BANGALORE: IT and BPO firms are preparing belt-tightening measures as cab operators in India’s technology capital, Bangalore, say a hike in rentals is imminent to compensate for higher prices of petrol and diesel.

The use of larger vehicles to accommodate more passengers, a reduction in the number of routes and cutting down on the use of personal cars are among the steps being contemplated by companies, which are already battling hard to maintain margins in the face of slowdown in the US, their biggest market.

The IT/BPO industry employs nearly six lakh people -- about a tenth of Bangalore’s population -- and relies heavily on cabs to ferry employees to and from work, not wanting to trust the city’s dismal transport infrastructure. Some 27,000 vehicles criss-cross Bangalore every day to transport staff working in the industry.

“Yes, we will increase rates. Its part of the contract with BPO and IT companies. We can’t say by how much, but it should happen in 2-3 days,” Bangalore Tourist Taxi Owners’ Association vice-president B G Shivanna said. On an average, cab operators have increased hiring charges by 23 per cent in the last two years to keep pace with higher fuel costs, he added.

Spending on transporting employees constitutes 10-15 per cent of total costs for small and mid-sized companies, while larger ones escape with a lot less, he said.

The larger ones, such as Infosys and Wipro, actually empathise with the plight of the government which they say has been compelled to raise fuel prices -- even as they chalk out plan to minimise the burden they will have to bear.

“It is a good thing that has happened to the country. The government raised prices before it became too late. The extra cost of transportation will have to be borne by us. We have an ongoing process to reduce unnecessary travel and use video-conferencing instead,” says Infosys Technologies HR head Mohandas Pai. India’s second-largest software exporter hires 4,500 cabs to ferry employees of its BPO arm.

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