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Dhaka Tribune

The auto-rickshaw market is shrinking as ride-sharing apps become more popular

High fares and inefficiency of the public transportation system as a whole have acted as growth drivers for ride-sharing companies

Update : 24 Aug 2021, 07:35 PM

The steady rise of ride-sharing services in the country is decimating the demand for CNG-run auto-rickshaws. 

Registrations of CNG-run auto-rickshaws have plummeted from 29,800 new registrations in 2019 to less than 5,000 this year.

The high fares charged by auto-rickshaw drivers and the inefficiency of the public transportation system as a whole have acted as growth drivers for ride-sharing companies. 

To put things in perspective, the motorcycle-based ridesharing market grew 40% since they were introduced (up until the pandemic), according to a Reuters report. 

But the cost of convenience for customers is largely borne by auto-rickshaw drivers who are losing customers, and with them, their livelihoods.

There are currently around 15,000 CNG auto-rickshaw drivers in Dhaka city, and over 30,000 in Chattogram. On average an auto-rickshaw driver earns about Tk500 a day after meeting his running expenses and the daily deposits.

Leaders of the Bangladesh Auto-rickshaw Auto-tempo Transport Workers Federation (BAATWF), which represents three-wheeler drivers, said there were around 500,000 drivers with valid driving licenses across the country. There are currently 309,488 such vehicles registered around the country, according to Bangladesh Road Transport Authority (BRTA) data.   

Source: BRTA

There are a few reasons behind the shift in demand for preferring ride-sharing over CNG-run auto-rickshaws, one being simply the better service offered by the ride-sharing companies. 

At present, there are many ride-sharing companies operating throughout the country such as Pathao, Uber and Shohoz. Homegrown start-up, Pathao, has more than 200,000 riders registered with them. 

Another reason is the increase in the cost of getting a new auto-rickshaw on the road. 

Some owners say it sets them back around Tk13-14 lakhs (including the purchase price and the cost of registration), to get a new vehicle on the streets. Getting a reconditioned car with a similar cost and registering it with a ride-sharing company seems to be a better deal for most.

Operating costs and rent are pretty standard and have not decreased during the pandemic. There have been some cases where owners have actually increased the daily deposit during the ongoing Covid-19 situation.

The pandemic has added to the burden, as people have gone under lockdown and many have left the cities. “I have to pay around Tk900 every day to the owner, and on top of that, I have to spend another Tk300-400 on fuel costs,” said Azmol Miah, an auto-rickshaw driver who has been involved in the profession for more than 20 years. Usually, auto-rickshaw drivers earn money on a daily basis to support their families.

Auto-tempos have also had a similar fate due to the pandemic. Due to constant lockdowns and people becoming more aware of maintaining social distance, they often opt for alternatives to these usually crowded means of transport.

Before the introduction of ride-sharing applications, consumers had a constant complaint against these same CNG auto-rickshaw drivers for exploiting the elasticity of demand for transportation by overcharging fares. Even the meters often displayed suspicious amounts as most of them were tampered with. 

There are a few such ridesharing companies that include auto-rickshaws, but none of them have been very successful. 

Only a few months ago, Uber launched a new service that included CNG-run auto-rickshaws but then suspended their services within a week. The San Francisco-based company did not give any official statement regarding this matter.

To add to their distress, for the last couple of months, auto-rickshaw drivers have complained about an increase in the number of illegal and unauthorized collection of tolls of upto Tk30 in various locations throughout the capital. According to agency reports, places such as Gabtoli, Bosila and Demra Staff Quarter areas are prone to this  sort of extortion in the name of “tolls.”

As the government imposed lockdowns have been lifted, the situation has gotten a little better, according to auto-rickshaw drivers. But the number of trips is nowhere near what it was before the pandemic. “We are hardly getting six to seven trips a day now, half of what we used to make,” said Rahmat, an auto-rickshaw driver based in the capital.

Many are opting to move into driving cars, but most are reluctant to make the change. Simply because learning how to drive a car requires money and time—neither of which most of them can afford.

According to most of these auto-rickshaw drivers, they also want to be included in ride-sharing services. Only this way they believe they can get more customers. 

As for the customers, this will offer a cheaper method of private transportation (compared to cars) as well as rates that can be monitored without having to depend on meters, which addresses a major customer complaint.

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