I say that real chauffeurs working honestly for the good of their employers together with a masterful mechanical knowledge, which spells ‘success’ are as rare as roses in December and snow in July; but this kind of chauffeur is in great demand by thousands of experienced owners, and when so proven, are paid double the average salary." So wrote W.J. Foster in a New York Times article in 1910 supporting the introduction of licensing. A century later, as I struggle to find a competent driver, these words seem to aptly apply to the situation in most Indian cities today.

Travelling in Indian cities is becoming increasingly stressful. Driving is even more so. Traffic jams coupled with poor quality of roads have forced more and more car owners in Indian cities to employ full-time drivers. However, the average quality of drivers available for hire is so bad that at times one is even more stressed out by availing their service! This is another industry in India which has unleashed employment opportunities for many but faces an actute skill shortage.

Illustration: Jayachandran / Mint

Skill is an ability to perform a task at a certain level of competence. A skill shortage occurs when the demand for workers who are qualified, available and are willing to work under existing market conditions is greater than the available supply. What are the skills required to be a professional driver? Adequate training in the driving craft along with proper certification, sufficient knowledge of the vehicle and basic mechanical knowledge are the minimum skill requirements.

In addition, as in any other profession, experience, credibility and reliability are highly desirable qualities. Since most of the time drivers work with little supervision, they must also be responsible and self-motivated. Lastly, as in any other high-contact service industry in which customers directly interact with service providers for an extended period, it helps if the driver is pleasant and has good communication skills.

In general, technical skills can be acquired through formal education and training. Driving skill is no exception. However, as in the case of a number of other occupations, one leaves a driving school with little true skills. With demand for drivers far outstripping supply, driving schools have mushroomed in all major cities in India. These schools charge a fee with the promise to buy you a driving licence irrespective of the outcome of the driving test, or worse still, even without appearing for one! As a result, incompetent and inexperienced drivers have flooded the market, wishing to cash in on the boom. The truth is that a majority of so-called drivers on our roads with valid driving licences are not fit to drive.

In practice, the quality of a driver is difficult to ascertain a priori. As a result, potential drivers have an incentive to exploit their informational advantage to the detriment of their customers as well as of their higher-quality counterparts. As pointed out by Nobel Prize winning economist George Akerlof in his seminal 1970 paper The Market for “Lemons": Quality, Uncertainty and the Market Mechanism, information asymmetry generates a market equilibrium where lower-quality workers exert a negative externality on their higher-quality counterparts, depressing both the quantity and quality of the service. Given this problem, drivers who come with a good reference are in great demand. A good reference reduces the search cost for potential employers, i.e., the time required to advertise, screen applications, interview potential candidates as well as the loss of one’s own output during this period.

Alternatively, a number of car owners nowadays prefer to hire chauffeurs on an hourly basis as and when required, which allows them to remain in the comfort zone of their own car and at the same time minimize the cost of search. It is easier to put your faith in the hands of a reputed company which offers an affordable personal chauffeur service on a pay-as-you-go basis, 24 hours a day, seven days a week.

How do we tackle this problem of skill gap in the Indian chauffeur industry? Skill shortage in this industry is demand-driven and is likely to increase over time with the growth of the middle and upper middle class in India. The issue is how to increase the supply of skilled drivers. It is indeed true that a lot of so-called technically skilled professionals in other occupations also learn little about their craft during formal education. They learn on the job. Employers, facing skill shortages, are ready to hire formally trained but mostly unskilled workers and then provide them with relevant training.

This is not a sensible option in the chauffeur industry, however, because the consequence of such a decision can potentially be life-threatening. The only solution is to increase the supply of skilled drivers by increasing the quality of training and certification programmes. Is this likely to happen in India in the foreseeable future? I have my reservations. Until then, I wish all potential employers the very best in their search for a competent driver.

Vidya Mahambare is senior economist at Crisil Ltd. These are her personal views. Comment at theirview@livemint.com