pune and is expected to further cut the number of buses it operates.

Moreover, the Metro Rail is considered as a major threat to the transport business in Delhi and the National Capital Region (NCR) region. Upender Singh Anand, owner of United Services Corporation, says: “Business has seen a 5-10 per cent decline in the last one year. Once the Metro begins in Ghaziabad and Gurgaon, business is expected to go down by 40 per cent, since companies are planning to issue passes to employees rather than providing bus or cab services.” BPOs like Genpact and EXL have begun a shuttle service which takes and collects staffers to and from Metro rail stations in Delhi between 8 am and 8 pm.

Cab owners complain that companies are taking advantage of the downturn. They say when diesel prices rose, companies did not implement new rates immediately, saying they will have to discuss it. But when prices decrease, they shoot a mail and implement instantly. For instance, till December, 2008, cab owners in New Delhi and Gurgaon areas were working on a Rs 6/km compensation. Now it is Rs 5.60/km. Companies increase or decrease rates by 10 paise for every rupee increase or decrease. In December, the government cut diesel prices by Rs 2, followed by an equal cut in January.

There are two modes of payment for cab owners: Pay per km (as in Rs 6/ km) or on route basis (Rs 900-1,200 per trip in the NCR catchment). “Now companies are asking us to revise the system. They are asking us to charge Rs 5/ km (Re 1 less) or implement a per employee system wherein they will pay as per the employees ferried. Imagine if we ferry two people on a route, what will we earn?” Jain asks.

BREAKDOWN
* Companies are replacing cabs with buses to save costs
* Cab owners are being asked to turn to CNG vehicles, which are more economical
* Rates are being renegotiated with cab owners
* The Metro is being perceived as a big threat to cab owners, while it saves money for IT-BPO firms

Source: Business Standard