Mr Smith and Mr Ricardo

Today Marcus, Ariel, Mary and I wanted to get from Jaljog to the FSD office and our homes—three separate places. Although we have a sense of how much to bargain for individually, we weren’t sure what price to aim for since the rickshaw driver had to drop us off at multiple places. I drove a hard bargain. I guess that’s because I’m penny pinching; I want to make sure I get my money’s worth.

The first two taxi drivers—they’re actually rickshaws but I found out today that they’re called taxis in Jodhpur—that passed us charged us a starting price of around Rs 100, so we let them go. Marcus argued that since he paid Rs 60 to get from the FSD office to Jaljog, Rs 100 was reasonable, but Mary and I thought it was too expensive. The third taxi drivers’ starting price was Rs 60, and I was going to bargain it down to Rs 50 when Marcus stopped me. “C’mon, Rs 60’s a good price for three places.” So we boarded the taxi.

We stopped first at my neighbourhood, and after I got off I remembered seeing a taxi leaning against one of the houses in the MSS girls’ colony [neighbourhood] when we visited them yesterday. Little kids tumbled out of the taxi, playing with the horn, squealing in delight. “Probably one of the fathers’ taxis,” Vijay commented as we walked to his car.

Did I have to drive such a hard bargain? The argument is that a taxi driver wouldn’t agree to that price if he didn’t benefit from it, and the market works efficiently when the marginal benefit (the additional Rs 60 earned) equals the marginal cost (the cost of driving the taxi from Jaljog to our homes and the FSD site). Profit is squeezed out and the consumer is not exploited.

But this theory doesn’t take into account producers being exploited. Also, markets don’t work efficiently already, and efficiency is not the same as equity.

I think there is room for some extra taxi fare.