Fixed Price versus Time and Material billing

You know in Bangalore you can buy a Pre Paid auto ride from station to anywhere in the city.

You just buy a token for 1 INR to ride and pay the amount at the end of journey.

This is Fixed Price, you do not care which route the driver takes and do not try to influence him in anyway. If you are lucky you get a driver who knows the route and you reach your destination safe.

In some rides something interesting happens during the journey, you will get to know a totally different alternate route to the destination that you have never tried before or aware, it also happens to be the shortest. The shorter the route the better it is for the driver in terms of ROI.

Even if the driver is no genius or mostly does not know how to collaborate with you or the city, you won’t make a loss, till he gets to your destination, as all effort and expenses are the drivers’. But you will still lose time.

But the journey back from anywhere in the city to station is never pre-paid and it is a journey in which the meter is running, and you as a rider is managing which way the auto is going and trying to optimize your journey for less time (lesser traffic signals) and fare (shortest route).

Remember you don’t have control on the meter, you are less likely to get a heart attack by just believing it is a honest meter, but you have to pay what it shows at the end of the journey. The return journey to the station is TnM model (Time and Material).

You can think of yourself as a success when you can beat the pre-paid amount on the return journey. But remember there is always a better route home with another genius auto driver.

Image Credit Autorickshaw 2 by Knile


2 thoughts on “Fixed Price versus Time and Material billing

  1. Swaminath says:

    🙂 There are few other classic scenarios you missed. The Auto driver takes you to the right place in a wrong route/ a place which is at far end of the place mentioned in receipt on a prepaid auto and when you are about to get down he shouts in front of public and demand X amount on top of what is in the receipt. To save your image – you tend to pay more! Is that called CRs?

    You being a smart guy even before the auto driver starts shouting, you start the music stating the guy wasted your precious time by not taking you in the right route and make him beg for his bill amount. Is that called ‘Perceived Quality’ issues?

  2. muralidharanl says:

    Thanks for dropping by, I guess the analogy can be extended all the way from bid to warranty,
    With all the service delivery complexities.

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