The three-wheeler taxi sector, widely known as the tuktuk industry, continues to play a profound yet largely underrecognised role in Sri Lanka’s economy. 

With over one million three-wheelers registered islandwide, the sector provides livelihoods to hundreds of thousands, facilitates last-mile transport, and contributes to both fuel revenue and vehicle financing markets. Despite this, it remains socially stigmatised and economically undervalued in public discourse and policy planning.

According to the National Human Resources Development Council (NHRDC), the number of registered three-wheelers in Sri Lanka exceeded 1.06 million by the end of 2016. Of these, approximately 800,000 were in active use, primarily for passenger transport, accounting for about 9.2% of the national working population and supporting 2.8 million people across an estimated 760,000 households.

However, union representatives and researchers state that the contribution of this sector has not received proportionate recognition or support from regulatory authorities. While the transport sector accounts for 7% of Sri Lanka’s Gross Domestic Product (GDP), tuktuks contribute 35% of that figure, according to data shared by All-Island Three-Wheeler Drivers’ Union (AITWDU) President Lalith Dharmasekara.

A high-impact mode of transport

Three-wheelers occupy a key segment in Sri Lanka’s informal transport sector. A 2010 study by Kumarage et al., published in Research in Transportation Economics, describes the fleet as accounting for 15% of the active motor vehicle population and 6% of total passenger kilometres travelled in the country. 

The study observes that tuktuks operate with high geographic reach, often servicing areas not covered by scheduled public transport systems, and offering 24-hour, door-to-door service, especially in suburban and rural areas.

Further, the NHRDC report notes that three-wheelers are often used as informal ambulances in rural districts and for transporting students, workers, and the elderly. This was reinforced by National Joint Three-wheeler Drivers’ and Industrial Workers’ Association Secretary Rohana Perera, who stated: “We are the end transport method that people can use; trains or buses don’t go up to their houses, but we do.”

Economic linkages and revenue flows

The tuktuk economy links into multiple segments of the formal economy. The 2019 NHRDC study found that 85% of three-wheelers are purchased through leasing or loan schemes, illustrating a high dependency on the financial sector. A large majority of drivers deposit daily income into formal banks, with 98% of respondents reporting use of recognised banking institutions for savings.

Fuel consumption by the sector is also significant. Based on union estimates, each active tuktuk uses about 6 litres of fuel per day. With approximately 850,000 vehicles in operation, daily fuel consumption could amount to 5.1 million litres. This volume directly contributes to fuel tax and Value-Added Tax (VAT) revenues, although no comprehensive Government statement has quantified this impact.

Insurance, spare parts, vehicle servicing, tyre replacements, and maintenance workshops form an ancillary economy supported by the sector. Advocata Institute Chief Executive Officer (CEO) Dhananath Fernando noted: “There is a large finance industry connected to this. Most of these three-wheeler drivers obtain loans from banks and there is an insurance industry that operates alongside. All of this creates a lot of employment in addition to the three-wheeler industry.”

Income distribution and work structure

The NHRDC study reveals that 66% of full-time drivers earn over Rs. 40,000 per month, with a small percentage reporting earnings of over Rs. 100,000. The mean daily income is estimated between Rs. 1,500 and Rs. 2,300, with wide variation based on location and working hours.

It has also found that 92% of drivers are full-time, self-employed operators who own their vehicle or lease it. Only 5.2% operate under rental agreements, suggesting limited employer-employee structures in the sector.

However, the sector is largely male-dominated, with the NHRDC recording 99.9% of respondents as male. Age-wise, more than half the drivers are under 40, and 19% are under the age of 30, indicating that the sector attracts younger workers, particularly in the absence of formal employment opportunities.

Education levels vary. While 52% have completed studies up to Grade 11, 40% had passed their GCE Ordinary Level, and 5% had completed Advanced Level or higher studies. The study notes that for many, this profession acts as transitional employment due to barriers in the formal job market.

Social perception and stigma

Despite its economic relevance, the tuktuk profession continues to carry notable social stigma in Sri Lanka. The NHRDC report and the Kumarage et al. study both observe that tuktuk drivers are frequently perceived as informal, unprofessional, or disorderly actors within the urban landscape. These perceptions, while not statistically reflective of the majority, continue to influence public attitudes.

AITWDU President Dharmasekara noted: “There is a social stigma with regard to the tuktuk profession because the people and the profession are constantly being put down by society.” 

This perception has been reinforced by visible cases of fare disputes, loud music, or road violations, despite the fact that 87% of drivers surveyed stated that they did not drink and drive, while 70% reported abstaining from alcohol or cigarette use altogether.

The Kumarage study further notes that entry into parking stands is sometimes restricted by informal unions and that fare setting is unregulated, leading to inconsistent pricing and public distrust. About 75% of tuktuks are metered, but 60% of pricing decisions are still made directly by the driver, outside formal regulation.

Regulation and policy gaps

While the sector plays an essential transport function, it is largely unregulated. Fares are not standardised, vehicle conduct is not systematically monitored, and driver licensing requirements are minimal.

Although a committee was proposed to include representatives from the Consumer Affairs Authority, Police, and Transport Ministry, union leaders including National Joint Three-wheeler Drivers’ and Industrial Workers’ Association Association Secretary Perera claim that “the Government still has been unable to regulate the prices and bring them to the same level”. 

The association had proposed a base fare of Rs. 100 for the first kilometre and Rs. 85 thereafter, but no national fare regulation has been enforced.

The NHRDC study concludes that “three-wheeler services have to be regulated as a profession”. It recommends introducing National Vocational Qualification (NVQ)-level vocational qualifications, driver ID cards, uniforms, minimum age requirements, and fare receipts, all of which received high approval rates from drivers. Over 92% support the introduction of a minimum age and 88% support registration and licensing reforms.

Furthermore, the study recommends establishing a social security network to support drivers with access to pensions, health insurance, and small loans.

Structural challenges and transition potential

While the study acknowledges that the sector absorbs youth excluded from the formal economy, it also notes that 42% of drivers would leave the profession if a better opportunity were available. Most of these were younger males with O/Level qualifications, indicating a preference for more stable or skilled employment.

Nevertheless, transitioning away from the sector is not always straightforward. Leasing commitments, household responsibilities, and the appeal of flexible hours make it a viable, if not always ideal, livelihood option. According to the NHRDC, policy frameworks need to account for these realities rather than assume tuktuk drivers are easily deployable elsewhere.

The study also found that the sector contributes significantly to poverty alleviation, with per capita expenditures well above the official poverty line (Rs. 4,166 in 2016), and savings habits widely practised among drivers.

Way forward

Available evidence from Government-affiliated research and field surveys indicates that Sri Lanka’s tuktuk sector functions as a significant, if informal, economic contributor. It absorbs a large share of underemployed youth, provides critical mobility services in areas underserved by public transport, and feeds into banking, leasing, insurance, and fuel markets.

However, its full potential remains hindered by the absence of formal regulation, public stigma, and limited institutional support. As Advocata Institute CEO Fernando noted: “In the absence of a proper public transportation system, that difficulty has been somewhat eased by three-wheelers.”

“Having like one million three-wheelers itself is a success story because this has a long value stream,” he said.

Further research, disaggregated policy planning, and inclusion of driver voices in reform processes could help transform the tuktuk industry into a more formal, recognised, and professionally governed sector.

All attempts by The Sunday Morning to reach the Ministry of Transport to determine whether the Government planned to regulate the three-wheeler industry proved futile. 

Tuktuk economy as of 2019

• Over 1.059 million three-wheelers registered in Sri Lanka
• 
  
• Approximately 800,000 three-wheelers actively used for transport
• 
  
• Sector supports 760,000 households and 2.8 million people directly or indirectly
• 
  
• 92% of drivers operate full-time; only 5.2% drive on a rental basis
• 
  
• Average monthly income for full-time drivers is Rs. 46,000
• 
  
• 30% of drivers earn over Rs. 50,000; top earners exceed Rs. 100,000
• 
  
• 85% of tuktuks purchased via leasing or bank loans
• 
  
• 98% of drivers save formally through recognised banks
• 
  
• 52% of drivers educated up to Grade 11; 40% passed GCE O/L exams
• 
  
• 87% of drivers say they do not drink and drive
• 
  
• 43% cite lack of social respect as the biggest disadvantage of the profession
• 
  
• 42% of drivers, mostly under 30, would leave the profession for a better job
• 
  
• 75% of tuktuks are metered; 60% of pricing still decided informally
• 
  
• 92% support a minimum age requirement for drivers
• 
  
• 88% support formal registration and licensing
• 
  
• 70% support issuing printed fare receipts; 67% support wearing uniforms

Tuktuks: Social impact and systemic gaps

• Tuktuks are the primary last-mile transport option for areas not served by trains or buses
• In rural areas, they are frequently used as emergency transport and informal ambulances
• Drivers often provide services during off-peak hours and natural disasters, especially in flood-prone zones
• The sector emerged as a resilience mechanism during economic shocks such as the pandemic and fuel crisis
• Many drivers entered the profession due to job loss, business failure, or lack of access to formal employment
• Tuktuks are excluded from high-end hotels, malls, and gated communities, reinforcing class-based barriers
• Despite acting as a core public utility, the sector has no dedicated regulatory authority
• There is no formal vocational pathway — tuktuk driving is not included in Sri Lanka’s NVQ or skills qualification system
• Drivers have no access to health insurance, pension schemes, or accident coverage
• Public mistrust is often linked to unregulated fare negotiations and lack of accountability mechanisms
• Safety and customer service training for drivers is unavailable or non-compulsory across the sector
• Formal ride-hailing platforms profit from tuktuk services, but drivers remain informally engaged without protection
• Past multi-agency committees to regulate fares and standards have failed to yield results or policy change
• Although drivers have proposed national reforms, no centralised implementation body has taken responsibility

--