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Tuesday May 21st, 2024

Sri Lanka’s economic crisis compels Uber, PickMe drivers to cancel credit card hires

ECONOMYNEXT – Sri Lanka’s prevailing crisis situation is prompting drivers of ride-hailing services Uber and PickMe to ask for cash instead of card transfers, as drivers require cash in hand to obtain fuel from the island’s ever growing fuel lines. Charges levied by card processing service providers also mean that drivers end up getting paid less for card transactions.

Many drivers who spoke to EconomyNext said that getting reimbursed for card transfers was often a time consuming process, which was not practical as they would have to pay for fuel more frequently than before due to the shortages.

However, Uber drivers in particular have been resistant to card payments since before the economic crisis.

While credit transactions do not pose a massive obstacle for drivers who provide transport services only as a secondary means of income, it hits daily wage earners hard.

“If I run a whole day and get paid only by card, at the end of the day I go home with nothing to feed my family. I need to have at least some amount of cash on hand to buy a meal to eat,” said Murthi Prasan, who started doing Uber hires around Colombo a few months back.

Sri Lanka’s fuel shortage can be clearly seen by the long lines of vehicles in front of the island’s fuel filling stations, and the boards that hang on fuel pumps saying “No Fuel Available.” Vehicle owners are having to drive out of their way in search for fuel, which is a huge waste of money, time, and also petrol, they say.

While Lanka IOC, a unit of the Indian Oil Corporation (IOC), raised prices in line with global market rates, Sri Lanka’s state-run Ceypetco resisted raising prices for a time. Currently, prices are matched at a record 338 rupees a litre for Octane 92 and 289 rupees a litre for auto diesel.

The fuel crisis has also impacted the productivity of the country, as people are unable to find transport to go to work or their place of study.

Dhanushka Sampath, who has been driving for both Uber and PickMe, told EconomyNext that customers who don’t pay by cash are more likely to go without paying.

“We have no way of knowing if the customer has paid or not, because it takes some time for the money to enter our accounts. Sometimes, people will get in saying that they have paid with the card, but they haven’t and we end up taking a huge loss,” he said, though the apps don’t seem to confirm rides for which payment hasn’t gone through.

From the customer’s perspective, almost all the regular riders who spoke to EconomyNext said that they had been asked to pay by cash instead of card.

“It is actually very inconvenient. I rarely ever withdraw money so when they ask for cash, I usually don’t have it to pay, especially with the increased rates nowadays,” says 20-year-old Hansini Seneviratne from Mount Lavinia.

She adds that it is understandable why drivers prefer cash.

Tharindi Gunasekara, who uses PickMe regularly to go to work says, “If I don’t change [the payment method] to cash, they will cancel my trip. Honestly it is very inconvenient, but I stopped using my card because I feel bad about the situation right now. We always pay them extra as well.”

Like many things in Sri Lanka, transport has also become expensive, and more people are using apps like Uber and PickMe as they have lower rates than independent meter taxis. However, this also means that the service providers often work at a loss, or struggle to tide things over, with credit card processing fees, the rising cost of living, and lack of fuel to keep running. (Colombo/May05/2022)

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Sri Lanka declares May 21 as National Mourning day over Iranian President’s death

ECONOMYNEXT – Sri Lanka declared a national mourning day on Tuesday, May 21 in view of expressing its solidarity with Iran after sudden death of Iran President Ebrahim Raisi following a helicopter crash.

President Raisi and eight others including Iranian Foreign Minister Hossein Amir Abdollahian were killed in the crash when the helicopter had a “hard landing” reportedly due to adverse weather conditions with heavy fog. However, President’s two convoy helicopters reached the destination safely.

“The Sri Lankan government has declared a national mourning day on tomorrow (May 21) on behalf of the sudden death of Iranian president Mr. Ebrahim Raisi,” the Department of Government Information said in a statement.

It also urged all the state institutions have to hoist the national flag half mast.

Raisi was in Sri Lanka on April 24 to launch the Uma Oya dam on a one-day official visit amid tight security. His helicopter crashed when he was returning to Iran after launching a dam in the Azerbaijan border.

President Raisi is seen as a hardliner and a potential successor to Supreme Leader Ayatollah Ali Khamenei.

Earlier this month, Sri Lanka’s Foreign Minister Ali Sabry said the island nation will deal with Iran for investments and trade without being caught into the United States-led sanctions.

Sri Lanka was unable to receive $450 million from Iran for a recently opened Uma Oya multipurpose project started before the sanctions.

Sri Lanka now exports tea to Iran for no dollar payment. Instead, Sri Lanka tea producers are paid by the state-owned Ceylon Petroleum Corporation (CPC) in rupees for the pending crude oil import payments for Iran.

President Ranil Wickremesinghe expressed his condolences on the tragic incident.

“Sri Lanka is deeply shocked and saddened by the tragic death of President Ebrahim Raisi, Foreign Minister Amir Abdollahian and other senior Irani official,” he said in his official X-platform.

“I express my deepest sympathies and sincere condolences to the bereaved families, the government and the people of Iran.”

Raisi, a Muslim jurist, served as the eighth president of Iran from 2021 until his death. (Colombo/May 20/2024)

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Sri Lanka helps launch Global Blended Finance Alliance

ECONOMYNEXT – Sri Lanka has joined a group of nations led by Indonesia which aims to mobilise capital to achieve carbon neutrality, Minister of Water Supply and Estate Infrastructure Jeevan Thondaman said.

The Global Blended Finance Alliance mooted by Indonesia in 2018, was formally launched at the World Water Forum in Bali today.

Among the other founding members are Fiji, France, UAE, Kenya, Luxembourg and Canada.

“Through our collective efforts, the Global Blended Finance Alliance aims to mobilise both public and private capital to help nations achieve carbon neutrality and the SDGs,” Thondaman said on social media platform X (twitter).

“The world has a USD 2.5 trillion funding gap to achieve the Sustainable Development Goals (SDGs) by 2030,” he said.

Blended finance is the strategic use of development finance, such as public and/or philanthropic funds, for the mobilisation of additional commercial finance towards sustainable development in developing countries. (Colombo/May20/2024)

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Sri Lanka rupee closes slightly stronger at 299.60/75 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee appreciated slightly to close at 299.60/75 to the US dollar on Friday, from 299.70/80 the previous week, dealers said. Bond yields were up.

A bond maturing on 15.12.2026 closed up at 10.15/35 percent from 10.05/15 percent.

A bond maturing on 15.09.2027 closed up at 10.45/55 percent from 10.25/40 percent.

A bond maturing on 01.07.2028 closed at 10.80/90 percent.

A bond maturing on 15.01.2030 closed at 11.70/80 percent.

A bond maturing on 01.10.2032 closed up at 11.90/12.05 percent from 11.85/12.00 percent. (Colombo/May20/2024)

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