Tag: monopoly

The curse of geography on Air India

International flights are regulated by a strange agreement, in which at least one end of the flight should be in the country that is the “home” of the airline. For example, Jet Airways runs flights along the Mumbai-Brussels-New York route, but is forbidden from carrying passengers solely from Brussels to New York (that market is a monopoly for airlines based in EU or USA). However, if Jet has flights from Mumbai to say Brussels and Singapore, it can carry passengers from Brussels to Singapore, since they’ll be touching the ground at Jet’s home country.

Secondly, airline ticketing is usually done on a “source-destination” basis, and not based on each leg. For example, the price of  a Brussels-Singapore ticket on Jet Airways has nothing to do with the price of Brussels-Mumbai and Mumbai-Singapore tickets. As far as the airline is concerned, all these are independent “markets”, and the price for Brussels-Singapore is set partly based on what other airlines charge for Brussels-Singapore (taking into account flying time, layover time and all that).

These two together give an undue advantage to airlines that are situated in countries that are “in the middle”. The best example for this is Emirates, which flies, on the one hand, to several destinations in Asia, and on the other to several destinations in Africa, Europe and the Americas. This allows Emirates to effectively aggregate demand from all these destinations and connect them up in the form of a hub.

For example, there may not be too many people who want to fly Bangalore-Venice. However, if you aggregate all destinations Emirates serves to the West of Dubai (in Europe, Africa, US, Middle East, etc.) there will be a lot of people who will want to fly from Bangalore to all these places put together. Similarly, if you aggregate all destinations in Asia, there will be enough people from Venice to fly to all these places put together and thus Emirates, by providing a hub, creates an effective market. This is what I mentioned earlier as the advantage of geography, of being situated “in the middle”.

Now, if Air India were to be profitable in the international sector, one way of doing so would be to create a “hub” in India, where Air India connects up passengers to the east to those in the West. While that sounds simple enough, what we need to see is if any place in India is situated conveniently enough to function as a hub. Now, look at the map of India, and see what is around.

To the north-east lies China. There is a lot of nothingness between India and the parts of China that generates high airline traffic (the coast). To the northwest, you have Pakistan, Afghanistan and barren republics of Central Asia. The “business parts” of Russia, again, are quite far away. To the South of India you have vast oceans, the south-east and west already have thriving hubs (Singapore, KL, Bangkok, Dubai, Doha, etc.) and India is again not well placed to compete effectively with any of them. I know this isn’t a rigorous analysis, but look in any direction, and you’ll find it hard to believe that there is reason enough for people living there to fly internationally using India as a hub.

This is the curse of geography that India suffers from, and there is nothing we can do about it, and this is something we need to accept. Given this scenario, the best airlines from India can do is to connect various places in India to places abroad where there exists a “direct market” (for example, Kochi-Dubai by itself is liquid enough so you can have Indian carriers operating that route). Thus, airlines from India can never aspire to achieve the scale and connectivity of an Emirates or a Malaysian. The sooner the airlines accept it, the better.

The moral of the story for Air India is that it should recognize this curse of geography and give up on its dreams of connecting the world. It should stick to connecting destinations within India, and “direct markets” from India  to destinations abroad.

Pashchimavaahini – Part Deux

I’ve twice written here about Pashchimavaahini – that part of the river Kaveri near Seringapatnam where it flows west. I had once written about it immediately following my first visit there. And I had written about it once again last year when I had disccussed the economics of the place. So over the weekeend I had to go there again, for the second time in two and a half years. In order to do the ritual that is associated with the place – which is to immerse ashes of the dead.

A few pertinent observations from the trip:

  • The place has lost the economics of the food. They probably didn’t want “casual travelers” to come and eat there, or maybe they overestimated their own monopoly power, but the lunch is priced at Rs 70 now. Quality has also dropped – sambar was watery and vada not fried properly. (I’d recommend you to read the death markets post I’ve linked to above before reading on).
  • To put this pricing in perspective, I must mention Kamat Upachar, a restaurant between Channapatna and Maddur. They have a breakfast buffet for the same price! And the buffet includes a choice of juices, bread, idli, vada and dosa, and you can eat as much as you want.
  • This time the shastri we engaged was peaceful. We included an “all-inclusive” price and told him we’ll give only small change as daana
  • I told the shastri to do the minimum possible rituals and told him that I’m doing these things becasue they “need to be done” and not due to some special religious intent. He agreed and kept his word, as he quickly took me through the most basic rituals.
  • When I was away and in the river taking bath, the shastri told one of my uncles that I’m the types that would’ve dunked ashes online if that were an option.
  • I had made it clear to my relatives that I find most of the post-death rituals extremely depressing and so I didn’t wnat to engage in anything beyond the most basic stuff. This meant that at the end of yesterday’s rituals I’d to discard my procedural “tools”. The “paatrams” were given as a gift to the shaastri. The sacred stone was thrown backward in the river. And when I was bathing after the rituals, I let the river wash away the highly starched procedural dhoti

    Once that was done, I uttered a silent apology to the river for polluting it

  • Having been through all this once before, I knew what to expect and so was completely in control of the situation. This helped me manage my relatives better and have my way.
  • Having my way meant occupying the relatively comfortable front seat in the sumo while my senior citizen uncles struggled in the back due to lack of leg space. “This is even worse than an aircraft”, a former-HAL-employed granduncle told the driver
  • To help ease the situation for myself and distract myself, I live-tweeted the journey. And to further distract myself, I tried to tweet like Tharoor.
  • There was a fair bit of pollution involved in the ceremonies. A fair bit of plastic was used, and all got dunked into the river. Extremely sad stuff but I couldn’t really do anything.
  • I wonder why the urn of ashes is thrown backwards into the river. You stand on some rocks facing away and then chuck the thing backwards. I wonder what the significance of this is.
  • Looking at the general crowd there, I was wondering if death is a profitable business.

Hospital Issues

There is one thing that I haven’t managed to understand about Indian hospitals – it is the dependence on patients’ attendants. Every patient is required to have an attendant next to him/her all the time. In case the attendant is going out, he/she has  to literally take permission from the nurses. Full time, it is the attendant’s job to monitor the patient and alert hte doctors/nurses in case something goes wrong. And the main job of the attendant is to bring medicines.

Yeah, you heard that right. Most hospitals here have attached pharmacies, and the usual practice is for the doctor/nurse to scribble down a prescription which the attendant has to fulfil from the hospital’s own pharmacy. I find this practice weird and ridiculous, and wonder why the hospital cannot short-circuit the attendant’s role and then finally bill the medicines to the patient along with the rest of the bill.

Over the last couple of weeks when my mother has been in ho0spital, I’ve found myself being woken up at all times – including 1 am and 5am to go get stuff from the pharmacy. Sometimes it’s been as trivial as a syringe. Usually it’s a much longer list. Such a long list that given the crowd at the pharmacy, it’s impossible to check if the pharmacist has given you everything he’s billed you for. And in the wee hours of Tuesday morning when there was an emergency and my mother had to be shifted to intensive care, the first thing the people there did was to give me an extra-long list of stuff to get from the pharmacy. This was at 3am.

I wonder why this practice came about, and why it still exists. Is it to facilitate easy transfer pricing for the hospital? Is it t give some sort of transparency to the patient about the medicines being given to him? If the latter, can’t the patient just sign on the prescription authorizing the hospital to procure the stuff from the pharmacy? And given the monopoly power that the hospital’s pharmacy has, service is usually slow and inefficient, thus leading to long queues. And in such scenarios, it’s not easy to actually check if you’ve received everything you’ve paid for. And on top of this, you have the hospital giving multiple prescriptions for the same non-consumable thing, maybe just hoping you don’t notice.

And then there is this thing about the attendants. Thankfully we have enough extended family here in Bangalore that it isn’t hard to find volunteers to do vigil at  the hospital when I’m away at work or other things. But what if we were in a place with no relatives around? Or if the patient were living alone in the particular city? How would the hospital handle this? Would they make the patient himself run around to get medicines?

Whenever I think about these things I tend to get extremely pissed off. The hospital has been otherwise good. The nursing staff are all very nice and never crib. The hospital is maintained extremely well and is clean in most places. There are enough duty doctors at all times. And then they expect an attendant to be with the patient. And the expect the attendant to run around all the time to fetch stuff from the hospital’s own pharmacy.

Breakfast at Maiya’s

It is incredible that a South Indian restaurant in South Bangalore can charge forty rupees for a plate of idli-vada, and not just get away with it, but also run a full house. By the time I was getting out of Maiya’s (in Jayanagar 4th block; I’d written about their dinner earlier) it seemed like the first floor was already full and people were being directed to the seating area on the second floor. Apart from these, in a separate area on the ground floor, there is a breakfast buffet (priced at Rs. 125 on weeekdays and Rs. 150 on Sundays).

The food was good but nothing exceptional. Perhaps I don’t find it exceptional since a lot of my South Indian eating out happens at one of the Vasudev Adiga’s restaurants, which I believe are significantly superior to the other “Darshinis”. The food at Maiya’s was approximately of the same standard as that of a Vasudev Adiga’s, and the coffee (served in a silver tumbler) was incredibly superior. And the place was full. I didn’t bother to exactly estimate the capacity of the place but I think the hall seats around 100 people.

The service was good and quick (except for the coffee which took an hour to arrive), and the waiters weren’t overbearing (unlike those on the third floor where I’d had the silver thali last month). It perhaps gives an idea as to what Adiga’s might have been had it gone into the business of running sit-down restaurants. I haven’t tried making an estimate of the finances, so I don’t really know how well it works out financially to have a sit-down restaurant priced at about 100% premium over similar food at fast-food joints.

The success of Maiya’s in Jayanagar also gives us an indication as to what my neighbours the Kamats (of Yatri Nivas, Lokaruchi, etc.) have missed out – having held a virtual monopoly over sit-down south indian restaurants over the last ten years during which most other sit-down places were downing their shutters and most of the new upstarts have been stand-and-eat types. If only the Kamats had been able to get a hold on their quality, they probably wouldn’t have had to go into the business of Chinese restaurants (chung-wah-opus in Jayanagar 3rd block) or capuccino shops.

Also, Maiya’s is what I call as a “full-service restaurant” – one that serves food throughout the day – as opposed to Darshinis which are typically breakfast-and-evening-snacks focused, or the fine dining places which do only meals. What that allows the Maiyas to do is to maximize their usage of space – since they will be using the same seating infrastructure throughout the day. I remember saying a couple of years back that darshinis should have a time-share arrangement with fine-dining places.

Another nice feature at Maiya’s is the tables. They have a large number of tables which can seat two people across, and which have been designed so as to easily join them to other tables. The chairs are also simple and light and can be moved around. This allows the restaurant to easily reorient the tables and chairs depending upon the size of various dining parties, without resorting to making people share tables with strangers (common practice in south indian restaurants).

Today probably the restaurant was relatively lean, so my mother and I got a table for four (basically 2 tables joined together). However, if the restaurant had reached capacity, I’m sure they’d’ve yanked off one of the tables and given it to someone else.

The food is good but not spectacular, but you can sit down and eat. Go on a weekday when it is not crowded, and you’ll enjoy it. Don’t botehr waiting in line to get in to eat on a Sunday – you might as well take a parcel from the nearest Adigas and eat at home.

2 plates  2-idli-1-vada             2 * 40          Rs. 80
1 plate  rava idli                         1 * 25           Rs. 25
1 coffee (silver tumbler)        1 * 15            Rs. 15
1 tea (silver tumbler)              1 * 15            Rs. 15

———————————————————

Total                                                                   Rs. 135

Tips not accepted.

PS: On the ground floor, at the side, they have one stand-up coffee shop, which operates between 6am and 8pm on all days of the week (the restaurant is closed on Mondays). Absolutely brilliant coffee. Among the best I’ve had in Bangalore. I would recommend you to try it out the next time you pass by the area. Rupees ten only.

Traffic signal policy

Is it fair on the part of the city government to direct people’s choices of routes by imposing a suboptimal timing plan on a traffic signal? Or is the government supposed to respond to demand and design the signals looking at the traffic in various directions? Which is supposed to lead which? Which is the hen and which is the egg?

Yesterday I passsed the airport road – victoria road T-junction on the way to office and noticed that the average perceived waiting time on the Victoria road side was significantly higher compared to that of the two branches of the Airport Road meeting there, which was clearly inefficient. Though it is very likely that it has come about because of a generally poor design of the signal, it could also be by design – because the government wants to disincentivize people from using that route.

Given that we are not yet at the libertarian ideal of  “private roads for everyone”, in most municipal regions, the government has the responsibility to build and maintain roads. And given constraints such as the Braess’s Paradox, occasionally it might actually make sense for the government to occasionally direct traffic, rather than leaving it for a free-for-all. I suppose efforts such as converting roads into one-ways are in the same direction.

So given that the government has the monopoly to “give” roads, does it have the right to “take” away roads? If it does, it means that it is effectively trying to control how and where people move. Isn’t that against stuff like freedom of movement? It’s kinda scary.

But if the government doens’t have the right to “take away” roads, what happens to stuff like one way roads, etc.? After all, when you make a road one way, you are imposing a higher cost on certain people (who are willing to brave the heavier traffic in order to move in the “opposite” direction so that the total cost to society at large goes down. Sinilarly, when you put a road divider, you cut off access to certain intersections which would have been very convenient for some people in the larger interest.

So does an elegant solution exist to this problem, assuming that we cannot put tolls on all roads? In principle, putting tolls on roads is fair because we are already taking toll from motorists in non-monetary ways – such as by not maintaining the road, or by subjecting them to too many intersections, or by allowing so many vehicles on the road that reduces the speed of the road. Given all these costs that are imposed on motorists, monetizing them is not tough in principle.

However, politically it is a huge issue and is unlikely to happen for several years to come. In this context, does there exist an elegant solution to traffic management and regulations, that can compensate for inconvenience caused to people in the name of interest of the society-at-large?