Growing Digital Division in Nepali Taxi Industry

Published On: September 6, 2021 07:00 AM NPT By: Shradha Khadka

With the prevalence of on-demand transportation apps like Pathao and Sarathi, people no longer have to wait in the rain to flag down a taxi or spend time bargaining for taxi fares. Instead, rides can be hailed comfortably with just a few clicks on the smartphone screen.

B Thapa, a veteran taxi driver residing in Lalitpur responded with a flustered look when I asked him, “eSewa chhaina Dai ko?” (You don’t have eSewa?). Fumbling through justifications I did not ask for, he declared that he does not have the need or will to learn to use eSewa.

Thapa has been in the taxi driving occupation for over 25 years. Without an active interest, required knowledge, or desire to branch out to other fields of work, driving a taxi has been his source of income for more than two decades. As the sole breadwinner of the family, being able to afford good schools for his three children and occasional gifts of jewelry for his wife was a matter of great pride for Thapa. However, in the recent few years, the 55-year-old taxi driver has faced unforeseen challenges in his occupation and is thinking of quitting the taxi industry to permanently head back to his village.

Pandemic and public transportation sector

The public transportation sector has been identified as one of the hardest hit sectors by the effects of the ongoing Covid-19 pandemic. In the absence of fundamental worker’s benefits, social protection and various safety net provisions, transportation sector workers in Nepal were already vulnerable to irregular working hours, fluctuating income, harassment and were largely susceptible to effects of economic and social shocks even before the public health crisis.

Now, they are facing additional challenges brought upon by the pandemic-induced lockdown restrictions and health and safety demands. Furthermore, drivers who own their public transport vehicles like Thapa are facing additional burden of vehicle loan installments without any concession from banks or the government even amid the strain of the pandemic.

“My taxi stayed idle for 8 months. I was constantly worried that it would gather rust, or the battery would drain. No customers, no income, yet I paid my installments regularly during the lockdown. But you know, even if it was not for Covid, these online drivers were already making my life difficult”. Thapa said, throwing his Dhaka Topi on his lap.

In sheer frustration, he directed his initial frustrations toward other taxi drivers who opted to jump on the digital bandwagon early on, but also followed that sentiment up by expressing remorse for not learning about smart phone technologies himself sooner.

Digitization of taxi services and the widening digital divide

The rapid infiltration of new technologies in citizens’ everyday lives has contributed significantly to public convenience and consumer safety, especially now that restrictions induced by the Covid-19 pandemic and fear of virus transmission has minimized traditional in-person interactions, use of digital systems like scanned codes for payment have increased, and mobile banking and ride-hailing apps have become more popular.

With the prevalence of on-demand transportation apps like Pathao and Sarathi, people no longer have to wait in the rain to flag down a taxi or spend time bargaining for taxi fares. Instead, rides can be hailed comfortably with just a few clicks on the smartphone screen.

The popularity of such digital economic platforms have spread like wildfire since 2016, alleviating the lives of the population but also making business more competitive for people like B Thapa who are unacquainted with smart phone apps and smart technologies.

Digital divide and informality in gig platforms 

The term ‘digital divide’ refers to the economic and social gap in terms of knowledge and access to Information and Communication Technology (ICT) infrastructures and its impacts. Various socio-demographic factors like geographic area, age, gender, income, and educational level can play a role in the existence and intensity of digital divide.

Simultaneously, these factors also influence the existence and intensity of the informal economy. As reported by a recent study, more than six million Nepali workers are employed informally. With close to 4,00,000 public vehicles operating in Nepal, nearly 200,000 transportation workers are now vulnerable to job loss and health insecurities.

Since consumer priority in recent times has dramatically shifted to reducing the risk of Covid transmission, mobility apps can be advantageous in reducing physical contacts. Digital gig-economy based platforms are already serving as a resolution in this matter. However, such platforms are also fueling the informal economy. Within these platforms, issues of irregular wages, absence of legal contracts, unstable working hours and exclusion from social protection networks largely exist. Without a regulatory body to monitor implementation of labour laws and ensure workers’ well-being, gig platforms will only contribute to expanding informality in the workforce.

Digital transformation and adaptation

The taxi industry in Nepal is already on its way to a digital revolution and has genuine potential to benefit both transport workers and consumers. However, the transformation will need to be supported by precise policies, regulatory frameworks, infrastructure, and skilled workforce.

The existing feuds between gig platform-based ride service providers and conventional taxi drivers and recent public demonstrations held by transportation workers show a broad gap between policy regulations and the actual reality of workers and stress lack of government concerns in implementing a fair and favorable work environment for them.

Nevertheless, painting a positive outlook, the recent national budget announcement for FY 2021/22 fundamentally focuses on improving ICT policies and infrastructures to develop technologically sound human capital and increase current digital literacy rate in Nepal which stands at mere 31 percent. If this commitment is enforced effectively, it can take the form of various upcoming government interventions that can potentially benefit the public transportation sector by ushering in a digital revolution in space.

Narrowing the gap

A brief interaction with B Thapa on my ride from Jawalakhel to Maitighar opened up a lot of concerns and possibilities brewing in the Nepali taxi industry. The state is geared up to bring digital interventions in Nepal and the existing concerns raised by the digital divide can potentially be resolved. Now that the pandemic adaptation measures have majorly opened new doors for digital services, regulatory frameworks, policies and plans must also evolve with the newly introduced disruptions. 

Time is crucial more than ever to gather evidence-based studies and research to recognize the actuality of workers and intervene where it is needed the most. For example, authorities in charge of allotting new taxis and license plates, can perhaps provide the drivers basic technical knowledge. Social dialogues within the taxi communities or with trade unions and government representatives may help generate concrete policy interventions that adequately address the vulnerabilities of the unskilled, uneducated, and digitally challenged workers.

Perhaps then, hard-working people like B Thapa can feel protected and content in their preferred line of work.

(The author is a researcher at the Centre for Social Change.)

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