Socio Economic Aspects of Threewheelers Finalised
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The market is seen as a profitable investment bylocal enterprises and individuals. Thus, hascreated full time and part time jobs.
Perceived higher rates in taxies (cabs) mainlyhired by high income earners and readilyunavailability of taxies are responsible for theemergence of UPTs.
UPT sector is often criticized for severe overloading of the vehicle, dangerous driving habits
and lack of proper maintenance ( Hilling, 1996)
Description of the problem and
its context:
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The total number of trishaws in the countryis rising at a higher rate. It is evident fromthe statistics of vehicle registration and
import statistics Last year about 361,727 three-wheelers
were in operation in the Island
From year 2001 there is a sharp increasein registration with 36,204 in 2003, andagain 43,789 in 2004.(Department ofMotor Traffic)
Description of the problem and
its context: Sri Lanka Case
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Description of the problem and its context:
Statistics on the total Number of Three-
wheelers and the growth of Three-wheelers
2001 2002 2003 2004 2005 2006 2007
112,239 133,115 169,319 213,108 254,193 318,659 361,727
Source: Department of Motor Traffic, Sri Lanka
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Growth of three-wheelrs in Sri Lanka 2001-2007
050,000
100,000
150,000
200,000
250,000
300,000
350,000400,000
2001 2002 2003 2004 2005 2006 2007
Years
Numberof
three-
wheelers
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Growth Rate of three-wheelers in Sri Lanka 2001-2007
0%
5%
10%
15%
20%
25%
30%
2001 2002 2003 2004 2005 2006
Years
Growthrate
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Current Scenario in Sri Lanka
Three Wheeler was introduced to Sri Lanka in
the mid eighties (Samarasinghe, et al 1999).
Since then Three Wheeler has played a vital role
in providing transport to many levels of thesociety.
Three wheeler fares have not been regulated
Three-wheelers, are been used by many stratum
of the society regardless the concern for safety,
comfort, and unfair charges
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Objectives of the study:
Profile socio-economics of the trishaw market
Investigate Key factors given rise to the trishawmarket. (Supply side)
Investigate economic aspect of the market Present statistics on trishaw market
- Growth rate using the data on registration,the import volumes
Pricing mechanism of trishaws (Market hastheoretically characterized perfect competitivebehavior but they exercise monopoly power onpassengers)
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Investigate social aspect of the market
Analyzing the sub-culture arising in the trishawmarket
Investigate on customer opinion on trishaws (whyuse trishaw? Purpose)
Affordability
What drives customer preferences in hiring aTrishaw
Customer Satisfaction
Social Status
Three-Wheeler and city crime/deviant behaviors
Objectives of the study:
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Methodology
Sample: Urban sample (non-random sampling)
- 200 Three-wheeler drivers
- 100 Passengers
Location: Western ProvinceMoratuwa
Municipal
Data Collection Tools: questionnaires, in-depth
interviews, focus group methods and participantobservation method
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Data Analysis
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Trishaw Market Structure
Focused on particular locations whereoperators are collectively sharing aparking place.
Close to a cartelized service provision. Some trishaws are registered to a
particular park
Provides sufficient information regardingtheir unionized operation with powerlimited to the particular park.
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It is revealed that 74% of operators
interviewed are registered to a particular
park while the rest is not registered but still
they are in operation.
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Consumer Base of Three-wheeler
Market
Allows marketers to give different choices to the
targeted consumers with discriminated prices
Being an unregulated segment of the public
transport, identified the passengers based onthe frequency of use.
63%of operators responded that most of them
are daily userswhile 22% of operators
responded that most of their customers are use
the service infrequently.
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Market Segment of Trishaw Passengers
112, 64%
6, 3%
, 22%
15, 8% 4, 2%2, 1% 1 daily users
2 weekly uses
3infrequently
users1,3
1,2,3
1,2
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Any marketing strategy ?
Promotion of e-business and telex -business isseen in the organized markets
Investigated the prevalence of such practices
Revealed that 27% of operators give theircontact phone numbers to passengers
(Justified by the statistics of passengers hiringmethod using Mobile phones)
But 73 % of operators do not practice itWhy? it creates an extra journey to pick
commuters
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Openion on Barriers on entry to trishaw
parking place
63, 36%
114, 64%
No
Yes
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Barriers to enter a parking place
the operator must pay the society acompulsory fee
the operator must obtain the membershipof the society
the influence imposed by other operators
The operator must pay to a third person.
Among the reason influence from the otheroperators is significant as per theinformation provided by the respondents.
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Competition in the market
The existence of large number of suppliers
restricts producers to earn super normal
profit in the long run though it earns profit
in the short run.
Existence of large number of three-
wheelers in a particular area may erode
the profitability of the operators
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Pricing the trishaw service
Determination of price of a commodity in themarket is governed by the price mechanism inthe free market
Due to the non existence of exact supply
function, pricing the service is mainly done bythe regulatory body if the service is regulated
But in the case of unregulated transport modes,the pricing the service is determined by the
operator and has the full freedom to charge overconsumers
Therefore the study focused on how the fare isdecided in the market
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Deciding the fare of three-wheeler
service
82, 43%
55, 29%
48, 25%
2, 1%3, 2%
1 Decided by
the operator
2 Decided by
the TW society
3 Decided by
having
discussed
with the
passenger1,2
1,3
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Pricing the three-wheeler service
Price of a good or a service is thesignaling element to the supplier or theproducer in deciding the production
decision Trishaw fare, charged independently by
operators, therefore researched.
Overall it is seen that there is no uniqueprice for the service provided by trishawsand charge passengers at a discriminatoryway
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Fare charged by the operator for 1 K.m
05
1015
202530354045
50556065707580
0 20 40 60 80 100 120 140 160 180 200
Number of drivers responded
farec
harg
ed
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Fare charged by operator for 2 k.m.
0
10
2030
40
50
60
70
80
90
100
110
120
130140
0 20 40 60 80 100 120
Number of respondents
Fare
charged
Rs.
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Fare charged by operator for 3 k.m.
0
50
100
150
200
250
300
0 25 50 75 100
Number of respondents
Fare
charged
Rs.
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Fare charged by operator for 5 K.m
0
100
200
300
400
500
600
0 50 100 150 200
Number of respondents
Fare
charged
Rs.
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Variation of Three-wheeler fare
The fare tends to vary with the distance with
a higher rising trend
Operators charge minimum of Rs. 30 to
maximum of Rs.56 for the first Kilometer, 1
k.m.
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Variation of three-wheeler fare
29.85
50.73 61.46
87.54
42.7166.03
94.76
158.24
55.57
81.32
128.06
228.93
0.0020.00
40.0060.0080.00
100.00120.00140.00
160.00180.00200.00220.00240.00260.00
0 1 2 3 4 5 6
Distance k.m.
Rs
.fare variation 1
fare variation 2
Fare variation 3
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Conclusions on fare
Fare variation is less for shorter Distance Variation in fare rises with the distance.
Since commuters often use three-
wheelers for short distance they are awareof the fare.
But for long distance decision on the fare
is solely taken by the operator.
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Reasons for Discriminatory fare
42% of operators responded that they
raise fare at particular instances
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Occassions of occurance of fare raise
15%
11, 10%
6, 5%
63, 57%
4, 4%
10, 9%
Night time travel
When raining
When other trishaws
are unavailable
When there are more
stopping times while
travelling1,4
6 Other
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Total Revenue and Cost of Three-
wheeler operation
Total revenue of any producer is important
considering a sustained operation
Revealed that the daily income of an
operator on average is Rs 750.
For those operators liable to give a portion
of income to the owners of the vehicle,
Rs 298is required to pay for the owner at
the end of the day.
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Daily Revenue and Expenditure of Trishaw Drivers
0
500
1000
1500
2000
2500
0 50 100 150 200
Number of respondents
R
s.revenue
and
expenses
Daily Revenue
Dail y Expenses
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Total cost component of any production
activity along with total revenue explains
the profit remaining with the producer.
51% of their income spent on fuel, which is
a major component of the operating cost
of a trishaw. Other than fuel, service expenses, leasing
payment and membership fee are the
main cost components of the coststructure.
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Distribution of daily earnings on fuel
and other expenses
51%
49%
% Average dai ly earningspent on fuel
% on other expenses(
services,subsistance,mem
ber fee)
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Need for a pricing Equation under
Regulatory frame work
Thus it is important that formulating a price
equation for trishaws incorporating a
variable for rising fuel prices may prevent
the operators charging excessive fares oncommuters.
It is beyond the focus on this research
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The possibility of regulating Three-
wheeler Service
Researched on the perceived outcome of
future regulation of the operation of
trishaws to avoid unfair pricing practices.
74% of operators believe that regulation
on operation by registration of the vehicle
in a provincial body and issuing a certified
identification to the operator will raise thetrust of passengers.
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But 26% of respondents oppose the
statement with supportive reasoning.
- the commuters may not aware of such an
identity when they hire
- it imposes a burden to the operator in
terms of personal security.
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Opinion on exhibiting the fare list on the
trishaw as a regulatory measure that will
attract passengers was tested.
Installation of a meter indicating fare and
distance was also tested.
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Openion of trishaw drivers on showing a list of
fares based on distance
123, 69%
55, 31%
Yes
No
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Openion of trishaw drivers on installing a
meterbased on fare and distance
129, 72%
50, 28%
Yes
No
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Availability of 2 stroke and 4 stroke
11
32, 74%
2 stroke
4 stroke
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Conclusions
Service is used as a mode of transport bycommuters daily
Barriers exists in the market but confine to a
particular parking place. There exists a competition in the market
Fare is decided by the operator
Fare varies with the distance- shorter distance : smaller variations
- Longer distance : higher variations
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Raising fare is justified with reasoning
Average Total revenue is above Averagethe total costthus operation of the three-
wheelers sustained. But Cost on fuela variable cost - is
significant in the cost structure of three-
wheelers Operators are in favor of future regulatorymeasures
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Thank You
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