E-rickshaw: Bane Or Boon?

Dhaka streets dominated by e-rickshaw, Missing bill lays bare the objective flaw.

Recently, a news report divulged that electric [rickshaws] in Dhaka city cost the govt Tk 40 billion as missing electricity bill. Over 1 million e-rickshaw[s] now ply over Dhaka city. Sympathy stemming from popularity of e-rickshaw led the authority to allow more than 3000 charging points across Dhaka. But in reality the number of charging points surpassed 50000 long ago. These points clandestinely charge e-rickshaw everyday, resulting in annual loss of electricity bill worth Tk 40 billion(See"Bangla Tesla Boom Drains Nearly Tk 4000 Crore Power Theft A Year In Dhaka",Jahidul Islam,The Business Standard, December 03,2025)

Energy efficient, pollution free,employment opportunities at the city maybe the reasons for allowing e-rickshaw on the streets of Dhaka. However, closer scrutiny laid bare hollowness of the [arguments]. The loss of Tk 40 billion nailed the argument of energy efficiency. Fossil fuel used to produce that electricity will not get back to govt coffer. Moreover, govt has to spend more to recuperate the loss. The growing number of e-rickshaw means more import of LNG and furnace oil to produce electricity to charge the e-rickshaw! More import of fossil fuel increases pollution. Higher earning prospect lured many rural laborers to Dhaka ,worsening urban density and public health at cramped accommodation places. It further increases the risk of fire incidents, organized criminal activity. At the same time, at individual level, it is subject of closer scrutiny that it really reduces transportation cost. Reality is that it is no longer cheaper. In some cases, it is worsening traffic system, deteriorating law and order situation. In a span of two years, we saw e-rickshaw pullers attacked traffic police booth and Metro station in Dhaka.

Nowadays, electric vehicles are becoming popular mode of transportation as growing sign of ditching fossil fuel fed vehicles. Bangladesh is no exception, overwhelming presence of e-rickshaw in the streets of Dhaka is the manifestation. Could we really get rid of fossil fuel or half its consumption? Economist William Stanley Jevons observed that efficient use of an energy source ,caused by technological advancement, led to more consumption of that energy source instead of lowering its consumption later. It is known as Jevons paradox. Energy efficiency is supposed to lower consumption of a particular energy source. But opposite is happening! Jevons watched that Watt's steam engine,a brand new thing back then and more efficient than other engines, consumed less coal but total coal consumption increased because of widespread use of this new energy-efficient engine. What is worrying the consumption of that energy source is more when the good/service is more responsive to price changes (price elastic demand). Use of electricity instead of petrol/diesel made transportation/ travel cheaper and thereby increase the demand for transportation/travel. More people travel than before. Subsequent study of Jevons paradox shows that increased energy efficiency leads to increase [in] income and economic growth,causing [overall ndemand to rise](See Jevons Paradox,Wikipedia) . Clearly, key motivation behind allowing e-rickshaw is backfiring! Undoubtedly, rickshaw puller's income augmented manifold from switching paddle rickshaw to electric version. It drew more people to this vocation and increased the number of this vehicle. Now look at the cost. Govt allotted Tk 90 billion for LNG subsidy and Tk 200 billion for power subsidy in this year's budget. Moreover, it abolished 15% VAT on LNG import, risking its revenue collection target. LNG is the main source of electricity generation in this country,followed by furnace oil and coal. Missing bill of Tk 40 billion is a mockery to that subsidy run by taxpayer's money. There is clearly a loss in revenue. In addition ,more public spending in the next year for meeting need for even greater number of e-rickshaw. Nowadays, price of electric scooter drops. An e-scooter costs around Tk 30000 or Tk 40000. This allows students,women [and other income group] to have an e-scooter ,increasing the total number of bike riders in the capital. Use of electricity instead of fuel brought down per kilometer cost of transportation. But it also increases the number of vehicles and commuters. Consequently, to run those vehicles, we need more electricity. And more electricity generation means more fossil fuel. Not only that electricity from solar power plant ,nuclear power plant also needs backup. So in the end we need more fossil fuel run power plants not just to produce increased demand for electricity but to back up the electricity from renewable energy. That means we have to continue with the quick rental power plants,which we are trying to ditch, for quite some time.

It is indeed interesting that eco friendly and energy efficient arguments set the context for allowing e-rickshaw on Dhaka streets. But it is resulting in electricity loss,inefficient resource allocation, abuse of subsidy, and more fossil fuel consumption. A totally different outcome what the policymakers envisaged at the initial stage. It is time to revisit the policy objective of allowing e-rickshaw in Dhaka and to chalk out some course corrective measures.