Tuk-tuking the world by storm

The motorised rickshaw, despite official disapproval, is becoming ubiquitous

BusinessFeb 22nd 2014 edition

Feb 22nd 2014

CAIRO AND MUMBAI

THEY are most commonly associated with the teeming cities of developing Asia, but
three-wheeled motorised rickshaws, or tuk-tuks, first emerged in Japan and Italy just
over half a century ago. Since then the compact, cheap and adaptable vehicles have
spread to every corner of the globe. Bangladesh, Egypt, India, Nigeria, Peru, Sri
Lanka and Thailand are the biggest markets. They are increasingly seen chugging
through the streets of cities in east Africa, the Middle East and China.

The tuk-tuk’s rising popularity in Egypt is worrying its military-backed government.

On February 12th it imposed a one-year ban on imports of three-wheelers (and of
motorbikes). Unlikely as it sounds, ministers claim they are being used as getaway
vehicles by criminals.

The narrow, uneven streets in Shubra, a sprawling suburb in northern Cairo, are no
place for cars. Most tuk-tuks are used as taxis, usually shared between three drivers
who club together to buy one for about 19,000 Egyptian pounds ($2,760) and take
turns to work shifts. In India, milkmen use them for their rounds and parents pack
their children off to school in them. In Sri Lanka they are often the family car. Since
buyers are usually poor, financing is important. Sales of tuk-tuks in Egypt have risen
by 50% to 60,000 a year since 2011, when Ghabbour Auto, the sole importer of
Indian-made Bajaj rickshaws, introduced a loan scheme.

India is the biggest producer, turning out more than 530,000 tuk-tuks a year for the
local market and a further 300,000 for export. Bajaj, the market leader, competes with
two domestic firms, Mahindra & Mahindra and TVS, and with Piaggio of Italy, which
has a factory in Pune. Thailand’s producers mainly cater to domestic demand, but
Chett Taikratoke, the owner of one of them, TukTukThailand, says he plans to start
exporting to growing Middle Eastern markets. In the Gulf, for example, hotels have
become significant buyers of rickshaws, to ferry guests around.

Passengers seem to enjoy riding in tuk-tuks, but elites and governments are prone to
view them as a noisy and dirty urban blight. Thailand banned them briefly in the
1980s. Mumbai, India’s biggest city, and Mombasa, Kenya’s second-biggest, ban
them from parts of the central business district to keep the streets clear. Sri Lanka’s
government has sharply raised customs duties on them. In India customers cannot
simply walk into a showroom and buy a tuk-tuk as they would a car or motorbike,
says C.K. Rao, an executive at Bajaj; they must get a permit from the regional
authority.

Tuk-tuk manufacturers are innovating to alleviate the authorities’ concerns and attract
new customers. Some of Piaggio’s models now run on compressed natural gas rather
than diesel. An Australian firm, Star8Solar, is developing sunlight-powered tuk-tuks.
Thailand’s Tuk Tuk Factory is designing a “tuk-tuk limo” to hold six people rather
than two. But Bajaj is hedging its bets. Its latest auto-rickshaw, the RE60, looks more
like a mini-car, with an enclosed cabin and four wheels.

This article appeared in the Business section of the print edition under the headline
"Tuk-tuking the world by storm"

https://www.economist.com/business/2014/02/22/tuk-tuking-the-world-by-storm