Familiar to the urban jungles of the Indian subcontinent and Southeast Asia, the motorized rickshaw, or "tuk tuk" is making inroads into Egypt. In the five years since their introduction, the tiny three-wheeled vehicles have spread like locusts across the Delta, swarmed Nile Valley villages between Minya and Assiut, and begun cropping up in the Red Sea resorts of Al-Gouna and Hurghada. Recently, Business Monthly spotted a few of the noisy three-wheelers in Cairo.
Wherever they go, tuk tuks are carving a niche out of the local transport market, operating as taxis and couriers. One of the reasons for their success is their business feasibility. Tuk tuks are cheap, versatile, fuel efficient and profitable.
According to drivers, imported tuk tuks can be purchased for under E 17,000, paid in monthly installments. A small taxi sedan, on the other hand, may cost E 28,000 to purchase and considerably more to maintain. But the real difference is fuel consumption. The two-stroke tuk tuk engine is a notorious polluter, but consumes as little as 10 liters of fuel per day, about half the amount of a taxi sedan.
Hence tuk tuk drivers can afford to charge cheaper rates than the ubiquitous taxi sedan, while maintaining higher profit margins. "I take about E 1 from each passenger and I can take up to two passengers at a time," said one tuk tuk driver from a village near Mansoura. Drivers reportedly clear E 50 to 60 per day, the equivalent of a school headmaster.
Tuk tuks are believed to have first arrived in Egypt after a local businessman picked up on the idea during a trip to India. He arranged the import of several vehicles and leased them to youth in his hometown of Senbelawin in the Delta governorate of Deqahliya. The Asian innovation spread like wildfire to the surrounding towns and villages, replacing hantours (horse carriages) and taxi sedans.
"Unlike microbuses, I can drop my passengers off at their doorstep," says 15-year-old Hassan Hassan, a tuk tuk driver from Senbelawin. "My tuk tuk can be driven on narrow, unpaved streets, which are quite common here... and this makes them ideal for the elderly and people who don't want to walk."
The success of the highly maneuverable vehicles in Senbelawin prompted several small factories to import tuk tuk "kits" for assembly. As tuk tuks spread to other governorates, larger companies took interest.
CITI Scooter, a branch of automotive firm Ghabbour Group, imports Indian tuk tuks for assembly at its plant in Sixth of October City. "We are currently importing around 7,000 units per year from the best company in India, Bajaj," says Ghassan Kabbani, the company's general manager. "There are some people who import them from India, though from local manufacturers that sell unknown brands. This is not the best deal, as they don't come with any guarantee."
Ghabbour Group has commissioned a feasibility study on the possibility of manufacturing tuk tuks locally by 2006. This could shave up to 30 percent off the sticker price. "In Egypt, we're good at picking up ideas and imitating them, so local manufacture might soon become the trend," says Kabbani. "By decreasing the price of the product more people can buy it."
But the company faces several hurdles to sales, the most obvious of which is licensing. Technically, tuk tuks are categorized as scooters and thus illegal to operate as a form of public transport. Most operators, however, register their tuk tuks as private vehicles and operate them as taxis, paying off police to overlook the licensing violation. Others never bother to license their vehicle. "They think that if at the end of the day they're not allowed to load passengers, then it's better not to license [their tuk tuk] at all," says Kabbani.
Newly appointed deputy minister of transportation Atef Labib feels the licensing issue will soon be resolved. He pointed out that the cabinet recently issued two decrees, 141/2005 and 142/2005, which consolidate the ministry's control over the public transport sector, including tuk tuks. In addition, a regulatory body will be established to monitor the sector.
Labib says regulation is desperately needed to prevent a recurrence of the chaotic situation that occurred when microbus use boomed in the 1990s. "If we let chaos reign it will spread," he told Business Monthly. "We all saw the microbus and thought that its expanding use would solve the unemployment problem so we let it spread. But now the negatives have surpassed the positives and most accidents are caused by them."
The ministry is now preparing to issue licenses for tuk tuks, which will generate revenue for the government and offer youth legitimate jobs as drivers. Labib says licensing will also improve the safety of the vehicles. "With microbuses, we kept silent until things got out of hand," he says. "We're not going to make the same mistake twice."
Licensing would also open the possibility of seeing tuk tuks on the streets of the capital, where tighter police control has until now discouraged illegal operation. Kabbani, however, doesn't forsee a tuk tuk invasion. He argues that the three-wheeled vehicles work best in the countryside where they can exploit their unmatched maneuverability and off-road capabilities. "The advantage of tuk tuks is that they can navigate unpaved streets with ease, while at the same time they are safe for passengers, who can sit comfortably on the seat in the back," he explains. "They are no good for Cairo as buses, the metro and microbuses are everywhere, so it's not feasible for people to use them as public transport."
In any case, Labib is skeptical of the value of tuk tuks as public transport in the capital. "What we need to solve Cairo's traffic congestion problem is to concentrate on upscale passengers and create alternatives for them to use instead of their cars," he says. "Tuk tuks, like microbuses, don't attract wealthier riders."
But wealthier clients in the Red Sea resort of Al-Gouna have already taken a liking to a larger "minivan" model of the vehicle, which uses a cleaner-burning four-stroke engine and can also be equipped to operate on natural gas.
"There is an entrepreneur there who bought some tuk tuks and parks them in a certain place where the owners of the villas can call on him so they don't have to use their cars," says Kabbani. "They call for a tuk tuk to take them around Al-Gouna to run errands."
Should the government go ahead with plans to license tuk tuks, it might not be long before the three-wheeled vehicles begin appearing in numbers on Cairo streets. And when they do, the low-cost alternatives to taxi sedans are almost certain to catch on. "Tuk tuks are spreading all over the villages and will continue to spread because they're a good business deal," insists one
young driver.
Maha El-Dahan
© Business Monthly 2005
