Blockchain as a Service ( BaaS) , Next Gen Tech

How eTukTuk Is Enabling a Sharing Economy in Sri Lanka

CTO Sukhjeevan Uppal Explains How Blockchain and Tokens Could Increase Driver Pay
How eTukTuk Is Enabling a Sharing Economy in Sri Lanka
Sukhjeevan Uppal, chief technology officer, eTukTuk

Tuk-tuks or auto rickshaws are three-wheeler vehicles popular in developing countries such as Thailand, India, Sri Lanka and some African nations. In light of rising fuel prices, fuel shortages and growing apprehensions regarding CO2 emissions, the humble tuk-tuk is turning electric. Sri Lankan startup eTukTuk is also preparing to launch electric tuk-tuks with a network of charging stations and a revolutionary ecosystem for financial inclusion.

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There are nearly 1.2 million tuk-tuks in Sri Lanka, and for many, driving one is their only source of income. But a sluggish economy has led to a severe energy crisis. Energy prices have increased by as much as 50% in some countries, threatening the livelihood of nearly 500,000 tuk-tuk drivers in Sri Lanka.

Tuk-tuk vehicles were largely imported from India, but in 2022, the government of Sri Lanka banned imports due to the dollar crunch and depleting foreign exchange reserves. This led to a shortage of new vehicles and spare parts.

For decades, tuk-tuks have been powered by internal combustion engines, ICE, that run on fossil fuels like petrol and diesel. The number of ICE vehicles is on the rise; there are an estimated 270 million tuk-tuks and other two- and three-wheelers worldwide, and they all emit more CO2 than the average car.

As a result, a zero emissions vehicle, ZEV, policy has been announced by some Eurasian countries. These agreements firmly lay out targets for ASEAN 7 member countries - Thailand, Malaysia, Indonesia, Vietnam, the Philippines, Singapore and Cambodia.

According to a Times of India report, the United Nations Development Program is backing a project initiated by various energy and transportation ministries of the Government of Sri Lanka, which mandates a shift to EVs. The policy designates the replacement of all state-owned vehicles, passenger cars and two- and three-wheeler vehicles with EVs or hybrid models by 2024.

In preparation for this, eTukTuk spent the last five years developing an ecosystem that will have a direct impact on reducing air pollution, CO2-related health conditions and financial exclusion in developing nations.

Electric Vehicle Supply Equipment

Moving away from ICE and switching to EVs requires an expansive network of charging stations, called electric vehicle supply equipment or EVSE. This takes years to build and requires massive investments. The EVSEs need to be strategically deployed in urban and suburban areas.

To achieve this, eTukTuk has designated territory and infrastructure partners who will deploy, operate and maintain the EVSEs. They will earn rewards every time a driver of an eTukTuk or an equivalent EV charges their vehicle.

Zero Emission Vehicles

eTukTuks aim to make it affordable for drivers in developing nations to own and operate tuk-tuks. It has devised sustainable financial models and shared infrastructure that will bring down the ownership and operational costs, and increase the take-home pay for drivers.

eTukTuk vehicles use locally sourced components to reduce manufacturing costs.

eTukTuk opted for a modular design to reduce the cost of the vehicle. ZEVs were designed in a manner that the components could be sourced locally, thereby avoiding transportation and import costs in the supply chain. This reduces manufacturing costs and capital investment.

"Making it component-based also makes it future-proof. We can plug and play with different components that are easily replaced. It currently uses lithium batteries but there may be another energy source in the future," said Sukhjeevan Uppal, chief technology officer, eTukTuk.

Uppal said the vehicles undergo stringent testing for collisions. These have "a solid chassis and frame to manage the extra weight with the batteries."

Lower maintenance and lower fuel costs mean more take-home pay for drivers. Uppal expects to see drivers doubling their earnings in 12 - 18 months.

Token Economics and Sharing Economy

eTukTuk has carefully considered financial inclusion across the entire ecosystem. To enable this, it employs the Cardano blockchain and a unique token-based model with smart contracts. The model also incentivizes drivers with rewards every time they charge the batteries or transact with TUK tokens. Those operating EVSEs are also incentivized.

How ecosystem players will benefit from rewards with power staking.

The TUK utility token powers the ecosystem through carefully designed tokenomics that aims to provide rewards for long-term network participants.

A whitepaper from eTukTuk mentions "staking mechanisms" that will allow participants who stake into the network via the TUK token to share in the success of the ecosystem, where they can earn rewards in return for supporting the shared economy. This is called "Power Staking".

Participants can stake TUK into power nodes. eTukTuk partners will help power the network that allows drivers to make the switch from ICE tuk-tuks to the cleaner eTukTuk.

Blockchain Facilitating Payments

Blockchain is used in the eTukTuk ecosystem because of its advantages over traditional payment and technology systems. Specifically, it will be used to host the TUK token and the smart contracts associated with token distribution, decentralized identity and power staking (rewards/incentives). eTukTuk says the blockchain offers "better transparency, enhanced security, true traceability, improved speed and efficiency in operations, with less barriers to entry."

The blockchain system can support seamless communication between the eTukTuk vehicle, charging stations, the drivers, the mobile app and the control center that manages the entire network.

"We chose Cardano blockchain because it is scalable and energy efficient. It's no point having an electric tuk-tuk and then a massively energy-consuming backend system, because it defeats the objective. Any technology we use has to be energy efficient," Uppal said.

Using a traditional payment system with fiat currencies means payments have to go through a banking system, leading to transaction fees. That reduces the earnings for drivers and also for EVSE operators.

"With Blockchain, we're able to keep those transaction fees low, compared to traditional electronic fiat payments," Uppal said.

Drivers will have the option to pay using fiat currencies or with TUK tokens at charging stations.

The Road Ahead

After launching in Sri Lanka, eTukTuk will also consider launching operations in other nations such as Africa, Thailand and India, where tuk-tuks are popular.

"The first market is always the hardest. Once you've proven yourself in that first location - for us that will be Sri Lanka - it's a lot easier to move to different markets because you've proven yourself to a certain point," Uppal said.

Uppal anticipates competition or opposition from cab operators and slow government clearances. But he remains optimistic. "Where there is competition, there are opportunities for partnerships," he said.


About the Author

Brian Pereira

Brian Pereira

Sr. Director - Editorial, ISMG

Pereira has nearly three decades of journalism experience. He is the former editor of CHIP, InformationWeek and CISO MAG. He has also written for The Times of India and The Indian Express.




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