The document discusses a study conducted on the barriers faced by city rickshaw drivers in Biratnagar, Nepal. It finds that while the municipality has set a quota of 300 city rickshaws, there are actually 500-600 operating. This has led to 200-300 rickshaws being illegal and part of the informal economy. The study aims to analyze the issues faced by drivers and make policy recommendations. It conducted surveys of drivers and consumers to understand the demand and difficulties in registration, financing and legal compliance under the current system. The findings suggest deregulating the quota system and improving the policy framework governing city rickshaws.

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City Rickshaw Barrier to Entry
A Case Study of Biratnagar
Published by:
Bikalpa-an Alternative

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City Rickshaw Barrier to Entry
A Case Study of Biratnagar

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Acknowledgements
This paper, which is part of the larger initiative of ‘Economic freedom
to earn a Living’ would not have been possible without inputs from a lot
of individuals and organizations. We would like to begin by expressing
our sincere gratitude towards Atlas Network for granting the resources
which made it possible for us to conduct the study on city-rickshaw’s
barrier to economic freedom.
We would like to thank Ms. Astha Joshi for her immense and valuable
support for helping us to write and finalize the study. Without her con-
sistent support it would have been difficult for us to come up with the
complete study. We would also like to acknowledge Ms. Laura Liu, Eco-
nomic and Trade Policy Advisor at Atlas Network who provided valu-
able insights for both the initial and the final draft of the paper.
We would also like to extend our gratitude to Mr. Sarwagya Raj Pandey
for helping us in proof reading and collecting the primary source of
data for the study. We heartily thank our enumerators Mr. Suman Rai,
and Mr. Punam Giri for their tremendous support in collecting the data
from the target respondents.
Our sincere gratitude and acknowledgement goes out to our sample
respondents, city rickshaw drivers, city rickshaw dealers, city rickshaw
union, Department of Transport Management (Ithari), Traffic Office
(Biratnagar), and Biratnagar Sub-Metropolitan for providing their valu-
able time, information and insights for the study.
Finally, we would like to thank Mr. Gopal Bhujel and Mr. Gopi Shah for
helping us to reach out to the respondents and in arranging the focus
group discussion.
We hope that this paper will lend some insights on the issues city-rick-
shaws owners and drivers face on a daily basis and their difficulties in
earning a living.

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Abbreviations and Acronyms
DoTM Department of Transport Management
EV Electric Vehicle
GoN Government of Nepal
MoPIT Ministry of Physical Planning and Infra-
structure
MFIs Micro Financial Institutions
UPT Urban Public Transport
The mentioned amount in this paper is in Nepalese Currency; 1
USD = 107 Nepalese Currency as of December 17, 2015

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Table of Contents
Overview 1
Statement of the issue 2
Methodology 3
Introduction 5
Discussion on e-rickshaw 6
Findings 7
Policy Changes 15
Works Cited 18

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Overview
E-Rickshaw or city-rickshaw or city-safari as they are popularly known
are one of the latest entry in the transport system of Nepal. Flexible,
environmental friendly and affordable, these e-vehicles have been pro-
viding the answer to the connectivity issue mostly in flat terrain areas
of Nepal such as Biratnagar, Janakpur, Itahari, Birtamode, Nepaljung,
Butwal, Birjung, Dharan, Hetauda and many other cities where they are
in use. In these cities, the numbers of registered city-rickshaws is based
on a quota system. The Ministry of Physical Planning and Infrastructure
(MoPIT) adopted a policy which directed the Department of Transport
Management (DoTM) to register these e-rickshaws from its zonal of-
fices, and issued permits by fixing certain quotas for the urban centers.
It also restricted the vehicles to speed limit of 25 km per hour (Repub-
lica, March 31, 2014).
Our research is based on the city of Biratnagar, where the quota system
permits registration of 300 of these city-rickshaws. The quota allocated
may vary from one municipality to other where these e-vehicles ply on.
The government’s decision of regulating these city-rickshaws through
the quota system has brought about market distortion not only in Birat-
nagar but in other cities as well. Market imperfection has created a dis-
tortion between the demand of city-rickshaws and their supply which
has prevented customers from getting good service and caused diffi-
culty for drivers and owners to earn their livelihood.
Furthermore, the registration process for these e-vehicles was done un-
der the Ha category, i.e. license category for auto rickshaws under the
department of transport. In absence of clarification of relevant provi-
sions, the registration process is often difficult and costly for e-rickshaw
drivers. In addition to this, the rules and regulations that ensure safety
of commuters are also not clearly defined.
As per the existing guidelines provided, e-rickshaws cannot load more
than 5 passengers including the driver. However, the guideline does not
provide specific provisions that address the concerns on speed, vehicle
specifications, insurance, lane traffic and licensing procedures. All in all,
an economic analysis backed policy framework is essential to address
the concerns of both e-rickshaw drivers and its counterparts. This paper
aims at highlighting the fact that e-rickshaws need to be integrated into
the economic and social system at the policy and infrastructural level,
and acknowledged as a legitimate public transport feeder service. In or-
der to do so, the government needs to deregulate the quota system.

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Statement of the Issue
Biratnagar Sub-Metropolitan Office issued a quota system for 300 e-
rickshaws to ply on its streets. However, in reality the estimated num-
bers of e-rickshaws plying on the street are around 500 to 600, which
means 200-300 of these e-rickshaws are “illegal” and part of the grey
economy. The municipality has till date not justified the quota limit of
300 for these e-rickshaws which is significantly lower than market de-
mand (clearly seen with the number of e-rickshaws plying on the street).
The concerned authorities strictly restricted the registrations of further
e-rickshaw limiting the quota to 300. However selling and buying of
these rickshaws are still going on. The quota system is creating hurdles
to these low incomes generating people who are buying these with an
aspiration to earn their livelihood. Many of these peoples who have al-
ready invested in these vehicles are not allowed to operate and hence
their investment has become useless. Even if they decided to ply on the
streets, the existing policy renders their activities as unlawful and pe-
nalizes them. In a democratic country like Nepal, it is ironic to see such
policies being implemented that prevent individuals from trying to earn
from their investments.
Furthermore the registration process of these e-vehicles remains un-
clear especially in terms of their category and safety regulations. The
MoPIT decision allows the e-rickshaws to operate on the streets once
they ensure road worthiness and pass the required driving test conduct-
ed by government technicians. However, in reality, the category of these
e-vehicle and the guidelines regarding their licensing examination are
largely unclear. Although these e-rickshaws have been registered under
the Ha category, i.e. Light motor vehicles- auto rickshaw, they do not fall
under this category as they are not motor-powered vehicles but electri-
cal vehicles (that runs on battery power).
Hence, to address these problems Policies need to be drafted that ad-
dresses the following issues of e-rickshaws:
• Economic and legal justification in policy framework for e-
rickshaws industry
• Roles and responsibilities of the stake holders involved
• Registration procedures
• Infrastructural changes in the urban cities.
• Safety standards and penalty clauses.

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Methodology
The data used in this research is Primary data. Primary data was col-
lected through randomly selected structured questionnaire survey and
interviews with stakeholders.
Survey sample
We used snow-balling and random sampling method to identify our
survey respondent. We requested the e-rickshaw dealers to provide us
with the name list of the e-rickshaw drivers they had in their database.
We also went to one of the main street junctions in Biratnagar- Mahen-
dra Chowk and randomly selected e-rickshaw drivers on the street for
our survey. The survey was carried out by five enumerators.
The questionnaire included of mostly close-ended questions, except a
few open-ended one. We divided the survey questions in four parts to
glean information as per the findings of initial interviews with govern-
ment officials, e-rickshaw dealers and e-rickshaw drivers. The first part
was to identify the nature of the ownership, the second to identify the
ease of access to finance, third regarding the registration process, and
finally the difficulties faced by the e-rickshaw due to legality issues.
In order to understand the issue better, we also held focus group dis-
cussion between concerned e-rickshaw dealers, e-rickshaw drivers. To
understand the legal side of the issue we interviewed officials from the
Municipality, the Department of Transport, and Nepal Traffic Police.
In order to understand the demand side, we designed a questionnaire
for consumers. Random sampling was used for this. The questions for
the consumers were mostly close-ended. We chose Mahendra Chowk,
one of the busiest junctions for consumer survey.
After completing the data collection, each questionnaire was edited to
maintain high quality of data. IBM SPSS 20.0 was used for data entry
and analysis. Simple descriptive analysis is used on the data. The types of
analysis predominantly used were frequency/ percentage tables, cross-
tabulation.

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Limitations:
Some of the limitations of our survey are as follows-
1. Our study was only focused in Biratnagar and did not include
other areas where e-rickshaws are in use.
2. Some of the respondents did not wish to answer some ques-
tions regarding income, problem they faced on the road, due to
which we had few missing data in our survey.
3. The total number of e-rickshaws plying on the street is still not
clear. Estimates are around 500 to 600 out of which 300 are reg-
istered. Assuming the number to be 500 we surveyed 10% of the
e-rickshaw driver.
4. For our consumer survey, we surveyed 50 people based on ran-
dom selection method at Mahendra Chowk, one of the busiest
streets of Biratnagar.

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Introduction:
E-rickshaw in recent years has become a choice of commute due to its
advantages (affordability, ease of commute and environmental friendly
nature) in many developing countries around the world including Thai-
land, Egypt, and India. These vehicles known by many names are used
in Nepal’s Terai belt which has flat lands. But they are also operating
in few hilly regions (comparatively elevated areas) of Nepal namely
Dharan and Hetauda. Ever since their entry into the market, e-rick-
shaws have received both applauds and criticisms. They also face lot of
oppositions from other public vehicles who believe that e-rickshaws are
stealing away their customers. A number of protests have taken place
in various cities by micro and bus drivers in order to drive them out
of the market. The Municipality of Biratnagar had decided to allow the
rickshaws to run on ten routes in the inner city. However, the rules do
not allow them to ply on the highway route and pick-up passengers, but
the rules have not been strictly implemented yet. Fares are often decided
on a word to mouth agreement by the dealers and drivers as per the
route. At this point, entry of e-rickshaw as an economic and environ-
mental friendly feeder service to the main public transportation system
remains challenging. Not having proper policy framework on e-rick-
shaw has made people suffer in many different ways who want to pursue
their livelihood through these means. 1100 e-rickshaw registration in
Koshi (Personal communication, Bishnu Poudel, December 21, 2015)
and 1000 in Mechi Zone (Personal communication, Janardan Acharya,
December 21, 2015) suggest that despite the existing challenge, number
of e-rickshaw is in increasing order and there is more market demand
for it (These numbers does not include the unregistered rickshaw, which
exists in large number in the market place).

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Discussion on e-rickshaw:
Informal transport services, according to Cervero and Golub (2007),
are described as vehicles that include three wheelers, minibuses, taxi
and such that operate without official endorsements, and mostly owned
by individuals. They are mostly para-transits that provide door to door
services, picking up passengers in undesignated spots largely in urban
areas. Informal transport services are also defined as a system that is
independent from the formal system which often do not have rules and
regulations clearly defined and implemented in regards to license, ve-
hicle registration, traffic, and technical standards to ensure passengers
safety (TERI, 2012). Intermediate-para-transit vehicles does not always
fall under informal transport service as para-transit vehicles in coun-
tries like India have regulations in terms of vehicle registration, tariffs,
as well as safety and emission regulations. However, this para-transit
service is flexible in terms of routes as it does not have designated routes
(Workshop on Informal Transport, India, 2012).
In developing countries, e-rickshaws play an important role in urban
development. They act as para-transit vehicles which connect people
who live in relatively cheaper suburban areas from their homes to the
main public transport lines or cities. They are considered a medium that
helps to connect those who are away from the main public transport
services which would take them to the cities to conduct any business or
leisure activities. Meanwhile, these informal services are also found to
be an attractive employment opportunity for low-skilled and migrant
workers in many developing cities (Cervero and Golub, 2007).
According to studies (Balassiano, 1998; Torres, 1998; Cervero, 2000)
the prevalence of these informal transport services are due to poor qual-
ity of public transit service, inefficient route design of the main lines,
poor services with regard to comfort and safety, as well as the increasing
fares and waiting time for passengers traveling via public vehicle servic-
es. Para-transit smaller vehicles such as auto rickshaws offer passengers
experience far better than traditional transport services such as easier
access, privacy, comfortable sitting room, and convenience to drivers
and riders in terms of pick up spot and the ability to navigate through
heavy traffic. (Cervero and Golub, 2007; CIVITAS 2010). However, e-

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rickshaw as a kind of informal transport service lacks official endorse-
ments and remains uninsured in many ways (Cervero and Golub,
2007). This challenge is posited by Hernando De Soto who also points
out how productivity of the informal sector was often undermined by a
lack of property right, poor access to finance and governmental inter-
ventions (de Soto, 2000).
According to Hall and Sobel (2006) (as cited in Sobel, Clark and Lee,
2007) government policy impact entrepreneurship in two ways- The
first are the inputs that go into making of the entrepreneurial process
such as education, venture capitalist and such. This first channel is also
impacted by targeted tax relief/ government subsidies or regulations.
The second is the impact of policy on the institutional structure that
determines the “incentive and rewards structure faced by economic
agents within the economy such as security of private property rights,
constraints of government action, legal and the reliance on unregulated
market price signals and freedom of exchange.”
Findings
Biratnagar Sub- Metropolitan city lies in Morang District of Koshi zone
in the Eastern Development region of Nepal. It is the second largest
city of Nepal which covers an area of 59.9 square kilometers. The sub-
metropolitan city is divided into 22 wards. Urban Passenger Transport
(UPT) is mostly provided by tempos, (three wheelers) that operate in
three recognized routes, minibuses that provide transport from Birat-
nagar’s Centre to the Indian Border, and finally pedal-rickshaws which
are in huge number. Apart from these, mini-buses which are unauthor-
ized UPT provide “taxi-style” services. Transport services in Biratnagar
have serious deficiencies with the lack of designated parking spaces, less
number of UPT especially microbuses and tempo causing overcrowd-
ing. Although rickshaws are readily available, they are considerably ex-
pensive, with fares being decided through bargaining (ADB, 2014).
Demographics – Age and Educational Level
Of all the people we have surveyed, the median age was found to be
32.4, with the youngest being at 17 and the eldest at 60. Out of the total
respondents, a large number had attained education level from grade 6

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to 8 and 8 to 10. Only 7 percent had a high school degree or equivalent.
Meanwhile, 5.4% percent had never attended school and the rest had
only attained primary education.
Ownership Status –Owned Property versus Rental Property
Out of the all drivers surveyed, 84.62% claimed their rickshaws as
owned properties compared to 15.38% who claim to have rented their
vehicles. The data shows that drivers have a high willingness to purchase
their city-rickshaws, which indicates a high market demand for these
three wheeler e-vehicles.
Legality
According to our survey sample, out of the total number of city-rick-
shaw owners, 67.3% were registered and 17.3% was unregistered. Of
the ones who rented the city-rickshaws, 13.5% drove registered rick-
shaws 1.9% of the total city-rickshaw renters drove un-registered city-
rickshaws. Due to the Municipality decision to give registration to 300
city-rickshaws, about 300 other city-rickshaw drivers are forced to be
part of the grey economy.
Due to their illegal nature of operation, they are often subject to higher
risks regarding road safety and losing the ownership of city- rickshaws.
Furthermore, their illegal status makes them vulnerable to attacks such

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as extortions. Legality also determines how much a city-rickshaw driver
can earn. Having the right to travel on the main road allows them to
get more passengers. Furthermore, the illegal nature means the higher
chances of being fined if caught plying on the main streets.
Distortion in Market Equilibrium by route permits and regis-
tration hurdles
Regulating the market through the quota system creates distortions in
the market equilibrium between market demand and supply. Due to the
quota system, many dealers are registering the city-rickshaws from cit-
ies that are nearby Biratnagar like Rangeli and Duhabi. When these city-
rickshaw drivers are caught plying on the streets by the Traffic police,
they are fined because according to the Traffic Police they cannot pick
passengers outside their jurisdictions. However, this does not apply to
pedal rickshaws that are plying on Biratnagar’s streets.
Market distortion of market equilibrium was best illustrated in the case
of the “Law of unintended consequences”. Unlike what Adam Smith
claimed invisible hand as a guide to market equilibrium between the
demand and supply, the ‘Law of unintended consequence’ distorts con-
sumer behavior and causes harms instead of strengthening the economy
as the government intended to do. (Norton, 2007).
Another example of “Law of unintended consequences” has been dem-
onstrated by the case study of the auto-rickshaw of Chennai City (CI-
VITAS, 2010). Various laws issued by the Government of Chennai, in-
cluding a ban on issuance of permits for new 3-seaters auto-rickshaw,
and auto-rickshaws to ply on certain streets have seriously distorted the
market equilibrium. These bans were carried out to alleviate road con-
gestion. Apart from the ban, the Government of Tamil Nadu has al-
lowed the registration of 5+1 seater Vikram autorickshaws which does
little to improve the situation.
The city-rickshaws in Biratnagar are allowed to ply on 10 routes which
do not include the highway. As per the rule they can pick passengers
from Point A of these main roads and drop them off at the highway
(Point B). However, according to the rule they cannot carry passengers
from the highway (Point B) to another Point A. If they are caught by
the traffic police, they are liable to pay fines. This rule reduces the ef-
ficient utilization of the city-rickshaws creating “Dead Headings”. Dead

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headings incur additional cost of transportation to the driver and due
to this city-rickshaw drivers could refuse service to the customers, or
even if they do, they could pass on the additional cost to the passenger
by charging them more money, i.e. making them pay for the empty seats
too. This has been noted in the study conducted by De Vany 1977 (as cit-
ed in the report by the Federal Trade Commission Bureau of Econom-
ics on “An Economic Analysis of Taxicab Regulation, 1984) which was
analyzed the tax-cab behavior in metropolitan cities of the United States
where taxicab licensing prevented drivers from picking passengers from
outside their jurisdiction which meant the taxi’s utilization in terms of
their occupancy per mile decreased. These metropolitan included cit-
ies “fragmented into independent political jurisdiction” and companies
that had exclusive franchise especially at the airports.
One of the reasons given by the authorities for not allowing city-rick-
shaws to pick passengers on the highway includes the possibility of ac-
cidents as well as higher chances of drivers and passengers sustaining
serious injuries compared to heavy vehicles. This argument could be
reasoned if we look at the haphazard parking of the city-rickshaws on
the main highways during the rush hour, where city-rickshaw might
stop wherever the passengers stop them, then that could cause acci-
dents. However, if there is proper city-rickshaw stands allocated in the
highway route, this could be avoided.
Regulatory hurdles over registration do not only affect the quality of
service, it also creates a space for rent seeking. With regulations over
registration, the price of City-rickshaws would increase more than their
actual value. It may also encourage the existing owners to create a mo-
nopoly, which will ultimately leave the consumers without any other
choice and force them to pay higher cost than in the competitive mar-
ket. With limited registration quota, the possibility of rent-seeking from
officials and dealers would increase. Also the cost of registration would
become higher from a new comer’s prospective who are seeking to earn
a living through this trade.
The fares of the city-rickshaws has not been mandated by the govern-
ment but is based on an unwritten agreement between the city-rickshaw
dealers and drivers. However, due to the limited registered city-rick-
shaw, city-rickshaw owners, or dealers could come together to create a
lucrative franchise. With limited number of registered city-rickshaws

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that can ply on the main street, creating a franchise under a firm would
mean creating a space for monopoly. This would mean that the firms
demand will not be elastic to the price.
Drivers would have the opportunity to quote a high rate for each ride.
Profit per driver would increase, given the small number of registered
city-rickshaws. They could also deny service to the customers if the sum
the customer offers does not meet their expectations. City-rickshaw
owners who rent out their vehicle could increase the daily rent charge
for drivers too. Since, the rent is not done on a written contract basis;
owners can decide to rent it out to the driver who is willing to pay them
more. This means the drivers who rent out city-rickshaws would have
added pressure to ensure they get more customers on a daily basis.
Access to Finance
From our survey, we found out that the city-rickshaw owners had got
loans and finance from multiple sources, i.e. friends and family, savings,
banks etc. From the total survey respondents, 38.6% got funds from
friends and relatives, 67.4% accessed funds from financial institution,
9.3% from their savings and 18.2% of the total respondent stated other
means of funding, which according to the survey comprised of gold.
Of the total survey respondents who had accessed loans from financial
institutions, 71.4% took out loans from cooperatives, 14.3% from micro
financial institution, 10.7% from Development Bank and 3.6% from Ag-
riculture Development Bank.
One of the reason stated by the respondents that made it difficult for
them to approach financial institutions, especially bigger banks was the
amount of paper work required, which included valuation, as well as
placement of collateral, time period, and the uncertainty of whether
their loans would be approved.
This is also reported in the report “State of Microfinance in Nepal,” by
Shankar Man Shrestha for the Institute of Microfinance (2004) which
highlights the role of micro financial institutions (MFIs) in Nepal for
poverty alleviation. The microfinance consists of formal and informal
sector with the formal comprising of the commercial, development, sav-
ing and cooperatives, SFCL and NGOs. Majority of the loans, i.e. nearly
three quarters are from the informal sector. The main reasons for the
majority of the people’s choice for acquiring loans from the informal

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sector despite the high interest rate is reported to be due to the short
period for loan delivery, the ease of access and the flexibility with ap-
proval on the maximum amount a person is able to receive. The report
states that despite the claims by the bureaucracy and elites circles which
states that MFI’S charge higher loans to the poor, the poor people seek
MFI’s service due to the lack of collateral required for the loan and the
less lengthy formality, i.e. paperwork.
However, our survey report found that a large percentage of people who
had taken loans from cooperative had to place collateral. Furthermore,
the need to place collateral was seen higher in the survey respondents,
i.e. 51.7% who had taken loans from cooperatives with loan maturity of
1 to 2 years. But our interviews with city-rickshaw owners did recon-
firm the fact that most of them had approached MFI’s due to the less
paperwork, i.e. property valuation, bank statement, required by them to
access the loans.
Out of the total respondents who had taken loan from cooperatives,
52.9% stated having put up their private property and 11.8% stated that
they put their e-rickshaw as collateral. Of the ones who had taken out
loans from Micro finance, 17.6% placed their private property as collat-
eral and 5.9% deposited their belongings such as gold and silver. Mean-
while 5.9% each of the respondent who had taken out loans from Devel-
opment bank and Agricultural Development bank placed their private
property as collateral. 82.4% of the total respondents who had taken out
loans from various financial institutions put up their private property
as collateral.
Where did you get the loan from?(financial institution) * If yes what did you place
as collateral? Cross tabulation
If yes what did you place as
collateral?
Total
Private
property
City
Rickshaw
Other
Where did you
get the loan
from?(financial
institution)
Cooperative 52.9% 11.8% .0% 64.7%
Micro Financial
institutes and
others
17.6% .0% 5.9% 23.5%
Development Bank 5.9% .0% .0% 5.9%
Agriculture
Development Bank
5.9% .0% .0% 5.9%
Total 82.4% 11.8% 5.9% 100.0%
Table 1: Total percentage of City-rickshaw owners (both registered and un-registered)
placement of collateral for loans from financial institutions.

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Licensing procedure
City-rickshaws have been registered under auto- rickshaw, a light motor
vehicle category which also includes three wheelers such as tempo. Un-
der this, City Rickshaw registration has been done under Ha (Public).
The table illustrates the category.
Zonal code Private Public Governmental Corporation Tourist
As mentioned
in Clause (a)
Sa Ha Ksha Tra Pa
Tra Ksha Ha Sa Ya
Ksha Tra Sa Ha Ya
Ha Sa Tra Ksha Pa
(Source: Motor Vehicles and Transport Management Rules, 2054(1997)
Table 2: Light motor vehicles Registration Categories (three wheelers such as tempo and auto rick-
shaw)
However, electric-rickshaws are e-vehicles for which the government
does not have a separate provision. In order to start its licensing proce-
dure, proper guidelines regarding the license test needs to be devised,
according to Raghubar Shah, head of the License office Biratnagar Ko-
shi, at Itahari (Makalu Television, 2015). In absence of proper guidelines
for registration and licensing procedures, city-rickshaw drivers will have
difficulty in ensuring their legal status. Furthermore, they are not guar-
anteed property rights either. According to Shah, in case of accidents or
such, even if the city-rickshaws have bought insurance policies from the
insurance company, insurance companies will not release the amount
until unless the city-rickshaw driver can provide a license.
A few city- rickshaw drivers from our survey had stated purchasing in-
surance; the procedures facilitated by the dealers they bought their city-
rickshaw from. Moreover, without a license for e-vehicle, if in case they
ever get into an accident resulting in someone’s death, the city-rickshaw
driver can get charged with manslaughter with a 20 years jail sentence
(Personal Interview, Raghuvar Shah, July 7, 2015). This further pulls the
city-rickshaw driver into the vicious circle of constant battle for the legal
nature of their work.
Earnings
Out of the total city-rickshaw owner, 16% each stated that they earned
Rs 300-600, and Rs 600-900. 28% stated that they earned between Rs
900-1200 and 20% stated that they earned between Rs 1200-1500.

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On the other hand, only 2% drivers who rented city-rickshaw stated
that they earned more than Rs 1500. 6% stated that they earned be-
tween1200-1500. 4% stated their earnings to be Rs 900-1200 and 2%
each stated their earnings to be Rs 300-600 and Rs 600-900. The findings
pointed out that ownership increased the possibility of higher earnings.
Do you ride your own rickshaw or rent one? * How much do you earn on a daily basis? Cross
tabulation
How much do you earn on a daily basis?
Total
300-600 600-900 900-1200 1200-1500
1500 and
more
Do you ride your own
rickshaw or rent one?
(own) 16.0% 16.0% 28.0% 20.0% 4.0% 84.0%
(Rent) 2.0% 2.0% 4.0% 6.0% 2.0% 16.0%
Total 18.0% 18.0% 32.0% 26.0% 6.0% 100.0%
Table 3: Earning and Ownership.
Legality also affected the earning of the city-rickshaw drivers. City-rick-
shaw drivers who were registered could ply on the main street and their
earnings could reach up to Rs 1500 or more. Meanwhile, un-registered
drivers earnings were limited to Rs 900.
The survey also found that a large majority of city-rickshaw owners and
renters were dependent on their daily earnings to run their household.
78.4% out of the total 84.62% of the total city-rickshaw owners and
13.7% out of the 15.38% city-rickshaw renters of the survey respon-
dent stated ‘Yes’ to their income being used to run the household. These
numbers shows the need to bring about appropriate policy changes and
deregulating the quota system to ensure the right of city-rickshaw own-
ers and drivers to earn their living.
Fig2: Ownership and Spending

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Difficulties faced by City-Rickshaw drivers
The confusion in their legal stature and definition has created many hur-
dles for this e-vehicle. According to the survey a large majority of city
rickshaw drivers both registered and on-test, respondents mentioned
how they faced problems from the traffic police. The problems faced by
the city-rickshaw drivers are-
• As they have not been designated proper stops, stopping at a point
and loading passenger makes them liable for fines.
• The addition of one more passenger makes them liable for fines.
• Unregistered (on-test) vehicles are not allowed to ply on the street.
Doing so would mean a fine of Rs 1000.
To avoid such confusion, the government needs to assign these vehicles
under the e-vehicle category. Plus, setting safety standards, baggage lim-
it, checking roadworthiness and such would help in ensuring that these
e-vehicles will be integrated to the feeder service effectively.
Policy changes
Legal Status : Provisions in Transport Laws for e-rickshaw has to be
introduced as an e-vehicle. Battery powered 125 Ampere battery and a
minimum 1000 watt motor to be governed by Municipal Corporation.
There is a need for licensing procedure under e-vehicle which guaran-
tees their access to insurance policy which would strengthen their prop-
erty rights. As of now, e-rickshaw drivers do not have license due to
which if they are involved in any accidents as such even if they have an
insurance policy, they cannot claim it since insurance companies do not
release the insurance amount without a valid license. This means that
if they get into any unfortunate accident, they would have to arrange
money for repairs and compensation to third party by themselves. In
many cases that would mean seeking out loans from loan sharks at a
higher interest rate, or through MFI’s where the interest rate is high.
Finance : Provisions for financing e-rickshaws should be eased through
appropriate processes. Minimal interest rates with ease of formalities
should be enabled for supporting e-rickshaw drivers and owners. Ease

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of access to finance should be enable those city-rickshaw drivers who
rent them to become owners’ themselves. With the government’s help,
customized finance schemes for these e-rickshaws can be developed
which would promote electric vehicles. Furthermore, policy needs to
encourage financial operation through a regulated market action where
all the stakeholders involved, i.e. suppliers, owners and financial institu-
tions need to take an active interest to develop the market.
Operation : The Biratnagar city is fast expanding. This is an opportu-
nity for such environment friendly vehicles to become better alterna-
tives as they are ecologically and economically beneficial compared to
petroleum driven vehicles. As of now, the Municipality of Biratnagar
has allocated 10 permit routes for these e-rickshaws. These mostly fall
in the main road. Given its flexible nature, there is no doubt that they
can be used as a feeder service in areas far from the main road. Fur-
thermore, they can be answer to the last mile connectivity issue from
work, home, and the market place. It can connect passengers from areas
that are not connected with the main transport mode. Considering the
current scenario, e-rickshaw should be allowed to ply on the highway
routes, since the present route allocated to these vehicles are inadequate
and the current rules excludes the e-rickshaws from using the highway
which runs through the center of the city. Moreover these are the routes
where these e-rickshaws pick up most of the passengers. So, not allow-
ing them to operate on these routes will cause them to lose most of their
passengers. One of the reasons given by the authorities for not allowing
city-rickshaws to pick passengers on the highway includes the possi-
bility of accidents as well as higher chances of drivers and passengers
sustaining serious injuries compared to heavy vehicles. But if there is
proper allocation of e-rickshaw stands, dedicated stops and traffic man-
agement, this problem can be resolved. Moreover speeding up the ongo-
ing constructions of highway, inner and alternative routes to highways
will greatly ease the operation of these vehicles. This will also ease up
traffic congestion and address future concerns
Registration : Registration process should be simplified with a one-
window approach, reducing the number of line agencies involved. Since
the unregistered low income e-rickshaw owners have already invested
in e-rickshaw, Municipal authorities should open the registration pro-

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cess to the unregistered e-rickshaw and allow them to be the part of the
formal economy. The present policy of introducing quotas systems has
had bad repercussions in the overall market as they have distorted the
demand and supply chain. Hence the government should abolish the
quota system and allow the market to function based on the demand-
supply chain.
Quality of Service : Regulations that concerns the drivers qualifica-
tion, (age limit, health, criminal records etc) vehicle safety as well as
insurance coverage would increase the quality of the city-rickshaw ser-
vice.

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Works Cited
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port Planning and Management. Final Report Vol-1:
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sidered during the process of regulation. (Transporte Por
Vans-O Que Considerar No Processo De Regulamentac-a˜
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Bishnu Poudel. Personal Communication. December 21, 2015
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Civitas Consultancies Private Limited (CIVITAS). ( 2010). Study
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Makalu Telvision. (10 July 2015).Sarwazanik Sunwai(Public
Hearing) on “City Rickshaw as a Problem or Solution?”.Bi-
ratnagar: Makalu Television.
Norton, Rob.(2007). The Concise Encylopedia of Economics,
Chapter: Unintended Consequences. Second Edition. Re-
trieved from: http://www.econlib.org/library/Enc/Unin-
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Personal Interview. Raghuvar Shah. July 7, 2015.
Republica. (2014, April 1). Govt to allow electric rickshaws in
urban centers. Republica. Retrieved from: http://myrepub-
lica.com/portal/index.php?action=news_details&news_
id=71965#sthash.jsDyV5Ed.dpuf
Shrestha, Shankar Man.( 2004). State of Microfinance in Nepal.
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of_micro/Nepal.pdf
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barriers to entry, entrepreneurship, and economic progress.
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Cape Town, South Africa, Balkema, Rotterdam

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Bikalpa-an Alternative
Mahendra Margh, House no 4, Mahendra Chowk, Biratnagar-15,
Morang, Nepal
Email: bikalpabrt@gmail.com
Website: www.bikalpa.net
Bikalpa-an Alternative is a public policy think tank, working on a
grassroots seeks to develop the culture that favors individual and
economic freedom in spears of personal life and policy issues. It
strives to do so through research, education and civic
engagements.
Vision: Bikalpa-an Alternative envisions a Nepal where rule of law
is supreme and citizens can exercise their natural rights to life,
liberty and property in a vibrant and free society.
Mission: To defend the fundamental rights of the citizens, spread
the idea of freedom and prosperity through research, education and
public engagement to create a free and open society which is based
on democratic principal.
Bikalpa-an Alternative