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On the financial viability requirement for public transport operators

I came upon the news that the P2P Bus service between SM City North EDSA and SM Megamall suspended operations The Land Transportation Franchising and Regulatory Board (LTFRB) released a statement to clarify the circumstances surrounding the suspension, which apparently was the initiative of the operator rather than the agency. Apparently, too, some people were quick to attribute (blame seems to be the more appropriate adjective to describe how some netizens reacted) the suspension to LTFRB. Here is the statement posted on their social media page:

Land Transportation Franchising and Regulatory Board – LTFRB
February 23 at 7:52 PM ·

LTFRB PRESS STATEMENT ON P2P OPERATIONS OF FROEHLICH TOURS, INC.
23 February 2020

The Land Transportation Franchising and Regulatory Board (LTFRB) would like to clarify that it did not order the cessation of the P2P operations of Froehlich Tours, Inc. (FTI) which plied the SM North EDSA-SM Megamall and Trinoma-Park Square routes.

FTI was one of the first to be awarded with P2P routes in 2016. In November 2019, MAN Automotive Concessionaires Corporation (MAN) submitted a letter requesting the Board to look into the financial capability of FTI to maintain its operations, fund expenses that may arise from accidents, and continue to provide public service.

According to MAN, an exclusive truck and bus importer, assembler, and distributor, FTI initially acquired 17 bus units amounting to a total of P185.7 million from them. FTI was only able to pay P39.2 million which resulted in MAN having to repossess 12 bus units. To this day, P19.75 million is still left unpaid by FTI.

While these allegations are still under investigation by the Board, an inspection of the FTI bus units revealed that the company’s Provisional Authority, which allowed them to run and function as a public service provider, has already expired and no renewal was filed.

As of now, an order has been sent out to Froehlich Tours Inc. to submit its 2019 Financial Statement within a period of five (5) days from receipt of a copy. The hearing is reset, upon the agreement of both parties, on 3 March 2020 at the LTFRB Central Office.

Pending the outcome of the hearing, the Board shall adopt measure in the coming weeks to ensure that the riding public will be provided with the needed transport service on the routes affected.

There are two major points in the statement. One is on the financial viability of the operator and another is on the provisional authority granted by the LTFRB, which is a regulatory agency. The latter pertains to something more temporary and authoritative than a franchise, which is basically a license to provide transport services. These provisional authorities are often granted by the agency for so-called “missionary routes” as well as for supplementing the supply of vehicles during peak seasons like Christmas, Holy Week and Undas.

Financial viability is a requirement for all public transport operators. It is part of the formula for determining the viable number of units (i.e., vehicles) considering the fare that is to be charged to passengers taking into consideration the operating costs of operators. If this requirement was implemented strictly, a lot of operators would not be operating PUVs in the first place. The LTFRB, however, as well as its mother agency, the DOTr, have been lax about this requirement for so long a time that it is difficult to recall the last case where this was cited as a reason for suspending operations.

On the P2P bus service between Antipolo and Ortigas Center

I decided to take the P2P bus from Robinsons Antipolo to Robinsons Galleria earlier this week. For one, the opportunity presented itself as I had meetings in the Ortigas Center area that day. Second, I didn’t want to drive in heavy traffic along Ortigas Avenue and the area. And third, I didn’t want to worry about parking (my meetings were not necessarily in buildings located near each other). I could easily walk or take a taxi (or Grab car) between meetings without having to worry about a parked car.

Ticket/receipt issued upon payment of the 60-peso fare

The bus was empty but for a few passengers when I boarded. I initially took as seat near the door but then saw the sign by the window stating that the first two rows of seats are preferably for persons with disabilities, senior citizens and others who may require these seats for convenience.

The bus I rode on is of Korean make (Daewoo) and a recent model based on the design and condition of the interiors. The air-conditioning was also strong so most passengers just close the aircon ducts above them.

There’s a bus leaving every 30 minutes. There is a no standing policy so passengers will be directed to the next bus once all seats are taken, even if there’s a lot of time remaining before the full bus departs. 

Nearby the bus terminal is a jeepney terminal for the Antipolo-Cubao (via Sumulong Highway) route. Tricycles freely come and go at the terminal. Meanwhile, people may also leave their vehicles at the parking area (free of charge) for the final legs of their daily commutes. These allow for practically seamless transfers between different modes of road transport.

There are several buses at the terminal when I boarded in the morning. I wonder how many are committed to this particular route but the sign on the body of one bus stated that it was for the SM City Masinag – Greenbelt 5 route. I guess the Robinsons Place Antipolo terminal serves as a waypoint for these buses, which are deployed from the RRCG terminal in Taytay.

The trip started at 7:30AM and took about 75 minutes between Robinsons and Medical City, where I alighted from the bus. I figure it could have been about 1.5 hours until Robinsons Galleria if I continued to the end of the route. I actually thought I had to alight at Galleria but then noticed a couple of passengers who requested the driver to let them out at Medical City. Traffic was moving very slowly along that section of Ortigas Avenue and it wasn’t really an inconvenience to the rest of the passengers for a quick stop at Medical City.

And so I quickly changed plans and alighted at the hospital where I figured I could easily get a cab to my first meeting near Shaw Boulevard. I was right and and quickly got a Grab car to my first meeting. I just walked to the next meeting before taking another P2P bus to get home. The bus ride was comfortable and one can even have a short nap without much worry about security as the bus does not stop for most of the route (i.e., with the exception of the Medical City stop). You can easily squeeze in some work as I saw a couple of passengers typing away on their notebooks. Commutes have become difficult to many that the service provided by these P2P buses present a comfortable option to many who could afford it. The P2P buses actually provide services that are supposed to have been delivered by vans (i.e., FX, GTE, UV Express, etc.) but the latter has evolved to be more like an air-conditioned jitney rather than an express service in urban areas. Hopefully, these P2P buses can retain their quality and level of service and it attracts more car users. I suspect that their passengers might be those who are already using public transport and just shifted to one with a higher level of service.