Saturday, September 08, 2018

BWorld 246, LTFRB command and control

* This is my column in BusinessWorld last August 31, 2018.

HERE’s a mixture of news for traffic-wary motorists and passengers in Metro Manila and other big cities in the country.

The good news: (1) more big infrastructure projects like skyway extension, M.Manila subway and Makati subway are either near completion or about to start construction, and (2) regular passengers of transport network vehicle service (TNVS) will soon experience shorter waiting time as the Land Transportation Franchising and Regulatory Board (LTFRB) has increased the number of accredited cars by 10,000 last August 24.

The bad news: (3) many roads leading to and after exiting the skyway will remain congested because of the big volume of vehicles, (4) the 10,000 new TNVS cars to be accredited by LTFRB are not enough to significantly bring down waiting time and fares, and (5) many accredited but inactive, suspended, or booted out TNVS drivers and their cars are still not delisted in the LTFRB “masterlist” and hence, cannot be replaced by new ones who can help expand the number of available ride-sharing vehicles.

The LTFRB is ground zero of these endless problems not only with TNVS but also other types of public transportation in the country. Here are the reasons.

One, franchise control. Putting a small and fixed cap on the number of accredited TNVS, UV express vehicles, buses, taxis, resulting in huge numbers of people unable to get fast and safe rides. Queuing and waiting too long, or standing in cramped, heavily-loaded buses and jeepneys, force many people to drive their cars, which further worsens traffic congestion.

In the table below, when there was still Grab-Uber competition, total number of cars and drivers was 43,000. After the merger, it went down to 35,000 because LTFRB did not and would not accredit 8,000 former Uber drivers and cars to be absorbed by Grab. The immediate result is longer waiting time for passengers and higher fares as additional disincentives for limited drivers to go into heavy traffic or frequently flooded areas.

Two, fare control. Fare-setting is not a function of rise or fall of oil prices, or degree of competition per route per hour, but a function of the willingness of the Board’s bureaucrats to meet and decide on fares that hardly change for months or years.

Three, route control. Disallowing buses, UV express, jeepneys, etc. to serve routes that experience high passenger volume (there is a barangay or city or provincial fiesta, etc.).

Four, very bureaucratic and costly procedures to get LTFRB accreditation. For instance, if one would apply as a new TNVS driver/partner, applicant must provide (a) proof of existence/various IDs, (b) proof of sufficiency of garage, (c) TCT or tax declaration or contract of lease/Authority to use with TCT of lessor, (d) LGU Zoning Certificate for garage, (e) proof of financial capability, latest income tax return, proof of bank deposit of P50,000, (f) DTI business registration, (g) BIR certificate of registration, (h) Proof of publication, (i) affidavit by the publisher, copies of publication, etc.

Five, rising regulations and requirements. Which means rising cost of operating public transportation. Mandatory receipts in taxi, GPS for buses and taxi, unbundling and detailed breakdown of fares by TNVS. Soon mandatory CCTV inside buses and TNVS, other wild requirements.

LTFRB has become a wild-cannon bureaucracy that creates more inconvenience to passengers instead of making their travels more convenient, more safe.

LTFRB should be checked by Congress or the Office of the President. Providing safe and convenient transportation to wary passengers is not a crime that should be penalized with endless command and control culture, stiff fines and penalties, even confiscation of private property like a car, van or bus.

Bienvenido S. Oplas, Jr. is president of Minimal Government Thinkers, a member institute of Economic Freedom Network (EFN) Asia.

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