For more than two decades, Delhi’s autorickshaw landscape symbolised a classic governance dilemma: the state had a rule, the public had a need, the technology existed and, yet, nothing worked. The law clearly required autorickshaws to ply by the metre. Fare charts were updated periodically, enforcement drives were announced with ceremony, and the transport department frequently issued warnings. But on the ground, compliance was largely the exception. The typical Delhi commuter knew the routine: drivers refusing short trips, demanding flat fares far above the prescribed rate, bypassing the metre entirely, or claiming it was ‘not working’. The problem was not a shortage of rules. It was the absence of an effective mechanism to enforce them.
This is where the story takes a surprising turn because the eventual solution did not come from more policing, bigger penalties or stricter diktats. It came from the market — in particular, from the rise of app-based mobility platforms such as Uber, Ola and Rapido that introduced transparency and enforceability through design rather than through force. Delhi’s autorickshaw problem is ultimately a lesson in how the architecture of incentives matters far more than the architecture of regulation, and how markets, when properly structured, can fix what the State persistently struggles to.
To understand the transformation, one must first examine why the earlier metre system collapsed in practice. The state’s enforcement capacity was perennially weak relative to the scale of the city. Random checks by transport officials were scarce, easy to evade, and vulnerable to rent-seeking. Autorickshaw drivers, operating on thin margins and often renting their vehicles on daily contracts, faced powerful incentives to maximise each fare. In a street-hail environment, the balance of power lay squarely with the driver: the commuter had limited alternatives, little information, and no recourse. The result was a textbook case of information asymmetry and concentrated bargaining power at the point of transaction.
Attempts at reform did little to change this. Fines rarely altered behaviour. Crackdowns temporarily improved compliance, only for the old patterns to re-emerge. The state’s intervention thus became ritualistic rather than transformative — a cycle of announcements, disappointment and relapse. Crucially, the system offered no means of monitoring routes, verifying distance travelled, or ensuring fare accuracy in real time. Without information, enforcement was destined to remain ineffective.
What the app-based aggregators introduced was not merely 'online booking'. They fundamentally changed the structure of incentives, information and choice. First, they eliminated bargaining by providing upfront pricing. A commuter knows the fare before accepting the ride, and the driver cannot revise it midway. This single change removed the core point of friction that had plagued Delhi’s autorickshaw market for years.
Second, GPS-based route tracking transformed enforcement by making the entire trip verifiable. Detours, inflated distances and route manipulation, once nearly impossible to prove, became visible, recordable and contestable.
Third, digital payments and automated receipts ensured that a commuter had a documented transaction. This replaced the old system where disputes rested on memory and assertion, with virtually no evidentiary trail.
Finally, and perhaps most importantly, the platforms introduced a reputational enforcement system. Ratings gave passengers a voice and drivers a real stake in good behaviour. A low rating could mean reduced trips or even deactivation, a far more potent deterrent than a rare encounter with a transport inspector.
These four features — transparent pricing, trackable routes, digital records and reputation — together solved a regulatory challenge that decades of State intervention had failed to address. The market did not 'replace regulation'; it embedded regulation within its own design.
The shift in commuter behaviour is instructive. During strikes or major disruptions, when app availability temporarily declines, reports routinely show street-hired autos returning to overcharging and rejecting metres. Yet when apps are functioning normally, commuters overwhelmingly prefer app-based autos because they offer predictability. Indeed, studies of urban transport across India consistently show that riders perceive app-based trips as fairer, more convenient, and more transparent compared with traditional hailing.
Competition among platforms has also played a role. Even when prices fluctuate because of demand algorithms, commuters still benefit from choice: price comparisons, route accuracy, safety features and documented grievances have produced a more accountable mobility ecosystem than existed before.
It is equally important to acknowledge that the market solution is not without flaws. Surge pricing, though economically rational, often feels unfair to commuters. Driver protests over reduced commissions, opaque pay calculations, and operational costs reveal the tensions inherent in platform-mediated work. These concerns warrant regulatory attention, especially as aggregator platforms become dominant players in urban mobility.
But these imperfections do not negate the central achievement: apps succeeded where the State repeatedly failed, not by overriding regulation but by operationalising it through incentives.
Delhi’s autorickshaw story ultimately offers several important lessons for policymakers. First, information itself is a form of enforcement: no amount of policing can match systems that make misconduct inherently difficult and compliance almost automatic, and transparency is the most effective antidote to arbitrary behaviour. Second, incentives matter far more than instructions; autorickshaw drivers resisted metres because compliance constrained their earnings in an unregulated demand environment whereas app-based platforms aligned interests by linking steady income to platform participation, thereby making adherence to norms commercially rational. Third, the market and the State are not adversaries; the State must set standards, safeguard workers and ensure fair competition, while markets can build scalable enforcement mechanisms and innovative accountability structures that traditional regulation struggles to deliver. Finally, technology is uniquely capable of solving complex coordination problems; when thousands of decentralised actors make independent, moment-to-moment decisions, only digital systems — not manual oversight — can create the consistent, predictable, city-wide reliability that passengers now experience.
What happened in Delhi is emblematic of a broader principle: governance failures are not always failures of intention but failures of mechanism. Where the State relied on inspection, the market relied on information. Where the State relied on sporadic penalties, the market relied on continuous incentives. And where the State relied on rules, the market relied on design.
In the end, the metre was not fixed by a transport department circular, but by a smartphone interface. And in that lies a powerful insight for public policy: sometimes, the most effective form of regulation is one that is embedded in architecture rather than enforced through authority.
Vipin Juneja is Co-founder, Centre for New Economy Research