Monday, July 31, 2006

Calculating Fairness

Probably the most difficult thing here is the transaction costs--particularly cab fare. For many things there is no established price (although the grocery stores seem to have established prices), and so we have to figure out how to negotiate a price that is "reasonable."

I've often had discussions with my business undergrad students about what is a fair wage, and how big should the gap be between managers and workers. Business students easily argue that managers should be paid considerably more than workers. After all, they're planning to be managers one day. Sociology students are not as sure of this, and often feel the gap should be smaller than it is. They're also not planning to be managers.

Here on the ground in Kenya, we're confronted with the fact that what a Kenyan can afford to pay for services, and what a Canadian can afford (even relatively poor students) is quite a bit different. The people who live here know that as well. We're easily recognized as "tourists" (even though we're not tourists but volunteers) by our skin color--and so people here expect that we have lots of money, and should be willing to pay high prices for things.

Our major negotiations to date have been over cab fare. There are no metered cabs, so you have to decide on a price before the cab sets off.

Last evening, I had to make arrangements for our transportation to and from "school" every day. ("School" representing a tiny room over in the slum that has been rented to us so that we could conduct our workshops for the next 2.5 weeks). Several of the students were willing to take the mutatas--the little buses that serve for public transportation here. My view was that this was somewhat impractical. The buses look new and clean, but they only hold 14 people, and there are 7 of us. And every one that I've ever seen on the street has been full. So, I wanted to try to negotiate a van that would take us back and forth each day.

I'd been given various pieces of advice on what to do on this front, and it's hard to know what the right thing to do is. I had met a driver when I first arrived who who had offered to be my driver while I was here. I was open to that idea, because at least I'd met him, and interacted with him several times. And he was very respectful, calling me "professor" whenever we talked. It's always hard to know who to trust in situations like this, so you look for kindness in people.

One of the professors at the University of Nairobi whom I met the other day did not think that hiring one driver was the preferable way of doing things. He felt that a van marked with a tour company logo could signal to the people in Kibera that we have lots of money, and don't really want to mix with the local people, which is inconsistent with the reason why we're here. Also, he noted that drivers for the tour companies already have some guaranteed income, through the tour operations. So his thinking was that it would be good to spread our Canadian money around to help as many people as possible.

The problem with this strategy, even if I'm in agreement with it in theory, is that it is not necessarily totally safe for us to be standing at the edge of the slum, waiting for a cab that may or may not pass by. And now, having been there today, I realize that cabs would be very unlikely to be "just passing through." Even if they did, we'd be more at their mercy when we're out at the slum and have to get "home" than when we're at the hotel, and can just walk away from a fare offer that we don't like. Which is why I'd prefer some stability to the transportation system.

The hotel did not have a van available at the time that we needed it, but they offered to get us 2 cabs (because there are 7 of us), for a total of 2400 Ksh round trip. I tried to explain that this was far too steep, and that when I met with someone from Catholic University here, and asked what the "local" price for this trip might be, he felt 600 Ksh was probably the local roundtrip price. So you can see how much more was being asked of us.

By then it was 8:30 p.m., and I'd promised the students that I would take care of the transportation arrangements for the morning. After some agonizing, I decided to just call Amos, the driver I'd met earlier in the week, and see if I could strike a deal.

Before calling Amos, I did a fair amount of research so that I could formulate some "theory" for what fare I might like to pay. My research showed that the average annual salary for Kenyans is about $450 US. Obviously the average doesn't tell the full range of salaries, and I was not sure whether this figure was conditional on working at all, or was simply a figure that included all men, women and children. Still, it gave me some baseline to work with.

I finally reached Amos, and offered him 700 Ksh roundtrip. (Ksh stands for Kenyan shillings--about 75 shillings to the $1, so 1000 Ksh is about $14. This assumes that Cdn and US dollars are worth the same, which they are not, but we don't need to complicate the math. In the grand scheme of things, there's not enough difference to make it matter for our purposes.) He countered with 1000 Ksh. I said that was too high, but I was prepared to give him the job for a week at 700 Ksh per day if was willing to accept that price. That was interesting to him, but he suggested 800 Ksh per day. So, I said that the job might continue for the following week, but we wanted to pay 700 Ksh per day. If it was 800 Ksh, at the end of the week, I would look for another driver. We finally reached agreement.

So, back to the issue of fairness. What is a fair price for a taxi ride for 7 people doing volunteer work in Kenya, 6 of whom are students, and are paying about half their travel expenses out of their own pockets? My offer to Amos is basically the equivalent of $56 for the week. He will be doing about 30 minutes of driving per day for us. So he has additional opportunity during the day to drive other people, and make more money. If my research on annual salary is correct, the average person earns only $8.65 a week, for more hours per day than the 30 minutes that we're employing him for. That said, a cab in Vancouver, with one round trip per day for 5 days would probably cost me $100. Easily.


Posted by Nancy Langton

No comments:

Post a Comment