Modernizing Cycle Rickshaws and Bicycles

Modernizing Cycle
Rickshaws and
Bicycles
Evidence from India,
Indonesia, and Africa
Bogota, 2003

Traditional Rickshaws are Losing
Passengers in India Because…
• Not very comfortable with no sun protection
• Very heavy, and the passenger feels guilty
• Associated with backwardness
• Dangerous roads
• Hostile traffic police

Why Should We Care?
• Reduces traffic congestion
and air pollution
• Increases the incomes of the
poor
• Improves basic mobility and
safety for women and children
• Improves the health and
reduce the drudgery of cycle
rickshaw operators.

Why Government Authorities Are
Sometimes Hostile to Cycle Rickshaws
• Control rural-urban
migration
• Image of Backwardness
• Motorists complain
they block the road
• Taxis and motorcycle
rickshaws are more
powerful politically.
• Associated with crime,
riots, or social
movements.
Rickshaws Being Confiscated in Delhi

Why Governments Support Modernizing
Human Powered Vehicles
• To help the poor people
• To impose new regulations in certain areas
• To improve the image of cycle rickshaws
• To quiet, pollution-free
travel in tourist areas

Why Even Environmentalists and NGOs
Support Some Regulation of these Vehicles
• Increases wages
• Reduces the threat of crime
• Reduces the danger of accidents at night
Cycle Rickshaw unions
should be encouraged
and supported in order to
protect the drivers and
create self-regulation
Becak Union

Why the private sector doesn’t innovate on
their own
• Profit margin is too low
• Producers are risk-averse small businesses
• Consumers are risk-averse low income people
Underwriting the risks of new
product development,
marketing, and dissemination
can overcome these barriers
to modernization.

US and Indian Engineers Worked Together

10 Prototypes were developed
20 of each were sold or
leased to Cycle
Rickshaw Wallahs

The largest manufacturer
and a new competitor were
involved in the design and
marketing from the
beginning
Sunil Kumar, Hari Om
G. Shyam, Designer, (left) w/
Mr. Gupta and Gupta of Shiv
Shakti Udyog Ltd.

The Final Design (more or less)
Production Cost:
Same as
traditional
rickshaw
•30 kilograms lighter weight
•Wide, comfortable woven nylon seat
•Permanent canopy for sun and rain protection
•Integral (one-piece) frame two speed gear system

The First Trial Fleet
Was Sold to the
Wallahs at the
Sheraton near the
Taj Mahal.
A marketing firm was
hired to sell the vehicles.
There were bonuses for
each sale.

The Wallahs at the East and West Gates of
the Taj Mahal were the second sale

Press Conferences and Events with Mayors
and Other Government Leaders Boosted
Sales and Investor Confidence

Selling the traditional financiers and
fleet owners in the city of Vrindavan
led to the rapid replacement of the
entire fleet (1000 vehicles).

With big orders, the
new market entrant,
Shiv Shatki Udyog
invested in ‘mass
production.’ The
project team built
the necessary jigs.
This forced Hari Om, the traditional manufacturer,
to switch as well.

Why Did the Financiers (Maleks) Switch?
• The operators got more
passengers because the
vehicles were more
comfortable.
• The maleks were able to
charge higher rent.
• The vehicles cost only
marginally more.
• Hence, the new vehicles
were more profitable.
NOBODY (EXCEPT THE PRESS) CARED ABOUT THE HUMANITARIAN REASONS!

By the end of the project,
there were three
fully commercial
assemblers
and 2 frame
manufacturers.
Two were the traditional
manufacturers.

The Agra Frame manufacturer
opened in Delhi, and began selling
400 modern vehicles a month.
This forced the
Maleks in Delhi
to switch.

Today…
• Over 18,000 modern cycle rickshaws are
operating on Indian Streets
• They operate in 9 Indian cities
• There are over 20 maleks in Delhi and
another 10 assemblers and manufacturers of
the modern rickshaws around India.
•None of the gear systems were commercially
accepted.
•Certain elements of the traditional vehicle were
reintroduced, increasing the weight, so total
weight reduction was only about 10kg-15kg.

Impact of the Project on the Poor
• The operators (most of them are poor) earn on average
50% more income
• They pay 5% - 10% of this to the owner in higher rental
fees
• They make more per ride
• They carry more passengers per ride
• They get more rides
• They operate in areas where no cycle rickshaws
previously operated
• The 10% - 25% weight reduction reduces the
calories the operator burns per day and hence
the food they need to survive.
• They are much more comfortable for sleeping!

How Modern Cycle Rickshaw Passengers
Would Otherwise Have Made their Trip
TRAD. RICKSHAW
WALK/BICY
CLE
19%
PRIVATE
SCOOTER
2%
TANGA
15%
VIKRAM
19%
TRAD.
RICKSHAW
28%
BUS
11%
AUTO
RICKSHAW
6%
BUS
AUTO RICKSHAW
VIKRAM
PRIVATE
SCOOTER
WALK/BICYCLE
TANGA

Project Replication in
Indonesia:
Gadjah Mada University,
Yogyakarta

Trial Fleet of 20 Vehicles Went Into
Operation December 2002
One Development Bank has
ordered 400 to sell on credit

• Final Prototype is half the weight (50kg) of the traditional becak (100kg)
• All have Shimano 7 speed rear derailleur.
• The production cost is 20% higher but will be brought to parity.
• The handling is much better.
• It has much better visibility at night.
• The vehicle is somewhat more comfortable.

Modernizing the Normal Bicycle in Africa
Trek’s California Bike is the first effort by a Global
bicycle industry leader to find a market in Africa.

Obstacles to Better Bikes in Africa
• Most bike dealers are too
small to import full
container loads direct from
China or India.
• Profit margins are too low
to invest in marketing.
• Bicycles are not designed
for African utilitarian use.
• Some countries have
higher tariff barriers than
on cars.
• All bikes and parts are
imported
Accra Cycle Market

ITDP Solutions:
The Global Bicycle Fund
• Forging buyers collectives to reach
returns to scale
• Working directly with international bike
companies
• Providing credit and
technical assistance to the
African Bicycle Industry

Bicycle Caravan, Accra, Ghana,
January 2003
ITDP Solutions:
Working with
Local Government
and
the Bicycle Industry
to Promote
Utilitarian Cycling