After long-drawn-out discussions and debates in various contexts about the regulation of the three-wheeler transport service, the matter has received more attention with the transport authorities vowing to introduce legal reforms that will benefit both service providers and passengers.
This will also rid the service of its informal status. Legal reforms are ongoing, although there are delays, and the plans on regulating the service have received the support of the sector’s unions as well.
The four-decade old service with over one million legally-registered three-wheelers (including those not used for passenger transport) has not been regulated as other transport services. Although a plethora of proposals, recommendations, and pilot projects have been presented over the years, thus far, none of them have resulted in promising changes that made the sector a regulated one.
However, with the recent announcement that the Western Province transport authorities were taking measures to regulate three-wheeler transport service providers within the Province, the same discussion on regulating the service has re-emerged. While legal and regulatory measures are being considered with regard to the registration of passenger transport three-wheelers, making meters mandatory, and maintaining fares at a certain limit, the sector’s unions have urged service providers to ensure fair fares.
Regulation beyond fares
The wider discourse about regulating the three-wheeler transport service, led by the general public, focuses more on the importance of regulating three-wheeler fares. Since 2022, fares have increased by around 200-300%. But, with the stabilisation of the economy, three-wheeler fares have declined to some extent.
Fares may be the main concern of the general public as passengers. However, the general assessment of whether fares are fair seems to depend on only one factor, i.e. fuel prices. There are other aspects of this discussion that have a direct impact on fares. For example, the prices of three-wheelers and spare parts, inflation which impacted three-wheeler operators as any other citizen, safety-related risks faced by three-wheeler operators, and the lack of job security and social security schemes available for three-wheeler operators are concerns that have a direct and indirect impact on three-wheeler fares. In fact, some of these factors have a long-term impact on three-wheeler fares as compared to fuel prices. But, these factors receive very little attention.
More importantly, if Sri Lanka is to regulate the three-wheeler transport service, it is important to understand that regulation goes beyond fares, and that regulation is not a process that is meant to benefit only passengers. Three-wheeler operators’ job security, safety and wellbeing, and financial stability are also key concerns that do not receive adequate attention in the discourse on regulating the three-wheeler transport service. Many three-wheeler operators do not have proper insurance or financial assistance schemes, and there is a complete lack of retirement plans for them, and Sri Lanka is yet to properly specify what sort of standards are needed when it comes to the provision of services.
As has been explained by three-wheeler transport service unions, the successful regulation of the service requires methodically collected statistics about the number of three-wheeler operators who provide passenger transport services and the areas where they are based. In addition, registration with the authorities, preferably an authority dedicated for the three-wheeler transport service, is necessary. Sri Lanka has only taken the first step in registering three-wheeler transport service providers, and many more decisions are yet to be taken. In this process, it is crucial to keep in mind that although fares may be a priority, fares are merely one of the many aspects of regulating the service.
Regulation within the Western Province
While it is true that Sri Lanka has to start somewhere and the Western Province could be a good place to start, as far as regulation is concerned, the Western Province is the area with the least need to regulate the three-wheeler transport service.
There is significant competition among three-wheeler transport service providers in the Western Province, which has led to self-regulation among the service providers and adherence to standards. Most three-wheelers used to transport passengers in the Western Province have meters, both separately installed digital meters and mobile app-based meters.
In addition, a large share of three-wheelers operating in the Western Province have registered with private transport service providing firms such as Uber, PickMe, and YOGO, and these three-wheelers use the meters provided through the respective firms’ apps. Thanks to the use of meters and the competition in the Western Province, many three-wheeler transport service providers charge competitive fares, and passenger friendly service providers are not uncommon. There are more than enough three-wheelers in the main cities and suburbs in the Western Province, because of which passengers have the freedom to choose metered three-wheelers and say no to three-wheeler transport service providers who do not use any type of meter.
However, issues such as overcharging, the lack of standards and professionalism, and various other practical concerns still exist in the Western Province. But, compared to other parts of the country, a significant share of the passengers in the Western Province has the opportunity to choose three-wheeler transport service providers who provide quality services.
However, the competition seen in the Western Province does not exist in most other parts of the country, which places passengers in a situation where they have to pay unfair fares and endure issues and inadequacies pertaining to the quality of the service that they receive. Passengers have to agree to whatever fares set by three-wheeler operators, especially when the bus service in the respective areas is not developed enough to cater to passengers’ transport needs, the lack of three-wheeler transport service providers to compare fares and standards, and when there are no alternatives such as cab services. These issues can be seen in various forms. For example, certain parts of the Southern Province with high tourist arrivals do not have metered three-wheeler transport service providers mainly because meters prevent them from charging higher fares from tourists. Certain parts of the Galle District, for example, do not have metered three-wheelers because meters are not common in those areas and there is not enough competition to create a need for metered three-wheelers.
These are issues that need to be addressed before further regulating the three-wheeler transport service in the Western Province, because they affect both tourists and locals and service providers are far from adopting even the minimum standards relating to fares.
Regulating fares
The matter of regulating three-wheeler fares, one aspect of the regulation of the three-wheeler transport service, has received mixed reactions. Some say that three-wheeler operators should be given complete freedom to set their fares and let competition push them to opt for self-regulation. Some believe that the three-wheeler transport service should be regulated in the same way as private buses, because both are privately-owned and operated passenger transport services. Other forms of opinions have also been expressed suggesting that the Government establishes an authority specifically for the management of the three-wheeler transport service, which includes setting maximum fares.
If the three-wheeler transport service is to be regulated in a methodical manner, ensuring fair fares is one of the key concerns. However, it is not just the passengers that deserve fair fares. Three-wheeler operators, many of whom depend on the income generated through providing transport services, should also receive this fair treatment.
The self-regulation of three-wheeler fares through competition is the best way to achieve this, because it takes into account passengers’ needs, three-wheeler operators’ demands, and other economic and social factors. When the number of three-wheeler transport service providers operating in a certain area increases, passengers get to choose those with low fares and quality services and reject those that charge unfairly and do not provide passenger friendly services, which in turn compels all service providers to provide quality services and competitive fares.
Main cities and suburbs in the Colombo District are a good example. Most three-wheelers have meters, although their fares vary and meters that have been tampered with are not uncommon. However, not all cities in Sri Lanka have such competition, and therefore, it is impossible to expect such a level of self-regulation in most parts of the country. Even if there was competition, the situation in areas such as tourist destinations, where almost all three-wheeler service providers charge similarly high fares, points out that competition does not necessarily lead to fair fares.
Who makes decisions about fares is a question that is yet to be addressed through the Government’s interventions. The one thing that is certain is that no one party should be allowed to make this decision. Perhaps, Sri Lanka can employ the same mechanism used in determining private bus fares where both the authorities and service providers have a say in setting fares. However, as was mentioned above, regulation at such a level, which includes influencing three-wheeler transport service providers’ ability to set fares for their service, should also include measures to provide the service providers with job security, safety and well-being, and other benefits. Setting up a dedicated authority should be one of the first steps in this regard.
However, even under such an authority, the regulation of the three-wheeler transport service is a matter that is going to be challenging, because the sector has not operated as a regulated one before, and the country is yet to see how it would positively or negatively impact service providers and passengers.