THE INSIDE MAN

Rebooting the Jeepney system

Rebooting the Jeepney system image

Tito F. Hermoso / AutoIndustriya.com, Hyundai | September 11, 2017 15:39

How to make the Jeepney phase-out palatable

Strike!

Another Transport strike, another laboriously constructed program of reform deferred. When it comes to resisting change [and demanding fare increases], our Jeepney lobby isn't any more militant than most transport workers unions across the developed world. It's really all about entitlement, the desire to keep and fight for the privileges they believe they deserve for providing the national economy fast, reliable, accessible and cheap mass transportation. We're talking about a couple of hundred thousand vehicles and more than a million souls directly dependent on daily PUJ [Public Utility Jeepney] earnings.

The boundary

Unlike hard core socialist transport workers unions in Europe, our Jeepney lobby comes from the opposite side of the ideological divide. These are mostly entrepreneurial mom and pop Jeepney operators, families who afford to own and maintain a unit or two. They hire drivers in shifts to ply the government authorized route. Compensation for the owner/operators is the so-called boundary, a fixed daily rental fee that the drivers pay the operator while fuel expenses are shouldered by the driver. Everything else is the driver's income.

Full of folklore

Inherited from the Calesa horse drawn carriage for hire system that predated the US Army's dumping of WW2 Jeeps in the Islands post war, the Jeepney business has few barriers to entry. College degrees don't count, costs are minimized wherever possible. Garages are usually the public street at night. Terminals or Jeepney stops are wherever the prime customer, the commuter, wants to disembark or embark, the former, at a knock of the roof inside the Jeepney or the latter, a wave of a hand from the curb. Maintenance is usually by shade tree mechanics, paid with a modest barbecue and beer dinner. Traffic violations in the course of serving the public are dealt thru friendly community relations with the traffic authorities and "donations" or glad handing to keep the commuting public moving. The Jeepneys' bow to their Calesa origins by sporting chromed statues of horses on their hoods. The colorful pin striping and murals are a throwback from the sails of the Vintas, the plumage of the macho preening cockfighting cock, the riot of colors/fear of vacuum inherent in Indo-Malay art and the folkloric rock band culture.

The struggles of modernizing the Jeepney

Lightly taxed

The success of the Jeepney system is grounded on its simplicity. There are no qualification exams for the drivers other than possession of a Professional driver's license and a cursory knowledge of the authorized route. The operator's main expense is acquiring and maintaining the Jeepney and acquisition of a CPC [certificate of public conveyance] from the LTFRB [Land transportation franchise and regulatory Board], which is a franchise to operate a Jeepney on a specified route. The operator also must pay the 3.0% gross receipts tax or Common Carrier tax; exceed a certain amount over a million, then 12.0% VAT kicks in.

At the expense of railroad coverage

And so the Jeepney grew to be an indispensable pillar in national mass transit. With limited rail coverage, thanks to the destruction of WW2, the transport backbone of the country relied on the triumvirate of tricycles and Jeepneys for inter urban transport and buses, generally for big cities and cross country. Jeepneys have morphed from the Willy's military jeep into the giant 22-seater mongrels today built on extended chassis of Japanese light trucks powered by 70's era diesel engines overhauled for the nth time.

Taxes are always a bother

As the country grew and progressed, the Jeepney idyll as a public service on the fringes of the formal economy could no longer be sustained. Congestion, pollution and modern accident safety standards demanded that the Jeepney culture change its ways. A growing population and a more active bureaucracy demanded that Jeepneys pay taxes. As it stands, Jeepney operators are required to pay 3.0% of gross receipts as CCT or Common Carriers tax. This is presuming that Jeepneys issue receipts. Drivers are supposed to file an ITR [income tax return]. Their earnings, minus fuel and boundary is supposed to pay for their dual role as driver and conductor. Glance at a Jeepney drivers hands as he steers the truck like steering wheel inches from his chest, and you will see cash bills squeezed between his fingers, in order of denomination. They spend long hours on the road to make the boundary. To expect the driver/operator to fulfill such minimal regulatory paper work is expecting too much.

The struggles of modernizing the Jeepney

DoTr's Jeepney phase out program

The current DoTr Jeepney phase-out or reform that the government is foisting on them is one of the most comprehensive ever as it seeks a complete overhaul of how the PUJ sector works. It seeks to accomplish the following:

1. Redistribute and rationalize all PUJ routes to allow maximum commuter coverage and enable fair value for both commuter and operator for the officially sanctioned fare, minimize route conflict/confusion and reduce pollution.

2. Reclassify Jeepneys as per seating/standing capacity ratios

3. Adopt environmental friendly standard Euro 4 engines or electric hybrid propulsion

4. Improve passenger comfort by increasing minimum headroom

5. Enhance safety by increasing the ratio of forward facing seats, all with seat belts

6. Eliminate the rear entry by mandating side door curb side entry

7. Establish minimum safety standards for Jeepney classification.

8. Require compulsory passenger accident insurance

9. Encourage full regular employment by salary and benefits for all drivers/conductors

10. Require Jeepneys to have off street parking and garage

11. Require proper PUJ stops, on acquired or rented real estate outside of road right of way

12. Apply minimum capital requirements for Jeepney cooperatives and encourage single unit owners to join such cooperatives.

Item 12 is meant to provide the Jeepney owners and drivers a financially stable platform to afford bank loan credit worthiness, plus the administrative expenses that will arise from the upgrading of the Jeepney system to a full corporate/cooperative organization.

From the first BEEP

The local body building and truck assembling industry has responded to cater to the new Jeepney. Mitsubishi's BEEP, a mini bus based on the Grua [Austria] town mini bus, was introduced in 2009 and sports Euro 4 compliant diesel engines plus more forward facing seats and proper standing roof rails. Centro body builders have introduced PUJ bodies adapted for Isuzu NKR and Fuso Canter cab chassis, though the high chassis greatly reduces standing headroom. Centro even incorporated the multicolor Jeepney theme and 7 vertical bar grille of the original Willy's Jeep.

The struggles of modernizing the Jeepney

Public light bus

Honestly speaking, there is really no need to reinvent the wheel here. The ideal Jeepneys are akin to the Public Light Buses of Hong Kong which are the size of the Mitsubishi Rosa, Toyota Coaster or Hyundai County. If they be too wide for our multi-lane city streets, we can also adopt the more compact high roof versions of the Mercedes Benz Sprinter [like Vietnam], VW Crafter, Ford Transit, Hyundai H350 and Iveco Turbo-daily. Or even their Chinese copies.

Rejection sustained

But all this has been rejected by the Jeepney lobby as they see this as imposing an impossible financial and administrative burden eventually pricing them out of existence. All the reforms cost big money and despite government assurances that there will be Land Bank loans to finance their migration to the new reformed Jeepney system, the Jeepney drivers/operators cringe at being under further scrutiny and disapprove of having to fulfill many requirements that they used to take for granted.

Appeasement

Hence, the transport strike to demand the status quo. Which is not acceptable to the government and the rest of the national citizenry. So, what can be done to appease them and at the same time finally move forward with the long delayed upgrade? What would make the Jeepney operators happy is that the government shoulder the cost of replacement of their jeepneys and either cancel all the new regulatory and documentary requirements or have government itself administer their regulatory requirements. Another alternative is for Government to bid out the administration and management of the Jeepney system to the private sector via an O&M PPP. Either way, the Jeepney system now becomes a state owned public transport organization, similar to what the 1971 Metro Manila Transit Corp. did for the buses of Metro Manila.

The struggles of modernizing the Jeepney

The Jeepney as bus

The proposed Jeepney corporation will hence be run like a bus company- with proper terminals, stops, salaried employees and since they will now be run like a regular bus company, the driver will now have a conductor on tow so as to relieve the driver from distracted driving because of fare collection. It will have an administrative staff in order to pay salaries, expenses and all the proper taxes, withheld at source. The creation of a corporation or a cooperative was part of DoTr's Jeepney reform. Instead of one super Metro wide corporation capitalized at a whooping 500M, the revised DoTr reform offers several sizes of cooperatives and corporations depending on membership, paid-in capital and number of units assigned to public transport.

Driver/conductor motivation

Drivers and Conductors will now have a basic subsistence salary. But in order to motivate them to perform better and maximize ridership, they will be given an incentive pro rata for every day they exceed a certain ridership minimum or floor. It will work like a bonus paid like a boundary system but it will no longer mean the driver's subsistence is dependent on it. This eliminates trip cutting, reckless driving and traffic rule violations. Moreover, this additional income can be tracked and taxed.

There goes the operator

This will most likely be the most acceptable Jeepney reform ever. Save for one problem. The government sponsored Jeepney corporation eliminates the very Operator who clamored for freebie units. Simply, the Operator's position or function goes extinct, with the government or the PPP O&M contractor taking over his role as surrogate father, emergency loan provider and just plain benevolent boss. Still personal relations count for a lot in such sectors of the informal economy so we will have to see how this plays out.

The last dilemma

The Operator substitute dilemma makes it the major hurdle for the Jeepney lobby to accept what is essentially a well funded cash take over of their transport industry. Once such is done, the Jeepney public utility as an industry will now become just like its better organized and readily regulated bus public utility, which it should have been in the first place.