In Nepal, there are three types of water service providers; two types of government-managed service providers covering urban and municipal areas, and community-managed service providers called Water Users and Sanitation Associations (WUSAs). This study aims to assess the current water supply service levels and water supply inequalities of WUSAs in terms of water consumption, supply hours, and customer satisfaction. Among the three types of water service providers, WUSAs offered the best performance in terms of their low non-revenue water (NRW) rates and production costs, high bill collection rates, and long supply hours. During the COVID-19 lockdown, water consumption increased, but bill payment notably decreased, possibly due to restricted movement and hesitation by customers to make payments. The multiple-year water consumption variations illustrated the uneven water consumption behavior of customers. Despite the variation in water supply hours, Lorenz curves, Gini coefficients (G), and water consumption analysis depicted low inequalities (G ≈ 0.20–0.28) and adequate water consumption among WUSAs even in 2019–2020. In the three WUSAs, more than 90%, 74%, and 38% of customers consumed water above the basic, medium, and high levels, respectively. Thus, maintaining high service levels of WUSAs is instrumental in achieving Goal 6 of the Sustainable Development Goals (SDGs) in Nepal.