Bad business is a bad basis for a mass transit system


Ben D. Kritz

HE outcry against the at-tempt by the government to “modernize” the jeepney system is largely based on eco-nomic arguments: Without the jeepneys, several hundred thousand people will lose their livelihoods, and millions of people will lose their mobility. Both those arguments are a bit specious, but they are worth objectively dissecting.

The jeepney system developed in the years after World War 2 when a shortage of organized transportation but a large number of discarded US Army vehicles gave some resourceful individuals the idea to cobble together a sort of mini-bus, and begin regular transport services.

The newly independent Philippine government, lacking organizational or material resources to manage public transit on its own (as it is in more developed countries), in effect accepted the model the entrepreneurs had created, and used it as the basis for the country’s entire land-based public transport system: The Land Transportation Franchising and Regulatory Board (LTFRB) is essentially the operator of all land-based public transit, and contracts out the actual activities to private enterprise through franchises.

That sort of arrangement is not automatically a bad choice, but because of the great demand for public transportation, in order to attract an adequate number of operators, the regulatory conditions imposed­—the terms of the contract a transport franchise represents, in other words—had to be rather soft. The government through the LTFRB can delineate routes, set fares, and impose some rules regarding things like the type of vehicle to be used and frequency of service, but has little control over how operators run their businesses.

Those concerns are covered by labor, tax, and other business regulations, but again, because the demand situation initially favored service providers, a considerable number of exemptions were applied to transport operators.

The worst of those was permitting transportation system operators to work on a “boundary” system, essentially subletting their vehicles to independent workers as an alternative to hiring them as regular employees and paying defined wages. This is where jeepney drivers who are not driving their own vehicles encounter “livelihood” issues.

Figures vary widely from one part of the country to another, but collating all the available data suggests that currently, the typical jeepney generates a gross income of between P1,800 and P2,400 per day. The driver (or driver and helper) must pay for fuel—an average of P750 to P900 per day—and the boundary fee, which for most ranges from P750 to P1,000 per day. This leaves the typical driver with a take-home income of about P300 to P500 per day—or just about minimum wage, which for non-agricultural jobs currently ranges from P235 to P491 per day, depending on the region.

Most jeepney drivers I talked to (in semi-urban Cavite and highly urbanized Manila) agreed those figures were reasonable estimates, but pointed out they represented an ideal situation; if the jeepney broke down and required repair, or incurred a fine from traffic enforcers, or even got stuck in heavy traffic or long waiting times at terminal ends of routes, even if the driver was not ultimately responsible for the costs, the time lost would result in fewer passengers and less revenue for the day.

For jeepney owners who are self-employed, the circumstances are actually a bit better; those I spoke to reported incomes “on good days” of up to P1,000. On the other hand, they are responsible for additional costs to owners, such as franchise fees, insurance, and fees for joining “transport groups,” a necessity to limit competition and spread the available ridership more evenly among vehicles on the same franchise route.

The upshot of all this is that the actual operation of the overall jeepney system is inefficient—“chaotic” would probably be a better word for it. The boundary system incentivizes keeping the vehicle as full as possible; thus, at the terminal ends of the route, jeepneys tend to wait until they have a full load, and if partially unloaded mid-route, tend to make longer stops in hopes of attracting more passengers. This leads to inconsistent travel times, and as a result, every jeepney is likely making far fewer trips than it could in a shift.

Another consequence is, because jeepneys tend to fully load at the terminal, passengers are left waiting at points along the route, which gives the impression that there is a shortage of transport; more franchises for the same route are allowed to try to soak up the passenger demand, but the new capacity is handled in exactly the same way. The only result of that is a longer turnaround time for each vehicle at the terminal, and even fewer trips, which, of course, results in even less revenue in a day.

And because jeepneys are the biggest component of the country’s public transportation mix, they have served as the model for bus services, meaning that those are handled in the same inefficient way as well.

In areas outside highly urbanized places like Metro Manila where there are few transport options, taking away the jeepneys, even as inefficient as they are, would in fact put commuters in a bind. In the city, however, it is doubtful that they are even necessary in some areas. The Taft Avenue corridor through Manila, for example, is simultaneously served by the LRT, buses, and jeepneys; so is most of the Edsa corridor, and along most other major travel routes, there are at least two options (jeepney or bus) traveling the same or parallel roads.

By trying to preserve the jeepney system as it is, proponents are attempting to consign an entire class of workers to a livelihood that barely reaches subsistence level, and which by design cannot improve; does not move people efficiently; and in the most heavily traveled areas, is not even needed. To add insult to injury, the vast majority of the vehicles carrying out this ludicrous exercise are a threat to public health and safety, an issue I’ll take up in my next column.


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1 Comment

  1. The transportation in the Philippines is a mess,
    Safe bus seats have been removed and replaced with a three seat bench that has seats only big enough for a child into which they cram 3 adults, No seat belts anywhere as if safety is of no concern.

    Jeepney’s in disrepair rusting and spewing smoke is a everyday sight, Trikes in the same disrepair and blasting music are also everyday sights. It’s like there are no laws to govern the vehicles on the road.

    Buses without safety equipment like seat belts and over crowded should not be on the road but they are and the government is allowing it.