The government says it is not ending the jeepney industry but simply improving it, requiring modern fleets under corporate or cooperative operators, for the benefit of consumers and the environment. But jeepney owners say what the government is doing now is indirectly ending their industry, and thus ending the livelihood of many individual owners and drivers.
The perspectives are seemingly irreconcilable. Jeepney operators and drivers have again gone on strike, against a plan that was started six years ago, while the government appears to be wavering yet again on the move to “modernize” the jeepney industry, which include the “consolidation” of franchises and routes under corporations or cooperatives operating at least 15 units in every route.
The state aims for economies of scale, but jeepney operators prefer a “scaled” economy with plenty of “small” operators. The government wants new vehicles on the road, but jeepney operators claim refurbished ones should be okay. The regulator is thus pushing for mergers, but owners obviously would rather operate as individuals.
Years back when taxi operators were told to upgrade their units, and the vehicle age was capped at 10 years, despite protests from operators, the government went ahead with the plan. To date, many taxis are relatively new models, while Grab cars are practically brand new. The taxi industry has also been somewhat “consolidated” under several big operators.
The fact remains that the jeepney, as it is, is an outdated mode of public transportation. It began post-war as a matter of necessity, and with only surplus vehicles available for the purpose in a war-torn economy emerging from World War II. More than 75 years since, the same style “jeepney” remains on our roads as the most common form of public transportation.
I support the government plan to “modernize” the industry, and I assume many commuters feel the same way. Perhaps even drivers feel the same. I reckon anyone who drives the whole day for a living would prefer to take the helm of a comfortable, convenient, and efficient vehicle rather than old clunkers that expose them to heat, noise, pollution, and possibly safety issues.
The present issue, I believe, is mainly with operators or owners who would rather not change the way they are currently making a living. These are “small” operators with individual franchises, earning mainly from fixed “boundaries” or rentals, possibly avoiding taxes, and passing on fuel costs to drivers who earn commissions rather than salaries. In short, every time a unit goes out, the operator will surely make money but the driver is left to his own abilities to earn.
That said, I believe the government should go ahead — finally — with its move to “update” the industry. It has been six years since 2017 when the plan was started, with the initial deadline set for 2018. Operators have been given several extensions already. The hard deadline for end-2023 should now be observed, despite what some senators and congressmen might think.
According to the government, to date about 56% or 96,000 jeepney franchises and 70% of UV Express franchises nationwide have already been consolidated. So, the issue of consolidation covers a minority of jeepney franchise holders. So, why should the government, majority of transport owners, and commuters all be held back by these “holdouts”?
These “holdouts” also insist that individual jeepney operators should still be granted a five-year franchise even if they refuse to join a cooperative, in effect granting them another five-year extension on the consolidation deadline of 2023. They claim that agreeing to consolidation now is the first step to their losing their individual franchises and their livelihood.
While this may be true, what they did not say is that consolidation also means their losing the “tradability” of their personal franchises as a commodity that can they individually sell or lease or “transfer” to other operators for a price. Moreover, with a five-year term for franchises from 2023, effectively, these jeepney operators push the phaseout to 2028, or after the current Administration. Of course, under a new president in 2028, they can ask for another extension.
The Land Transportation Franchising and Regulatory Board (LTFRB) countered that it could simplify the consolidation process, but that consolidation is non-negotiable. It also said a five-year term for franchises could be considered, and that it was willing to waive traffic-related penalties so that jeepney drivers and operators could renew their vehicle registration. Personally, I don’t agree with the LTFRB offer. But I guess these are small “losses” compared to finally getting the modernization plan on the way.
The industry’s counter to “modernization” is jeepney “rehabilitation,” claiming that poorer operators cannot replace their old vehicles with more expensive units. And this, to me, is the crux of the matter. The point is, poorer operators cannot really afford modernization. Consolidation is a means to make modernization more affordable, but a minority of jeepney operators refuse to budge on the issue.
Rehabilitation, in my opinion, is simply a means to further delaying “upgrading” the industry. It will just keep an outdated mode of public transportation on our roads even longer. Jeepney operators claim the high cost of modern jeepneys is a “barrier to entry” for poor operators and unjustly favors the rich, and that franchise consolidation is a means for “corporate capture” of the “small-capacity public transport” industry.
But is that not the point of modernization? Small-capacity public transport need not be a small operation, always. In the same way that banks and insurance companies have been told to merge and consolidate and raise their capital, with the aim of protecting the interest of the public they serve. The telecommunication industry also went through a consolidation phase, so did the taxi and bus industries, and even the airline and shipping industries.
Investors in any industry that offers a vital service to the public should be sufficiently prosperous to afford services that are comfortable, convenient, efficient, and safe. The public should not be settling for anything less. Why should the jeepney industry be allowed to continue operating like we are still in the post-war era? Even the old Philippine National Railways is set for modernization.
The five-year extension since 2018 is not enough, claims the jeepney industry. The pandemic in 2020-2022 further impoverished the industry, they insist. And with that, they should be given another extension — perhaps five years? — to gain enough resources to afford “modernization.” So, the government should again put off removing old and dilapidated jeepneys from our roads.
Should we keep the jeepney industry by the poor, and for the poor? Or, is it only the jeepneys and their drivers that are poor, as well as many of their users, but not necessarily their operators? Doesn’t the public deserve a modern jeepney industry? Don’t drivers deserve to get paid decent salaries by corporate or cooperative operators rather than just working on commissions? Shouldn’t operators be required to pay the proper taxes on their income, and be compelled to reinvest profit to further improve services?
Again, the government finds itself between a rock and a hard place. Again, jeepney operators are on strike. And, in all this, again, the public is the loser. One can only wonder how and when the matter will finally end. Five years from now? Lyrics from an old Sam Cooke song comes to mind: “It’s been a long, a long time coming, but I know a change is gonna come, oh yes it will…”
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council
