Chapter 3
From Servitude to Solution—India
GIVEN MY NORTH AMERICAN BACKGROUND, I HAVE ALWAYS BEEN uncomfortable using cycle rickshaws as a mode of transportation. Not so much from a safety standpoint or a “the street comes up and hits you in your face” feeling (which it does as you are riding along), but from being overwhelmed by a sense of indignation and embarrassment that another human being should be working so hard to take me from one place to another. Observing the rickshaw driver's back as I sit behind him, I note the strain in his body as he stands on the pedals pulling my body weight. It opens a floodgate of thoughts. I feel bad that I might be too heavy for the driver; I feel too privileged, too sad that another human has to spend his life pulling a rickshaw so people dressed like me can earn a far better salary than he does. At the times when I rode a rickshaw, I remember transporting a mental image of myself to somewhere else—I made believe I was not really there.
So when I met Dr. Pradip Kumar Sarmah, founder of the Rickshaw Bank, I knew instantly that I needed to learn everything about his ideas and vision for improving the lives of the rickshaw pullers; the people for whom I felt so much empathy. He was being supportive of one of the poorest classes of people in India (as well as in parts of Asia and Africa), mostly composed of migrants from small rural villages, and I was all ears.
“People can get loans for cars, so why can't rickshaw pullers get them to own rickshaws?” Pradip asked himself this question late one night after he took a rickshaw ride to get home from his practice as a veterinary surgeon. A rickshaw was always the fastest way to get through the heavily trafficked streets of Guwahati (a premier city among the eight states of northeast India), and the only way to get to and from his appointments in a timely manner. Though rickshaws get stuck in traffic themselves, they often manage to break free more quickly than cars and, of course, they can find alternative routes prohibited to larger and motorized vehicular traffic. So for Pradip, the rickshaw was often a preferred way to travel. It was also much cheaper than other modes of transportation.
Caught in the Self-Perpetuating Cycle of Poverty
The question of ownership stayed in his mind, and one day in 2002, while he was again traveling in a rickshaw and stuck in traffic, Pradip became both talkative and inquisitive and asked the puller a few questions about his life. He found out that the driver had worked on the rickshaw for the past sixteen years, and all that time he paid about one-third of his earnings (25 rupees a day during 2002) to rent the rickshaw from the owner. But the answer to Pradip's last question was the most telling:
And the third question I asked was how much have you earned out of this rickshaw driving activity? He said around 60 to 70 rupees per day. And I asked, why don't you own a rickshaw of your own? And he said, I don't have that much money to purchase that rickshaw. [At that time, the cost of that rickshaw was around 7,000 rupees.] So by that time, I got to my destination and I got down from my rickshaw. As I go about dealing with my normal work, I forgot the whole story. But at night time, while I am going to sleep, this same story reappears to my mind. And it started disturbing me. Then I got up and I started using my calculator and I found that from all the money he paid for daily rental fees he could have been the owner of that rickshaw by the end of a year. But he never owned it, he always hired it, and because of that he could never hope to change his earning potential or his life situation. He slept on the streets and didn't have any address. He literally had no identity and because of that he was not able to get the benefit of any social services. He would never have access to any financial institutions nor to any social security.
According to Pradip, there are about eight to ten million Rickshaw drivers in India. Only ninety-nine thousand are legally licensed in New Delhi, the number of licenses capped by the city. However, illegally, there are about another six hundred thousand drivers, though no one is really sure of the exact number. Most of them have licenses courtesy of the bribery system, which extracts a 1000 percent increase in the price of a legal government license. There are no clear-cut official statistics on either the number of rickshaws in India or of the pullers who rent them. However, it is known that the Indian mafia plays a large role in the owning and renting of the rickshaws, and of collecting the fees.
Few rickshaw pullers have the initial intention of making rickshaw driving their life's work. They usually leave their villages in search of a good job in a big city and a better life. But being uneducated and from a rural environment makes it difficult to get a job. They quickly run out of the survival money they brought with them. The mafia, which owns thousands of rickshaws and on average makes thousands of rupees a day in rental fees, has appointed agents in the railway station. They can easily identify the new migrants to the city. They offer migrants a way to make money until they find a more permanent job. So the newly arrived start to drive a rickshaw. And they find that they can make enough money to get by—just barely.
These rickshaw pullers work on average eight to ten hours a day, seven days a week. In the evening they usually sleep on the street—and often get harassed by the police, so sleep deprivation is common. And since pulling a rickshaw is hard work and long hours, it's a difficult and somewhat miserable life. It's easy for them to latch onto something to make their lives more bearable. Many get introduced to drugs or alcohol as a way of relieving pain. Once they have started down this path they become addicted. And once addicted, they cannot go home or leave the city, because they need their daily drugs. They become prisoners of the city, permanent settlers who can never again return to village and family. They never get a chance to get out of a vicious cycle, and they and their dreams are crushed forever.
This cycle is happening throughout India and the addicted, street-sleeping puller is adding to the negative reputation of the rickshaw driver as a socially unacceptable person. The irony is that of the eight-million-plus rickshaws, approximately four million are running every moment somewhere on the road. On average they have two passengers, which means that eight million people are traveling in a rickshaw in India at every moment. All of these rickshaws are being driven by the rickshaw pullers. But they are never recognized as an important sector of society, a sector that is providing necessary transportation services to the entire population. They are not even considered a part of the community where they work and live.
Changing Status Quo, Changing Lives
Pradip wanted to learn more about the drivers, so in his spare time, he did a survey of three hundred rickshaw pullers. As soon as he learned enough about their plight, he submitted grant proposals to a number of agencies for funding. All were denied because the target population was migrants, and there seemed to be little interest in doing anything to help them. Because Pradip was also involved in publishing a university journal, he began to think about the income for the magazine that was generated by corporate advertising. It dawned on him that the back of a rickshaw was an ideal place to put an advertisement, and that could be a way for the puller to earn extra income.
Pradip conceptualized a new rickshaw with space to accommodate a corporate advertisement on the back. In the process, he decided to go ahead and initiated dialogue with the Design Department of the Indian Institute of Technology, Guwahati, about the possibility of such a rickshaw. Along with new knowledge and understanding of the design process, there came a ray of hope that it could be possible to create a new ergonomic design that could decrease the strain of pedaling and add to the comfort of the driver—besides providing adequate space for advertising. With these ads in the back, he conceptualized the operation of a Rickshaw Bank on the rent-to-own principle and was successful in getting three large Indian corporations to sponsor the advertisement placement costs of one hundred rickshaws, bringing the idea of the Rickshaw Bank into reality.
From the beginning, the intention of the Rickshaw Bank was to improve the lifestyle of the rickshaw drivers so they could work in comfort and with dignity. To do that Pradip realized he would have to elevate rickshaw pulling to a profession, one that people could recognize as providing a needed service that benefits the entire community. And he needed to find a way to extricate the pullers from the onerous rental fees that were ensuring that they would never be able to pull themselves out of subsistence living.
Finding a way for the pullers to pay for and own their cycles was only the entry point. Pradip's vision was expansive. It included everything from the ergonomic, advertisement-ready, newly designed rickshaw to the financing mechanism that would lead to ownership. From his original survey research, he realized that his vision would also have to include legal licensing, accident insurance, and health insurance, not only for the drivers but for the family members who lived with them. An added boost to dignity would come from supplying uniforms and photo identification cards so the drivers could look like professionals and feel pride in what they did. Pradip needed to create an entire system of dignity.
The Rickshaw Bank has three dimensions that mimic the three wheels of a cycle rickshaw. One is technical, one is financial, and another is social. All three work in unison to provide an innovation that equally includes and delicately balances business and social aspects.
The technical dimension considers how best to reduce the drudgery of the rickshaw driver's work. The new model is ergonomically and aerodynamically designed; it is 40 percent lighter than traditional models, which for the most part have not changed in the century since cycle rickshaws were introduced in India. The base of the new rickshaw is lower, so it better accommodates the elderly, children, and women wearing saris. Its center of gravity is very well positioned so the rickshaw is less likely to tilt and fall over when it makes a turn at a higher than safe speed. It is much easier to drive and ride.
Financially, consider that it now costs 10,000 rupees to buy a rickshaw, and there are eight million rickshaw drivers who rent daily. Eight million times ten thousand is a big enough business opportunity to be attractive to traditional banks and insurance agencies. After getting involved in a Rickshaw Bank pilot program, four banks came forward to support the Rickshaw Bank activities. Once the banks began to understand the financial and business opportunity, they came forward to support the Rickshaw Bank activity on a large scale. And very significantly, one bank has gone even further. It is not only financing operations of the Rickshaw Bank so it in turn can keep financing the rickshaw drivers, it is also allowing the participating rickshaw pullers to open up bank accounts in their own names.
In the history of India, access to the banking system is a first-time occurrence for the rickshaw drivers. Can you imagine how powerful it must feel for the drivers to not only have the money to deposit in a bank but to be allowed to have a bank account like other businesspeople in India? It was considered by some a rite of passage with an inherently powerful societal impact.
The financial portion also includes a number of touch points. It starts with the rickshaw being given to the puller when the repayment plan begins. The driver still pays the same 24–40 rupees a day as the old daily rental fee, but that amount is considered a repayment, not rent. And significantly, the new daily repayment fee includes the cost of the rickshaw, the cost of the insurance, the cost of the license, uniform, and photo ID card. It is a payment toward participating in the entire system. And the Rickshaw Bank continues to collect the ownership installment money from the drivers and pay it back to the banks.
By aggregating the rickshaw pullers into a large pool, Pradip has been successful in the negotiations to make it all possible. For example, the rickshaw has never been insured in India. If the driver got into an accident, he lost whatever assets he had; if he owned his own rickshaw he lost it and its daily use. This was devastating to someone who had next to nothing and lived day to day. So insuring a rickshaw, the driver, and its passengers was indeed a novel idea and one that took a lot of work on Pradip's part to reassure and convince the insurance companies. Now, all rickshaws are brought under a comprehensive general insurance plan that covers accidental risk for the rickshaw, the rickshaw pullers, and the third party. By pooling the pullers and providing financing guarantees via the bank loans, the Rickshaw Bank was able to arrange for reasonable insurance premiums.
As if all this was not enough to improve the standard of living of rickshaw drivers and their families, the Rickshaw Bank decided to add a life insurance plan as well. It coordinates this program with an insurance company who has agreed to participate in the system that Pradip is creating. The premium is collected separately by the Rickshaw Bank's field collectors and again aggregated and deposited by the Rickshaw Bank's insurance coordinator. Though the initial response to this offering was not encouraging, the wives of the rickshaw pullers turned out to be very interested in it, and participation rates are increasing!
The entire Rickshaw Bank concept is designed so that by paying the same amount as their daily rickshaw rental, the drivers now make an installment payment toward ownership. They pay for a maximum of 440 days, after which they become the vehicle's owner. And then they receive the whole package, including a photo ID and a uniform, in their own name. Very interestingly, the uniform and the ID card seem to play a significant role in the whole scheme. The ID card helps keep the driver from being harassed by the police; it also helps in obtaining the health insurance. Meanwhile, the uniform adds to the professional look, which builds the driver's dignity. Both help provide well-being, physically and emotionally, while elevating rickshaw driving to a profession in the eyes of the pullers and their customers.
On the social side, the rickshaw drivers now have not only accident insurance but health insurance, and low-cost medicines are available to them. The Rickshaw Bank has become a kind of loose association to which they feel proud to belong. For the first time rickshaw drivers are doing more than surviving. And this all can be seen and felt by the public, who are now more interested to ride the rickshaws.
A New Reflection for Rickshaws
The world has certainly changed since Pradip founded the Rickshaw Bank in 2004. The word green has become imbued with a meaning that far transcends color. All of a sudden the rickshaw is being recognized as a green vehicle whose only fuel is human energy. The world is finally noticing rickshaws—and the rickshaw drivers and their vehicles are ready for the attention.
As rickshaws gained their newly polished place in society, Pradip added one more component to his vision. One that would change the entire system, not only for rickshaw drivers but for other workers who are considered lowly and faceless and remain unseen, underserved, and unjustly maligned. He has been petitioning the Indian government to start a fund designed to accrue interest to be passed on to banks in order to guarantee loans not just to rickshaw drivers to buy their vehicles but to others also traditionally turned away by lenders. That way, other organizations that want to copy or compete with the Rickshaw Bank can enter this newly created marketplace developed by the government's guarantee. If they get guarantees against loan defaults, then banks will be less reluctant to provide financing and the entire system of bank loans in India will be more open to people who could really use them for buying or building homes, sending their children to school, or starting small businesses.
Supporting this rickshaw revolution are the commercial and state banks, the insurance companies, and soon, hopefully, the government of India. They are the changemaker organizations who were open to seeing the social advantage of their business decision to fund Rickshaw Bank and went a few steps further because of it. They took a business risk, and they all took part in supporting a system-wide change.
The drivers who joined the Rickshaw Bank should be considered changemakers as well. They became inspired to join the Bank because they were able to find the strength of character to reject their current conditions and break out of the vicious cycle that defined their lives. By being able to dream a better life for themselves and their families, no matter how downtrodden they had become, they now became something else—they became part of the change.
Madhab Kalita is one of those drivers. He started to pull an illegal rickshaw at age fifteen and rented one on a daily basis for twenty-eight years. He felt that he had no alternative way to make a subsistence living. Now he has a newly designed rickshaw and he makes enough money that he can guarantee loans for other rickshaw pullers. He works like a voluntary agent and has helped many drivers to own their rickshaws. As his wife observed Madhab's success, she saw an opportunity for herself. She asked the Rickshaw Bank if it could help her improve her earnings as well. So the Bank designed an ergonomic cart that she could pull herself from which she could serve snacks and tea. She participated in the repayment plan and pays 50 rupees a day toward future ownership of the cart. The cart has become an informal hub, a meeting point for pullers to come to, have snacks, and deposit their daily repayment fees. She now earns more than her husband! Because of their newfound earnings, Madhab and his wife have applied for and been granted a loan from a Rickshaw Bank to construct a house. For the first time in twenty-eight years they are doing more than surviving. The cycle of change continues …
To fulfill his expansive vision for changing millions of lives through the Rickshaw Bank model, Pradip knows that he will have to engage many people and institutions in helping him create the required system change:
My vision is that the whole concept does not have to be high-tech—but bigger numbers of people, corporate entities, and civil society as a whole must be fully engaged in the concept of a Rickshaw Bank and involved in solving the issues in order to make an impact. I cannot reach those numbers alone. So banks, insurance companies, institutions, colleges, and students have shown that they have a role in starting similar “rickshaw banks” and in giving rickshaw pullers and owners access to loans, other bank products, and affordable insurance policies. They have a role in copying and spreading what we have done. All of them need to be part of the change and part of the solution.
The rickshaw and the system that surrounds it is an example of an informal structure that had not changed in a hundred years. There are many other similar informal and formal systems that perpetuate poverty and extract misery for millions. Access to financing, to bank accounts, to health insurance and accident insurance as well as new product and service designs can take the notion of poverty out of the dark ages. The business model developed by the Rickshaw Bank points toward emerging enlightenment.
Now that I have learned about Pradip's incredible efforts to intervene in the perpetual cycle of poverty that envelops a rickshaw driver's life and family, when I next find myself in any country where rickshaws are present, I will make a conscious effort to support them. And I will make sure to congratulate the driver on his newfound life!