Orange optics

The headline grabbing Yellow cab scheme or the Rozgar Scheme or the now called Orange Cab Scheme is here. Same scheme in a different colour. But, what’s in a name? A rose by any other name would smell as sweet, right. Comical analogies aside, pre-budget the government of Punjab tweeted that the Orange Cab Scheme will be launched with 100,000 cars given to unemployed youth. Post-budget, this number is 50,000.

Now there is a lot of confusion as to what this scheme actually entails. The scheme provides mark-up free loans to purchase different variants of small cars (this time probably Mehran and Bolan, even Wagon-R). The FY15 Rozgar scheme for instance offered Bolan and Ravi under a standard lease agreement with the Bank of Punjab (BoP). The award is given to unemployed youth—who can prove that their household income is less Rs100,000 per month, after going through a computerized balloting process.

According to the Punjab government portal, the yellow cab scheme provided 20,000 Mehran and Bolan and also provided training to the youth during FY12. The Rozgar scheme gave 50,000 vehicles.

While this bodes well for Pakistan Suzuki (PSMC) which will benefit from this scheme once again and remain ahead of the curve—in FY15, the new sales added Rs22-25 per share to the company’s bottom-line, according to analysis from Arif Habib. But much like other schemes of this nature, the orange cab scheme is fairly elusive.

It looks good on paper—one can say, between FY15 and FY18, the government of Punjab essentially provided the means of employment to 100,000 individuals. It is excellent from a marketing stand point also, pegged to buzz words like “youth employment”. On the other hand, it will always remain an orange car running down the roads of Lahore, with the stamp of Punjab government on it. It is a fairly restricted way of acquiring an asset.

Can these cabs register under the latest car sharing apps (which are slowly eroding the market share of regular taxis) and which give a healthy benefit structure to vehicle drivers and owners? It is unclear. Can the buyers exchange the car with an upgrade that is a usual practice when you are leasing a car? Definitely not. There is a restriction on changing the colour or modifying the car (at least it was under the Rozgar scheme) lest you or the world try to forget the Punjab government subsidized it for you.

The third important question is, where is the data? How does one analyze the efficacy of a scheme without any data? How are we to know that so many youths in fact gained employment? What are the tracking and monitoring mechanisms? This is why the initiative of the Punjab government to digitize the process of application is a positive first step. It will help them to document more effectively and even monitor what happens once these cars are in use, if impact assessment is an objective for them, which it often is not. Let it not be all just about the optics.