Why is IRCTC asking for Aadhaar?

Recently IRCTC made linking an Aadhaar mandatory for booking more than 6 tickets a month.

And when residents asked “Why?” there was no convincing answers.

What would be the reason why IRCTC needs Aadhaar for railway booking? It is complicated and is not related to surveillance at all.

IRCTC Business model

There are two basic problems in the Indian Railways business model.

It always loses money on most of the passenger fares. But it makes decent profit on some of the passenger fares in trains.

Why can’t it become a pure for profit entity? Social obligations as explained in their blog which impinges on the economic viability.

The social service obligation implies that they have to be accessible universally and just cannot pick and choose their users which requires access to ticket booking. One model they chose to make ticket booking facilities available everywhere is via bulk booking service by agents.

The bulk booking agents work on commission and actually have a different login experience and can book unlimited number of tickets and don’t need an Aadhaar.

On routes that are profitable, demand far outstrips supply. While it introduced dynamic pricing for combating the problem, it still left one big hole in the story, the bulk booking by agents.

Gaming the bulk booking

Given the supply demand gap on some key routes, arbitrage opportunities exist for booking agents. If I want to get a ticket on these routes urgently but can’t find a ticket, I can go to the agent and get the same ticket for a markup. The markup can be as high as 3X on certain occasions. But then how come the agent can give the ticket?

The agent pre-books it under a fictious identity and gives me that ticket. As the printed ticket can be in anyone’s name and one has to show an ID when a ticket collector comes and checks the ticket the booking agent also offers another service.

They will also give you a fake ID with your photo but with the name of the person on whose name the ticket is booked. This can be done with any ID proof but since IRCTC accepts Aadhaar printed on a piece of paper which is easily forged, the agents prefer this the most.

The agents then went one up on this game by creating multiple fake IDs in the IRCTC online booking system for arbitrage pricing, which also got eventually busted.

Perils of Dynamic pricing

IRCTC tried to counter the gaming by limiting the number of ticket to six per month in their portal by figuring out that 90% of accounts do not book more than six per month.

But what if one is not an agent who is trying to game the system but instead travel more than six times a month? The answer is “Know Your Customer” and ascertain if it is a real person or a fake person.

Since everyone has got it into their heads that a real person will not have more than one Aadhaar number, the solution was to do a eKYC through Aadhaar linking for those who need more than six tickets a month, which they believe will reduce the ticket cornering employed by those who will engage in arbitrage pricing.

While the Rail ministry really want the arbitrage pricing themselves via dynamic pricing they are not good at doing it even for trains that are on demand.

Conclusion

Let us recap the story so far:

The response of an organisation that is caught between all these opposing forces is usually to do something or anything to improve the situation via innovation (Whatever that means) and the solution is usually Aadhaar.

We can now finally understand why IRCTC mandated Aadhaar eKYC. It is not for surveillance but as a half baked solution to their impossible situation of having to balance the conflicting forces of social obligation and viability.

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