Thulo Kanchha Tamang, who has been driving a taxi in Kathmandu for more than a decade, never expected that he would one day be picking up passengers contacted through the app installed on his smartphone.

For Tamang, 40 years old and never finished high school, digital literacy was beyond his imagination. “I thought serving passengers by responding to an app on a smartphone would be difficult, something that I had never imagined,” Tamang said.

“My friend suggested that I go online,” he said, and seven months ago, he joined digital platform Pathao.

“The technology is amazing. I don’t have to wait for passengers on the roadside anymore. I receive a request from passengers on my app, and then I go to pick them up,” he said, adding that his income too had increased. Tamang provides both online and offline services.

Disruptive innovations in taxi, ride-sourcing and ride-sharing services are not only making taxi travel easy, they have radically changed the competitive landscape in Nepal where the syndicate system used to fleece travellers has been a deep-rooted disease.

Along with Pathao, many ride-sourcing and ride-sharing services like Taximandu, Easytaxi, Eddy Cab, Sarathi, Kawa Rides and Onver Smart Taxi have shaken up the traditional commuting system.

For Tamang, the transformation to digital services means he no longer has to bargain with customers because the fares are fixed and transparent.

Many people have had awful experiences when riding a taxi in Kathmandu as cab drivers not only charge more than the rate fixed by the government, they also have to put up with attitude and rude behaviour.

Ride-sharing apps have changed the market dynamics, and more and more taxi drivers have started joining digital services, which they were opposing until a few years ago.

Also, people prefer online services as they can request a taxi to come to their doorstep and they do not have to bargain over the fare.

Taxi rider Subarna Maharjan, who had an unpleasant experience before, is relieved nowadays.

He had bought a bed at Lokanthali and was wondering how he was going to get it home. He was not sure how much he would have to pay for a cab. His wife suggested he contact an online taxi service, and she herself made the request using her mobile phone.

The taxi soon arrived at the spot and picked him up. After that, Maharjan downloaded the online taxi service app on his phone too.

“The taxi fare was Rs450 which I thought would be Rs1,100,” said Maharjan, 34, a resident of Bakhundol, Lalitpur. “For the first time, I felt taking a taxi in the valley was reliable and affordable,” he told the Post.

With online services gaining traction, many online taxi service providers, including multinationals, are planning to enter Nepal which could ignite keen competition in terms of service and cost in the near future.

Ride-sharing company Metro Online Taxi launched recently. The company charges a minimum of Rs99 for a 1.2-km ride. After that, it charges the rate fixed by the government which is Rs39 per km.

Metro Online Taxi is doing test rides, and plans to operate in a full fledged manner after Dashain.

“We are all digital. We provide transparent and affordable services,” said Surya Tamang, chief of the marketing department at Metro Online Taxi.

“We see fierce competition in the market as we grow,” he said. “This will benefit customers.” The company said passengers are covered by accident insurance worth Rs500,000.

The ride-sharing business is booming in the valley because travellers have limited options with the chaotic public transportation.

Metro Online Taxi, formerly known as Easy Taxi, takes a 10 percent commission from each ride for the use of the app. According to Tamang, 1 percent of the commission is set aside for driver welfare.

Industry insiders say there are around 11,000 taxi cabs in the valley with around 8,000 actively providing service on a daily basis. Pokhara has nearly 5,500 taxis.

When Arjun KC established ride-sharing company Taximandu in 2019, he had a hard time convincing taxi drivers about digital services.

“Most of them were not technology friendly, and only few of them use smartphones,” the founder and managing director said. But it did not take long for perceptions to change.

Around 3,000 taxis are associated with Taximandu currently.

Taximandu provides rides at a base rate of Rs100 per 2 km, and after that it charges Rs39 per km. The Taximandu app has been downloaded more than 40,000 times.

“Taxi drivers have now understood the value of digital services. Not only public taxi cabs but private cars are also providing services,” said KC. “Taxi services today not only reach the customers' door using street maps, riders are also safe because all taxis are traceable through the GPS system.”

According to KC, demand for online taxi trips has increased by leaps and bounds in the last three years.

Due to growing demand, a US-based multinational company inDriver has started a trial run of its app. But there are no proper laws governing ride-sharing services, company officials said.

The Department of Transport Management was all set to bring out a new law in April 2019 to streamline and regulate ride-sharing services in Kathmandu, but it has not been issued.

Namaraj Ghimire, director general at the Department of Transport Management, said they had sent a draft regulation to the Ministry of Physical Infrastructure and Transport which will be tabled at the cabinet for its approval.

Ghimire said he was not aware of the status of the proposed regulation. The Sher Bahadur Deuba administration has been struggling to appoint new ministers for more than two months, and there is a backlog of hundreds of files waiting to be dealt with, insiders say.

“In the past, taxi service was a luxury. With digitalisation, it has become affordable and convenient,” said KC.