Sri Lanka

Ride-Hailing App Drives Off Unionized Taxis in Northern Sri Lanka

For every driver-for-hire in Jaffna who has seen their income skyrocket with PickMe, there’s a veteran licensed operator who has seen their income plummet.

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Ride-Hailing App Drives Off Unionized Taxis in Northern Sri Lanka

Vijayatharsiny Thinesh, GPJ Sri Lanka

Driver Pirashanthan Pilenthiran has seen his income double since he joined PickMe, a taxi app that connects passengers with rides.

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JAFFNA, SRI LANKA — It’s a common story around the world: A new app makes it easy and cheap for people to hire cabs and disrupts the traditional vehicle-for-hire business, leading to protests. The app generally wins. This story is now playing out in northern Sri Lanka.

At 7 a.m. on this day, Pirashanthan Pilenthiran says a quick prayer to Jesus and touches his auto-rickshaw keys to his eyes with reverence. He walks to his vehicle parked at the roadside — a green and black three-wheeler with stickers on the front and back proclaiming, “PickMe.”

Pirashanthan is one of 1,500 drivers in Jaffna enrolled with PickMe, a ride-hailing app that connects people seeking rides with drivers. Pirashanthan says his daily earnings have doubled to about 4,000 Sri Lankan rupees (12 United States dollars) since he joined in August 2023.

“I am able to get food, school materials, toys and dresses for my children, and I can see that my life has progressed a little,” he says.

Not too far away, driver Janarthanan Kanagasingam is unhappy. He met with an accident in November 2022, which totaled his vehicle and paralyzed his left leg. His income supports his family of four, so he bought a new vehicle on monthly installments of 23,000 rupees (70 dollars). But after 30 years of driving as part of the local union, he says he has been unable to pay his bills since PickMe launched. He hasn’t joined the app, and his daily earnings have halved to about 1,500 rupees (5 dollars).

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Vijayatharsiny Thinesh, GPJ Sri Lanka

Janarthanan Kanagasingam’s income from driving autos has halved since PickMe launched in Jaffna.

“We are losing our livelihood,” Janarthanan says. “We have families and responsibilities.”

The men’s divergent fates indicate the winners and losers of an ongoing market battle in Jaffna. PickMe, an app created in 2015 by Colombo-based Digital Mobility Solutions, launched a pilot in Jaffna in January 2023. Jaffna’s residents used trains, buses, two-wheelers and cars to get around. But for quick rides, they called auto-rickshaw drivers, who would pick them up after a 30-minute wait. The government had mandated a fare of 120 rupees (37 cents) per kilometer, but drivers often demanded double and refused to turn on their meters. The drivers Global Press Journal spoke with, claimed the government rate was too low, as the price of fuel and vehicle parts had skyrocketed after Sri Lanka’s economy crashed in 2022.

“Our drivers are working hard,” says Vijayarasha Rasamani, head of the Three Wheelers Owners Association in Jaffna.

Drawn by cheaper fares

But customers, too, were burdened. The nation’s inflation rate had risen by 73.7% in the year ending September 2022.

PickMe managers sensed an easy market and formally launched in August 2023 during the annual festival at the Nallur temple, when hundreds of thousands of people from across Sri Lanka visit Jaffna. The app offered two free trips to customers and charged less than the government’s price — 185 rupees (58 cents) for the first two kilometers, but then 95 rupees (30 cents) for every kilometer thereafter. Autos appeared within minutes. Customers were thrilled, even as Jaffna’s traditional drivers saw their business ride off.

For more than 30 years, the auto-rickshaw industry in Jaffna has been controlled by the Three Wheelers Owners Association, a union which represents 1,337 drivers. Its basis for existence is a municipal law: Auto-rickshaws can legally park only in one of 1,100 parking spots assigned by the city, says Jeyaseelan Thanabalasingham, commissioner of Jaffna municipality. Open spots are rare, and drivers buy and sell exclusive access to them for about 100,000 rupees (317 dollars) on the black market, say three drivers who declined to be identified due to the sensitivity of the matter.

In addition, unionized drivers buy vehicles for over 1 million rupees (3,420 dollars), usually paid off in monthly installments. They also must purchase a meter for around 30,000 rupees (95 dollars), and pay 150 rupees (47 cents) monthly in union fees and 50 rupees (16 cents) in daily fees to the Jaffna Municipal Council, says Vijayarasha, who has been driving for 30 years.

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Vijayatharsiny Thinesh, GPJ Sri Lanka

Venture capital-funded PickMe offers steep discounts to riders, making it hard for unionized auto drivers to compete.

All this adds up to steep monthly expenses for operating auto-rickshaws, making it difficult to enter the business.

PickMe disrupted this system by lowering the investments and attracting tech-savvy drivers who could get customers even without owning a parking stand.

“It is not acceptable for PickMe to suddenly change the way the auto business is done,” Vijayarasha says.

Unionized drivers couldn’t afford to burn cash to retain customers with steep discounts like PickMe, which received 2.5 million dollars in venture capital in 2018. They immediately started protesting.

Familiar backlash

Thavatheesan Amirthalingam, PickMe’s Jaffna agent, says the response was expected. “When we started this app in Colombo, we faced a lot of problems,” Thavatheesan says. “Just like auto drivers protesting in Jaffna now, there were protests in Colombo. But at some point, people welcomed it.”

Thavatheesan claims that the union dislikes the app as it charges a uniform rate for all customers. “They decide charges based on whether the customer is rich or poor,” he says. “We don’t discriminate. Everyone is treated the same.”

Older drivers in the union also couldn’t sign up because they don’t own smartphones and are not tech-savvy, Thavatheesan says. “We are not responsible for that,” he says. “As time moves into the modern age, we must also change. But we are not saying that they should stay at home without working.”

Union chief Vijayarasha says that if the union received complaints of any driver discriminating between customers, the driver would be reprimanded.

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Vijayatharsiny Thinesh, GPJ Sri Lanka

The PickMe app connects drivers with customers for a share of their earnings.

The government has not interfered in the market clash, except to tell the union its drivers should charge by the meter. Since August 2023, union drivers have fixed their meters and are using them, says Janarthanan, the driver. Vijayarasha adds that the union investigates and suspends anyone who overcharges customers. But the measures haven’t helped because PickMe rates are cheaper than the meter fare.

“How can the government allow PickMe, which collects less money than the meter?” Janarthanan says. “The money we charged was estimated after considering distance traveled, fuel cost and depreciation of the vehicle.”

Both Jeyaseelan, the Jaffna municipal commissioner, and Ambalavanar Sivabalasundaran, the representative of the central government in Jaffna, declined to comment on the government meter rate or whether PickMe should be allowed to charge a lower rate.

‘My life changed’

PickMe driver Pirashanthan bought an auto-rickshaw four years ago, but he didn’t have a parking stand in Jaffna and was not part of the union. He used to drive for private customers who phoned him. “I would go for rides only if someone asked,” he says. “Or I would go work illegally in the outskirts of Jaffna.”

He earned less than 2,000 rupees (6 dollars) a day — not enough to pay off his auto loan.

“There were some days when there were no phone calls, and there were days when the shirt pocket was empty with no money,” he recalls.

Since joining PickMe, his auto is in great demand. “My life changed after PickMe,” he says. “I can get more customers.”

Pirashanthan earns less money per ride than unionized drivers like Janarthanan, but he makes up the difference by driving more customers. At the end of the day, he earns as much as union drivers used to, albeit by driving longer hours in the polluted streets of Jaffna. Pirashanthan also has less control over his business, as he can reject a maximum of two customers every day. Any more and his ratings would suffer and trips would decline, he says. At present, 12% of his earnings go to PickMe.

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Vijayatharsiny Thinesh, GPJ Sri Lanka

Victoria Kavignan prefers PickMe autos over buses as they are convenient and fast.

Customers are happy with the app as rides are cheap and quick; and the autos are tracked, providing a sense of safety and accountability. “I feel safe traveling alone with my child in PickMe even at night,” says Vithurshan Arany, a housewife from the town of Paruthithurai.

Arany hires autos to take her mother-in-law to the hospital and says the app saves about half her monthly travel expenses. “I encourage my family and friends to use the PickMe app,” she says. “In the current economic crisis, it is important to save money on transportation costs.”

Victoria Kavignan, a sales manager based in the town of Valvettithurai, used PickMe in 2020 in Colombo as she didn’t know the city or the language. She signed up quickly once the app launched in Jaffna. She says PickMe autos are safer and quicker than buses.

PickMe’s initial rock-bottom fares for Jaffna customers increased this year due to higher taxes and petrol costs, says Thavatheesan, the local agent. The company now charges 205 rupees (64 cents) for the first two kilometers and 105 rupees (33 cents) thereafter — an 11% increase, but still less than the government rate.

Thavatheesan says that more than 75% of auto drivers in Jaffna have joined PickMe as the Three Wheelers Owners Association monopoly crumbles. And the app will soon expand to the nearby districts of Mannar and Mullaitivu in the Northern Province, he says. “The people there will also be able to get our services in the future.”

Vijayatharsiny Thinesh is a Global Press Journal reporter based in Jaffna, Sri Lanka.


Lohith Kumar, GPJ, translated this article from Tamil.