Riding nowhere: Tuk-tuk parable of protectionism
View(s):Organised groups of local tuk-tuk drivers were reported to have harassed tourists and clashed with drivers attached to ride-hailing platforms like PickMe and Uber.
Foreigners driving local tuk-tuks.
Protests against app-based transport services have steadily escalated. Confrontations and violent incidents targeting ride-hailing drivers are now becoming a daily occurrence. Among the general public, these local tuk-tuk gangs have earned the notorious label of the “three-wheeler mafia”. The label reflects not just their behaviour, but the broader economic trap: a sector that resists change, demands protection, and in doing so, exploits both commuters and tourists.
It is not my intention here to take sides in these clashes. What is more important is that the tuk-tuk conflicts reveal deeper economic, political, and political-economic issues. Let us take a closer look at some of them.
“My road, my style”
This is not the first time I have written about tuk-tuk issues. Back in 2018, I published a column under the title “Tuk-tuk driver who wanted a future.” It was based on a true incident: a young tuk-tuk driver who applied for the post of Office Assistant at a company.
The director of the company – a foreigner, who was interviewing him was astonished to learn that the applicant was willing to accept a salary only one-third of what he earned driving a tuk‑tuk. When asked why, the driver replied simply: “I wanted to have a future for myself.”
His answer was both intelligent and visionary. For many young people, becoming a tuk-tuk driver — often with the encouragement of their families — marks the end of their future career path. It provides income, but not the opportunity to develop job skills, soft skills, or the discipline of working under an authority in a structured environment.
Too many tuk-tuks?
As the country’s economy improves and people enter the high-income brackets, tuk-tuks are something to become obsolete! Although Western tourists may love to ride tuk-tuks for different reasons, in advanced countries in the West such primitive modes of transportation do not exist. When a more advanced mode of public transportation is available and a private motor car is affordable to every family, why do they choose a tuk-tuk ride? Perhaps, by that time only tourists might be interested in using tuk-tuks.
Some 100 years ago, people of Sri Lanka had bullock carts for transportation. But today, we hardly use them as means of transportation, other than for tourists who love to take a ride in such primitive vehicles. Even the type of public buses that are running on our roads would go out of our transport system in another few years.
By June 2025, the total number of tuk-tuks in Sri Lanka had reached 1,186,220. This means that out of our 8.2 million employed labour force, about 15 per cent are tuk-tuk drivers! Even if a significant number of tuk-tuks in the country are for private use, it is quite likely that we would still end up with a disproportionately high share of tuk-tuk drivers in total employment.
Although a business activity is usually aimed at exploiting an opportunity, we could also argue that a greater number of tuk-tuks in the country is a result of not only the failure of the public transport system, but also of the failure of the economy to create more productive jobs elsewhere.
Low price, high demand
The tuk-tuk story is a textbook example of supply and demand gone wrong. With over 1.1 million tuk-tuks on the road, the supply far exceeds the genuine demand for their service. Yet instead of lowering fares to attract more rides, many local drivers cling to inflated prices, earning only one or two trips a day and idling for hours at tuk-tuk parks. Their reputation for harassment and overcharging further reduces demand.
App‑based platforms, by contrast, match supply with demand more efficiently. A tourist, booking a ride from Ella railway station to Nine Arch Bridge or from Sigiriya to Pidurangala Rock, might pay Rs. 300 or even less. The same trip with a local tuk-tuk could cost three to four times more. Lower prices mean higher demand, more rides, and better utilisation of vehicles.
But instead of adapting, local drivers demand protection. They pressure authorities to ban app-based services in tourist hotspots like Ella, Sigiriya, Kandy, Unawatuna, Galle, and Negombo. In effect, they ask the government to shield inefficiency and block technology. The logic is stark: if competition threatens survival, eliminate competition.
This is where the trap lies. If the government bows to such demands, it signals that innovation and efficiency are punishable, while inefficiency and rent-seeking are rewarded. The alternatives are equally damaging: banning ride-hailing apps means rejecting new technology altogether, while nationalising them would turn dynamic, competitive businesses into sluggish state enterprises. Either way, consumers lose — paying higher fares, enduring poorer service, and subsidising inefficiency.
Parable of protectionism
Local tuk-tuk drivers charge high fares, secure only a few rides, and spend much of the day idle. Their poor reputation further reduces demand. Commuters must pay inflated prices when they have no alternative. In contrast, app-based tuk-tuks offer lower fares, attract more commuters, and keep vehicles productively engaged. Consumers benefit from lower prices and wider choices.
This is a microcosm of how protectionist demands play out nationally.
Why has Sri Lanka been unable to open its markets and prosper by integrating competitively with the global economy? Had we expanded beyond local boundaries, businesses would have faced competition, improved their products and services, and the nation would have prospered.
Instead, many businesses resemble the local tuk-tuks. They target only the domestic market, charge high prices, deliver substandard goods, and rely on lobbying rather than efficiency. When threatened by more efficient competitors from abroad — just like app-based transport services — they demand government protection through tariffs, subsidies, or import restrictions. The irony is that instead of reforming their practices, they seek to block competition, preserving inefficiency.
Just as commuters pay inflated fares to local tuk-tuks, consumers at the national level pay higher prices for protected goods. Protection shields inefficient producers, depriving the public of cheaper, better alternatives. The burden of inefficiency is shifted onto the people: fewer choices, lower quality, and higher costs.
The tuk-tuk conflict is not just about transport. It is a parable of protectionism: entrenched interests resisting change, governments trapped in their demands, and consumers left to pay the price.
Pressure on policymaking
At the national level, the tuk-tuk story illustrates the irony of protectionist demands. Businessmen, like idle drivers charging high fares, often resist innovation and efficiency. Instead, they lobby for protective barriers that force consumers to bear the cost of their inefficiency.
While these demands are justified in the name of safeguarding jobs or national pride, the reality is exploitation: consumers are denied affordable, high‑quality alternatives and must subsidise inefficiency through inflated prices. Protection, in this sense, is less about defending the nation and more about defending entrenched interests — at the expense of the very people the economy is meant to serve.
Businessmen, like tuk-tuk unions, exert influence through votes, campaign funding, and organised pressure. Governments fear losing political support if they refuse protection. Even inefficient industries employ people, and policymakers worry that removing protection will cause job losses and income shocks.
Protection is often framed as defending “local pride” or “national sovereignty.” In such contexts, governments hesitate to appear unpatriotic by opening markets. Protection buys temporary calm, while reform requires painful adjustment. Too often, governments choose the short-term fix at the expense of long‑term progress.
Ugly beauty
And yet, we are still to hear clear comments from politicians on the tuk-tuk issue. I doubt if there would be any, by our experience. Even if they understand that market competition delivers better outcomes, they are unlikely to speak in favour of it at the expense of votes.
That is the ugly beauty of democracy: the ballot box rewards populism, even when it punishes progress. There are, however, countries which have set the boundaries of democracy with rules of the game, and work with better policy outcomes.
[The writer is Emeritus Professor at the University of Colombo and Executive Director of the Centre for Poverty Analysis (CEPA) and can be reached at sirimal@econ.cmb.ac.lk and follow on Twitter @SirimalAshoka)].
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