COVID-19 and road ahead for Sri Lanka’s three-wheeler industry

Sri Lanka has been under curfew since mid-March to contain the spread of COVID-19. As a result, economic activities throughout the country have stalled. A recent Institute of Policy Studies (IPS) blog identified that non-agricultural, informal workers were highly affected by this pandemic. 

This article illustrates how the ongoing curfew is impacting the three-wheeler drivers in Sri Lanka, based on mobile phone conversations with a sample of 14 three-wheeler drivers from the Colombo, Kegalle and Galle districts.  
According to the Labour Force Survey 2018, 59 percent of the employed in Sri Lanka are engaged in informal employment and nearly half (49 percent) of non-agricultural workers are informal workers. 

Driving three-wheeler taxis is one of the top occupations among informal, non-agricultural workers. About 6 percent of the total employed were three-wheeler drivers in 2018. (This amounts to 235,271 drivers, according to the 2016 Labour Force Survey data, which is likely to be an underestimate. 

More realistically, the number is estimated to be approximately 544,804, using the total registered number of three-wheelers.) The majority of three-wheeler drivers operate in the Colombo, Gampaha and Kandy districts (Figure 1). Incidentally, these are the districts most affected by the curfew.

Impact of curfew on three-wheeler industry
When the curfew is lifted periodically, the three-wheeler drivers in rural and suburban areas can get a few hires, mostly from their acquaintances and neighbours. This is not possible in urban areas, due to high traffic. According to the urban drivers, during high traffic, the profit margin is low and it is not worthwhile to operate three-wheelers. 
“No work since the curfew was imposed. Vehicle is there but cannot go out, even to find something to sell, due to the curfew,” said a three-wheeler driver from Maradana.

According to a recent IPS study, three-wheeler drivers earn a higher income than most other informal sector workers, with attractive, on-the-spot cash, on a daily basis. Unfortunately, the ongoing curfew has led to a decline in the daily income of three-wheeler drivers. 

In the Colombo district, the drivers who usually earn Rs.2,000-3,000 a day, have no income at all because of the continuous curfew. In other districts, some were able to earn around Rs.500 per day, when the curfew was lifted. But that too is much lower than their usual daily income. 

Some of the temporary migrants have left to their villages since the curfew was imposed, including platform-based three-wheeler drivers, such as those registered with Pick Me. Thus, they are unable to engage even in the limited work opportunities available, such as food delivery activities taken over by Pick Me and Uber.

Government relief for three-wheeler drivers
The government intervention to give an extension of six months to pay off their leases is a relief for the drivers who have bought three-wheelers through lease.  

“It is good that the government has given an extension to pay the lease or our vehicles will be seized. But we cannot stay a longer period like this. Many three-wheeler drivers do not have much savings; we are used to surviving on a daily income,” said three-wheeler drivers from Hikkaduwa and Athurugiriya.

Most of the three-wheeler drivers interviewed are not registered for Samurdhi and are not eligible for the concessions given to the Samurdhi beneficiaries. 

Most three-wheeler drivers also did not have savings as they were paying off loans taken to buy their three-wheelers. Moreover, not just the full-time three-wheeler drivers but also the part-time drivers, who work in carpentry/masonry, have lost all their income sources.

“We do not have Samurdhi so nothing was given for us,” said a three-wheeler driver from Anguruwella.
Right now, food delivery is the only alternative available to three-wheeler drivers but permits are given to a limited number of drivers with connections to food suppliers. Further, some drivers were concerned about delivering food to a large number of houses due to the health risks posed by COVID-19. 

Some three-wheeler drivers have received dry rations, distributed free of charge by the municipal councils to daily income earners in the informal sector. However, only three-wheeler drivers in some areas have benefitted from this facility. 

According to those surveyed, food items are not being distributed in some rural areas and around main roads in urban areas. Some stated that the three-wheeler drivers are not eligible for free rations and subsidies in their locations, unless they are 
Samurdhi beneficiaries.  

There is a government procedure to identify daily income earners who have been suffering due to the crisis, through Grama Niladharis. Only one driver stated that they were asked to register but could not go because of the curfew. Some were not even aware of this scheme. 

Some three-wheeler drivers are temporary migrants to urban areas. They are more likely to be missed from receiving subsidies and free food rations, as they are not registered with Grama Niladharis in their temporary location. Even Grama Niladharis in these areas have no records or information about such workers. As such, a system should be started to register these workers, so they can benefit from the on-going relief measures. 

Coping without an income 
The three-wheeler drivers from urban areas find it harder to manage without an income. Even though many drivers operate in city areas, most of them are from villages. Some are semi-permanent migrants living in Colombo. Even if food distributers arrive, they do not have money on hand to buy food. 

Those from rural areas are able to obtain local produce such as jack fruit, coconut and some vegetables cheaply. But this is only a short -term solution, as many of these vendors are dependent on locally grown food. Those from the urban sector use savings or have taken loans to buy essential food items. 

“I used the cash I had the last few days. Food distributers are not coming to our area and we can go to the town to buy essentials only when the curfew is lifted,” a three-wheeler driver from Anguruwella said. 

“No money at all. Brought some food from the nearby store for credit,” said three-wheeler drivers from Maradana and Kaduwela.

Some three-wheeler drivers are relying on their families to provide for them. A wife of one driver said that she is working for a neighbour to cover their daily expenses. One elderly three-wheeler driver depends on his children to provide him provisions. Another three-wheeler driver is a retired postal service worker and manages with his pension. 

Some indicated that if the situation becomes worse, they might have to sell their vehicles to cope but this will compromise their future earning potential. 

Way ahead
The three-wheeler industry is an important source of employment for many non-agricultural, informal sector workers. This sector is one of the most severely affected by the on-going curfew. 

Being able to delay lease payments is a great relief for many three-wheeler drivers but many need income support to cover the daily expenses. There are some initiatives to distribute rations to daily income earners. 

However, this is not being carried out in all areas, while in some areas, only Samurdhi beneficiaries are targeted through relief efforts. Providing opportunities for three-wheeler drivers to be more involved in distribution activities is one means of helping them to earn an income. 

Many three-wheeler drivers are temporary migrants to urban areas. As such, they are missed out in the relief efforts done at the Grama Niladhari level. A self-registering system may help but should be transparent because benefits should be given only for those in need. 

(Thisali de Silva is a Project Officer and Nisha Arunatilake is the Director of Research at the Institute of Policy Studies of Sri Lanka (IPS). To talk to the authors, email [email protected]/[email protected]. To view this article online and to share your comments, visit the IPS blog ‘Talking Economics’ - http://www.ips.lk/talkingeconomics/)