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A brief history of transport strikes – Part 2: reasons for a strike
The current transport strike is not about fare hikes or the rising prices of fuel. Those are the most common reasons for jeepney drivers and operators going on strike. It’s quite simple for these reasons: Drivers protest when government refuses to increase fare rates amidst rising costs of operations and maintenance. And they don’t when fares are reduced as fuel prices are going down.
The Department of Transportation (DOTr) through its Land Transportation Franchising and Regulatory Board (LTFRB) is tasked with evaluating operations and maintenance costs of public utility vehicles and prescribe the minimum and incremental fares for these services. Fare hikes (and reductions) are the consequence of fuel price increases (or decreases) but are not set as dynamic or automatic. Fuel prices, as can be observed, can fluctuate and currently change every week. Fares are not automatically adjusted whether fuel prices are increasing or decreasing and are heavily regulated by government in part to supposedly protect the interests of the riding public. As such, fare matrices or the structured fares according to the various routes and the distances covered by public utility vehicles
The reason for the current transport strike is generalized as a jeepney phaseout. The term ‘phaseout’ actually refers to the PUV Modernization Program (PUVMP) of the government that seeks to replace all conventional jeepneys with ‘modern’ or ‘modernized’ units. The latter include mini-bus types as well as those that retain the conventional jeepney form but usually larger and with newer engines and interior layout. This is not necessarily a phaseout like the one I described in Part 1 along the LRT Line 1 corridor.
Again, much of the opposition cites the high cost (and therefore unaffordable) of a modern jeepney. The financing schemes currently available as well as the requirement for jeepney operators and drivers to be part of a transport cooperative to avail of these financing schemes are still considered unacceptable by many. And yet, government seems unwilling to extend resources in order for operators and drivers to be able to afford a new vehicle. The old jeepneys would still have some value but definitely not near a substantial down payment needed for low monthly payments. These monthly payments cannot be covered by the typical boundary (basically rent) for operators or the daily income for drivers.*
What is the cost of replacing conventional jeepneys with new, ‘modernized’ vehicles? Well, let’s assume that a new vehicle costs 2.4M pesos. Also, perhaps cover only the ones operating in the urban setting (i.e., exclude for now those serving provincial routes especially those used also for freight (e.g., top loads)), say 50% of the estimated 250,000 units need to be replaced. That goes up to 300 billion pesos. If we were to replace only Metro Manila jeepneys, that will be 132 billion pesos. These numbers can be compared to the cost of major projects like the Metro Manila Subway (488 billion), the Bataan-Cavite interlink bridge (175 billion) and the New Manila International Airport in Bulacan (735 billion). Would it be worth it (benefits-wise) to invest in new jeepneys?
*Of course, this also indicates a flawed business model for jeepney operations. But that’s another story.
Is the concept of induced demand a hard sell?
Here’s a quick share of an article on ‘induced demand’ particularly why it appears to be a hard sell:
Blumgart, J. (February 28, 2022) “Why the concept of induced demand is a hard sell,” Governing, https://www.governing.com/now/why-the-concept-of-induced-demand-is-a-hard-sell [Last accessed: 3/8/2022]
To quote from the article:
“Transportation experts say that the way to defeat induced demand, and actually ease traffic, would be to price roadways through tolls and congestion fees. But such alternatives are not popular. It’s hard to imagine running a political campaign on such a promise, as opposed to pledging an answer that looks free and easy… “Highway expansion is an attractive project regardless of your political orientation or what the state of the economy is,” says Thigpen. “There’s always a good argument for why we should be expanding highways. We need more jobs, or we need to unlock economic opportunity. There’s always a good political argument in favor of that.”
That last statement there relating highway or road expansion to politics is relevant everywhere. In our case in the Philippines, politicians are perceived to be very conservative and the type to use road projects as accomplishments. They are not as progressive as politicians abroad who may have the backgrounds and/or advocacies relating to sustainable transport to pursue the more difficult programs and projects needed improve the transport system. Instead, most are content with projects that they can put their name on and claim as hard accomplishments. Many of their constituents appear to agree. And agencies like the DPWH are only too happy to support this never-ending road construction and widening projects with the length of roads and the number of lanes added being their metrics for success. Of course, these (e.g., understanding and how to address induced demand, performance metrics, etc.) need to change if we really want to transform our transportation system towards something more efficient for everyone’s benefit.