socio economic aspects of threewheelers finalised

8/13/2019 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


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


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


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

socio economic aspects of threewheelers finalised

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