Analysis of the economic and social parameters of the three-wheeler taxi service in Sri Lanka

Abstract

Sri Lanka has an extensive Three-Wheeler Taxi service comprised of around 300,000 vehicles. These vehicles, which first made an entry to Sri Lanka’s roads in the early 1980s, account for around 15% of the active motor vehicle fleet at present. Three-Wheelers Taxis also account for around 6% of the passenger kilometres. These vehicles are mostly individually operated with some owned by the operator and others hired on a monthly or daily basis. The industry is unregulated with vehicle registration and driving licenses being the only instruments of regulation. Fares are unregulated. However, most operators belong to associations which are loose collections of operators found in a given locality. These associations impose a degree of self regulation with respect to fares. They also tend to demonstrate oligapolistic behaviour. The paper is based on a survey of 200 operators and 100 passengers from a Divisional Secretariat area in Colombo District. The survey covered a number of details pertaining to ownership, management and fare structures, as well as opinions on the service attributes by users. The survey also covered perceptions of operators to determine the social, economic and transport implications of the services provided. Details were also obtained on the profiles of the operators and their expectations. The paper provides the results of the analysis of this data and draws a number of conclusions on the economics of the industry as well as the social aspects associated with it. It also discusses the characteristics of the users of these three wheelers as well as their typical use. The analysis also investigates complementarily of service provision between three wheelers as an access mode to buses and railways. This analysis has been used to develop an understanding of the manner in which the industry has grown over the last two decades and how it is being operated today. It also identifies areas wherein the industry has become inefficient and assesses the degree of over pricing that exists due to this. The data also helps to determine the relationship between unemployment and provision of self-employed transport services. The paper concludes with a synopsis of the profile of the industry and its role within the wider transport sector and with respect to ownership. It also discusses the positive and negative impacts of the lack of regulation on the industry.