Comparative Profitability Analysis of Electric, Pedicab, and Gasoline-Fuelled Tricycles

Lady Fritz C. Sarsalejo, Lemuel S. Preciados

Abstract


This study compared the profitability of the three transport service enterprises namely electric tricycle, gasoline-fuelled tricycle, and pedicab. These three enterprises are widely used as transportation facilities and serve as a means of livelihood for low-income drivers of the municipality of Isabel, Leyte. In assessing the profitability, the gross profit analysis and discounting cash flow analysis which includes Net Present Value (NPV), Internal Rate of Return(IRR),Benefit-CostRatio(BCR),and payback period were used. Based on the results of the gross profit analysis and the discounting flow analysis of a random sample of 177 drivers, positive returns of investment was experienced. Gasoline-fuelled vehicle has the largest net present values indicating highest financial profitability. Pedicab,with its lowest cost of investment and the lowest operating cost, generates highest benefit-cost ratios and lowest pay-back period. The electric-tricycle,with its highest purchase cost and highest maintenance cost, resulted in lowest positive returns compared with other two vehicles. However, these indicators of profitability only considered financial returns,and exclude the intangible benefits (i.e. the environmental benefits and other social benefits). This research highlighted the need to encourage adoption of vehicles that is economically profitable,but also environment-friendly vehicles. The results may also provide insights for local government initiatives to improve livelihood opportunities at the same time provide healthier environment for the communities.

Keywords


Investment; Benefit-cost analysis; Discounting cash flow

Full Text:

JEHRD001

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