Tourist Cab business-economics

Having booked outstation cabs for self/family across Tamilnadu, Kerala, Orissa, Bengal and Maharashtra, I thought to write some points on the business model. Usually, the pricing starts from Rs 9/10 per km for a round trip with min 250km/day. Add more for bigger vehicles, and sometimes an extra payment for the driver's food/stay arrangements. Obviously, toll/parking/interstate permits is extra. If one prefers self drive, then Zoomcar offers pricing starting at approx Rs 16/km(if one uses the 10km/hr option for Sedan on Sat-Sun, with Rs 12/km for extra kms). Here, it is actually costlier than usual cabs but ok for those needing err.privacy.

Anyways, I hired a car from Kochi-Munnar for 4 days. The package was Rs 7000 for 4 days, with 500km included, and driver's cost all included. At the outset, he filled his diesel tank for 33.3litres paying Rs 2,000. The tank was only 75% depleted at the end of the 450km long trip, implying a mileage of 18km/litre for 25lts. Assuming Rs 1500 for fuel, and Rs 250/day for driver stay and meals(so Rs 1000 for 4 days), the driver still earned Rs 4500 for 4 days towards his profit/salary/car hire costs. The vehicle was an Ertiga for which 5yr EMI will be Rs 17500/month for a Rs 8.6onroad price. Hence, assuming 60% utilisation or 18days/month, Rs 1000/day goes towards that. So actually, not much profit there. The real juice comes when the driver gets tips or increases utilization. 

With marginal cost of fuel only around Rs 3-4/km, why is there not a price war like seen in local taxis(ola/Uber). Even Savaari was costlier than the local operator who serviced us, even after the Rs 5000 discount on the rack rate. Reasons for this is usually low utilisation, tourist fleecing/oligopoly etc. 

In this market however, innovations appear confined to service quality and not to business practices like garage-garage(instead of point-point), and pricing. The claims of Droptaxi/Onewaytaxi and others(https://timesofindia.indiatimes.com/business/india-business/pay-only-one-way-to-cabs-for-outstation-travel/articleshow/59059749.cms) are not realistic since hardly anyone confirms the pickup in advance. Unless you are ok to change your plans in the last minute(say backpackers), this won't work when you wish to take connections. 

Also, as mentioned in this post(https://scroll.in/article/807342/unfair-competition-how-uber-and-ola-are-killing-livelihoods-of-mumbais-auto-and-taxi-drivers) the long distance fares(>25km/full day rental) are now the domain of app based aggregators like Savaari, Ola Outstation etc. So the local taxis are in the death spiral of smaller distances-less profitability-lower earnings-demand/need for fare hike-demand compression for long distance travel etc.