Modernizing the jeepney?

DEMAND AND SUPPLY - Boo Chanco - The Philippine Star

Back in the early 80s, we were wondering why we can’t have an organized public transportation system like most civilized countries. I can’t forget the unexpected response of the economist in our group.

He remarked that the good thing about the jeepneys is that they are not subsidized by the government, unlike the public buses and subways we so admired. It is Pinoy entrepreneurship at the grassroots.

Our failure to properly industrialize and create jobs forced Pinoys to take care of themselves since the government can’t be expected to help much. Sariling kayod, so to speak. They work abroad as construction workers or domestic helpers. Those left behind drive jeepneys. Indeed, those who return use their savings to buy jeepneys they then drive with the proud declaration: Katas ng Saudi.

Our MRT may look like a sexier public transport option, an efficient way of moving people. But the public subsidy to the MRT is substantial. As of November 2022, the MRTC claimed the train system’s total expenses amounted to P8.96 billion with total revenue at just P1.1 billion, or a deficit of P7.8 billion — leading to an P88.34 government subsidy for every passenger. That’s just MRT-3. About 80 percent of the fares in LRT-1 and 2 are also subsidized. The EDSA Carousel buses, costing taxpayers P12 million a day, were made available for free until late last year.

Still, subsidizing public transportation is a better use of public money than the pork barrel and confidential funds of high public officials. The world’s major capitals provide substantial subsidies for public transportation. In some cities, they even provide free public transportation as an incentive for people to leave their cars at home.

Just for example, the MTA which runs the New York subways, buses and trains as well as operating seven bridges and two tunnels, is heavily subsidized. In 2022, the MTA’s operating budget is projected to be $19.379 billion. The largest share of MTA revenue –  $7.222 billion –  comes from dedicated taxes and subsidies MTA receives from the cities and states they serve. Only $6.870 billion comes from fares and tolls.

The big question as we welcome the new year is: will our government be able to phase out jeepneys supposedly to modernize them? Consolidation at NCR is now only 33 percent. Is it possible to replace thousands of jeepneys in a jiffy without sacrificing public mobility? The deadline was extended by just a month.

The Department of Transportation (DOTr) unveiled its Public Utility Vehicle Modernization (PUVM) program in June 2017, via a Department Order labelled as “Omnibus Guidelines on Route Identification and Franchise Issuance,” composed of 10 components ranging from regulatory reform and route planning to financing and fleet modernization. Transport expert Rene Santiago wrote in a 2018 BusinessWorld article that he isn’t confident of the program’s success.

“The program reminds me of the 12th-century story of King Canute who ordered the waves to recede. But in this case, the department order commands the jeepney to transform itself, or else vanish into the night,” Santiago, an engineer, observed. He sees omens of failure.

“If left alone, the PUVM is bound to fail. Off the bat, it is already sending out confused signals… The ‘modern’ jeepney unit aside, what has the government done to clear up the messy route plans and route rationalizations that we have been talking about for years?” Santiago asked.

Egged on by suppliers, DOTr was fixated on the replacement “modern” jeepney unit that will still be diesel powered rather than by electricity. The cost, at P2.6 million, is also beyond the means of ordinary drivers. Those who have consolidated as part of the PUVM claim they lost income due to the high amortization and maintenance of the modernized jeepney, according to a “24 Oras” report on GMA News.

The other difficult objective is industry consolidation via cooperative.

Said Santiago: “It is a slippery road. After more than 40 years, the transport cooperative program of the government has failed to gain traction. Why would it be any better this time around? The few jeepney coops are basically convenience shops where an omnibus franchise gets parceled out to ‘members’ for a fee.

“Industry groups like FEJODAP and PISTON are against drivers and operators merging into cooperatives as a means for PUVM. They should be, as their hegemony — anchored on the quota or boundary system — is threatened by any form of consolidation. The reality is that thousands of independent mom-and-pop operators will not voluntarily merge...”

A nationwide program managed from Metro Manila may also be more difficult to implement. Santiago thinks the program should be taken one local government unit (LGU) at a time.

“The pace of change has to be dictated by the LGUs. Not dictated from the top. Let those who find the old jeepneys still usable bask in the old world, while the more visionary mayors lead the way to modern public transport. LGUs must be allowed leeway on the rhythm of change, as well as the paths to modernization. If Davao City can chart its own course, with the consent of LTFRB, then so can the other LGUs.”

Forced consolidation may also no longer be necessary. Santiago points out that with digital technologies, there is no need to merge transport operators into one juridical person. One can have common ticketing, pooling of revenues, fleet and crew management without consolidation. Uber and Grab have proven that many independent vehicle owners and drivers can be made to work together via a digital platform.

Modernization or not, the demise of the jeepney is at hand.

“Disruptive technologies are around the corner. A properly executed PUVM can provide a soft landing, a decent burial for a historic icon… More than a change in appearance, the most revolutionary change would be in the jeepney mentality –  from individualistic operation to being part of an urban transit system… it is time to let go of the icon of backwardness, on what it symbolizes – a ‘heritage of smallness’,” Santiago concludes.

Some humility that explores other options, like the Aboitiz EV-powered mini bus, may improve this modernization project.


Boo Chanco’s email address is [email protected].

Follow him on X (formerly Twitter) @boochanco

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