Increasing incidents of taxi scams, including alleged ‘taxi-mafia’ activity and other irregularities, have prompted stakeholders to demand strengthened regulatory oversight and transparency. The prevalence of ride-hailing apps and digital solutions has elevated affordability, safety, and convenience as key priorities for taxi services, particularly for tourists.
While the accepted average meter rate for three-wheelers is Rs. 85 per kilometre, widespread non-compliance, especially towards tourists, can be observed with numerous tourist vlogs capturing instances of overcharging by individual three-wheeler operators.
Additionally, heightened tensions between traditional taxi services and app-based ride-hailing operators have also affected the experiences of foreign travellers, subsequently impacting the country’s reputation as a travel destination.
Government stance
Speaking to The Sunday Morning Business, Deputy Minister of Tourism Prof. Ruwan Ranasinghe highlighted that such conflicts had been identified and efforts were underway to address them.
The current taxi ecosystem consists of registered ride-sharing companies and traditional three-wheeler operators. Historically, especially in tourist areas such as the south, Ella, and Sigiriya, individual three-wheeler operators have been running their services with less competition.
Commenting on the current situation, Prof. Ranasinghe explained that overcharging took place evidently when it came to individual operators. For instance, from Ella town to the Nine-Arch Bridge, certain three-wheelers charge approximately Rs. 3,000-4,000 when it should be around Rs. 1,000.
However, he noted that not all three-wheeler operators engaged in such practices. Accordingly, when ride-sharing companies operate at very low rates, other three-wheeler operators organise and oppose new rates.
“We have recently come to an agreement with the Deputy Minister of Transport and the Deputy Minister of Public Security, having met with several three-wheeler associations and deciding to facilitate negotiations with companies regarding tourist rates. The Minister of Transport agreed to speak to ride-sharing companies as well. Regulatory concerns over overcharging were also addressed and discouraged,” he said.
However, Prof. Ranasinghe also expressed the need to protect traditionally operating three-wheeler drivers, especially given the fact that the livelihood of the majority depended entirely on these services, while addressing overcharging and ‘taxi mafia’ concerns.
He added that the possibility of standardising prices depended on the situation. At times, operators are made to wait for prolonged durations between rides, which may change the prices initially agreed upon.
Amidst these challenges, certain attempts are being considered by the ministry to address these issues. For instance, according to Prof. Ranasinghe, issuing identifiable logos for drivers and a certain level of standardisation of pricing are among the steps that can be implemented effectively.
Moreover, in order to enhance tourist experiences in terms of transport, the Government hopes to uplift the standard of the local public transport system within the next five years.
“Plans are also in place to further facilitate luxury bus services, including services from the airport to Colombo. There are high hopes regarding the railway system and its integration into tourism in a better way as well. Therefore, the Government is not looking to depend entirely on private modes of transport for tourism, but is also considering the public transport aspect in the long run.
“Efforts will also be made to improve airport taxi services, addressing conflicts in these areas. Rather than solely depending on controlling measures, promoting more facilities, having more alternatives, and creating more opportunities is the solution,” he added.
Recently, tensions between local taxi mafias and app-based ride-hailing operators have escalated, with over 30 cases reported in the previous three months. The majority of these incidents involved foreign tourists as customers, impacting the country’s reputation as a safe and welcoming destination for travellers.
Releasing a statement regarding this concern, PickMe CEO Jiffry Zulfer called for urgent action from law enforcement authorities to address these growing safety concerns and ensure the safety of all involved.
He elaborated that these actions were misguided by the assumption that ride-sharing apps were taking business away from individual three-wheeler operators, while in reality, they facilitated bringing tourists into local areas. Furthermore, Zulfer emphasised the need for a strengthened system to enhance the country’s appeal as a tourist destination.
Regulatory void as the primary concern
Three subcommittees responsible to the Ministerial Consultative Committee on Transport have recently been appointed to resolve problems prevailing in the transport sector through transport-, environment-, business-, and people-friendly concepts.
These include subcommittees for ensuring job security of workers engaged in the informal transport industry; guiding the transport sector towards a productive direction by strengthening the legal framework associated with the transport sector; and formulating business models for creating additional services associated with the transport industry.
Speaking to The Sunday Morning Business on regulatory concerns, All-Island Three-Wheeler Drivers’ Union President Lalith Dharmasekera noted that with taxi conflicts and scams going on for years, many groups, including theirs, had always lobbied for standardising measures including the addition of meters and the need for regulation in the sector.
Even at present, many three-wheelers have not adopted metered fares, but segments of three-wheeler operators themselves have opposed these suggestions. Dharmasekera noted that in the absence of regulations and rules, these issues and conflicts had arisen despite their having demanded regulation for years.
“We oppose the scams and conflicts carried out by three-wheeler operators and we consistently urge the authorities to take necessary action. Many businesses, including three-wheelers, try to charge more when it comes to tourists. The meter should ideally show the same rates regardless of whether the passenger is a foreigner or not, similar to ride-sharing apps,” he stated.
Commenting on the overall regulatory framework, Dharmasekera added that there was no effective system to process complaints for three-wheelers and short-lived measures only addressed problems as they arose, which was not adequate. He further stressed the importance of ensuring that all three-wheelers followed the necessary standards.
According to him, it is first necessary to officially register and distinguish three-wheelers that function as taxis from those that do not, as this would help solve many of these issues. All necessary guidelines should also be provided to the Provincial Councils.
“Rates are not the only factor that prompt people to use ride-sharing apps, but they also use three-wheelers for safety, comfort, and accountability. That being said, although the minimum fare per kilometre has been mandated as Rs. 85, the majority of three-wheelers charge much higher amounts,” he explained.
The Sri Lanka Tourism Development Authority (SLTDA) launched a tourist-friendly tuk-tuk service in 2018, initially rolled out for the Colombo District.
The programme included a training initiative for three-wheeler drivers, training over 750 drivers at the first step. Upon completion, they were provided with logos, certificates, and a special ID, allowing tourists to easily identify these ‘tourist-friendly’ tuks. However, the continuation of this programme cannot be seen at present.
Dharmasekera noted that this initiative, while advocated by three-wheeler associations as well, was not sustained due to the lack of regulation from the Government, despite many drivers having joined this programme and having received necessary certificates and IDs. From a policy perspective, he highlighted recent discussions regarding three-wheeler regulation with the Ministry of Transport during a subcommittee meeting.
“We raised concerns regarding the need to regulate regionally and nationally, as the necessary laws and gazettes are already in place but have not been implemented by the relevant authorities. The committee agreed on the need for urgent solutions,” he said.
Industry opinion
Meanwhile, Sri Lanka Tourism Alliance Co-Chair Malik J. Fernando noted that there was a significant risk emerging from these concerns.
He stated that as tourism numbers increased from a lower base, the experience of new travellers, who came with higher expectations, could be damaged due to poor visitor experiences such as exploitation by transport and accommodation providers as well as overcrowding and poor experiences at key sites.
“It is crucial that travellers are treated with honesty, without seeing them as people to be taken advantage of, and to ensure that they return with positive feedback, encouraging more visitors. Travellers facing exploitation or having poor experiences will speak negatively about such incidents, so it is important that every visitor has a positive experience,” he said.
Fernando also noted that price regulations may not work, as ride-sharing apps were transparent and most travellers were used to these apps. It is important to ensure transparency and fairness in pricing.
Similarly, Chamber of Tourism and Industry Sri Lanka (CTISL) President A.M. Jaufer pointed out that all three-wheeler drivers in tourist areas, especially those near airports, railway stations, and hotels, must be identified by the Tourist Police and given training, identification, and uniforms, if possible, as this would allow tourists to easily identify them as tourist-friendly.
Sri Lanka Association of Inbound Tour Operators (SLAITO) Immediate Past President Nishad Wijetunga informed The Sunday Morning Business that while the material impact of these activities might not be immediately visible, it definitely did not have positive implications.
“While SLAITO does not necessarily utilise these transport modes, tourists should have the freedom to select their preferred mode of transport. Otherwise, it would be an infringement of their fundamental rights. We urge the authorities to take action to prevent these incidents from occurring in the future as they damage Sri Lanka’s reputation and image,” he said.
Commenting on transport accessibility from a destination management company’s perspective, Wijetunga noted that, unfortunately, Sri Lanka’s overall vehicle fleet in tour operations was nearly 15 years old and it had not been possible to re-fleet, especially considering the recent import restrictions in the country.
He added that when the previous regime had issued special permission to import buses and vans for the industry, their members and hoteliers had made use of the opportunity and opened Letters of Credit (LOCs) to import vehicles. Nevertheless, the new tariffs introduced in February are impacting the import of these vehicles significantly in a manner exceeding the initial budgeting of the companies.
Tour operators have appealed to the authorities to allow at least old vehicles to be imported without the new taxes. However, Wijetunga remarked that so far, there had not been a positive response.
Overall, the prices of new vehicles are going to be very challenging for the industry as importing vehicles at these new prices for tourist transportation will complicate the return on investment. This will contribute to the expensiveness of the destination, as transport prices will need to be high in order to recover the investment.
Furthermore, Wijetunga highlighted the importance of the Government allowing the clearance of vehicles from the LOCs opened between July and September 2024, which were not bound by the new tax structure, and allowing tourism companies to bring in vehicles used for tourism at more competitive prices by offering concessions on the new tariffs.
