* This is my column in BusinessWorld last Monday, October 01, 2018.
People are rational, they seek convenience and safety for
themselves, their families and friends. Thus, if it is very inconvenient and
unsafe to take multiple rides from house to work and vice versa, say tricycle
from house and village, jeepney or bus, MRT/LRT, jeep again to office, repeat
the 4 rides going back home, then people would rather drive their cars or
motorcycles even if they have to endure heavy traffic, high parking fees, and
occasional street flooding during the rainy season.
But when it is easy, safe and inexpensive or
competitively-priced to get a ride-sharing vehicle, taxi or transport network
companies (TNCs), people would leave their cars or motorcycles and relax or do
work while inside the taxi or TNCs, which increases their productivity per day
and hence, their income while reducing vehicle volume on the roads.
It is important therefore, that government regulations
like those implemented by the Land Transportation Franchising and Regulatory
Board (LTFRB) should expand and not restrict the supply of competing
ride-sharing vehicles so that passengers will have more choices.
In a paper, “Innovation Versus Regulation: An Assessment
of the Metro Manila Experience in Emerging Ridesourcing Transport Services”
(2017) published in the Journal of the Eastern Asia Society for Transportation
Studies, Vol. 12, authors Ma. Sheilah G. Napalang (UP School of Urban and
Regional Planning) and Jose Regin F. Regidor (UP College of Engineering) cited
the result of a survey made by Uber Philippines in 2016 that covered 1,450
respondents.
They also cited a study by de la Pena and Dizon (2016) on
passenger preference between Grab taxi vs regular taxi. The two results are
shown in table 1.
There, the two surveys show that people’s trips are work-
and household-related and they value a lot convenience, reliability and safety.
In addition to the above-stated convenience, the presence
of multinational players like Grab and previously Uber also enable the
passengers to use their account whether they are in the Philippines or
Malaysia, Singapore, Indonesia, Thailand, other ASEAN countries. That is one
advantage of multinationals compared to country-specific services and companies
like regular taxi and buses.
The Metro Manila Development Authority (MMDA) also made a
study last year on the busiest and often most congested roads in the region,
and composition of traffic volume by type of vehicles. EDSA is the busiest and
67% of all vehicles there are private cars. These are people whose houses and
offices are far from EDSA and hence, must take multiple rides if they do not
drive their cars or motorcycles (see table 2).
So when the LTFRB further bureaucratizes and makes it
difficult for existing and new players in ride sharing to expand their
services, people will experience (a) longer waiting time to get a TNVS or taxi,
and (b) higher prices as these vehicles and drivers deal with high demand but
supply is limited. And so many of them will have to drive their cars more
often. Which further worsens the traffic congestion in EDSA and many other
roads in Metro Manila.
The LTFRB and other government agencies (MMDA, city
governments, LTO, etc.) must realize that their eagerness to “protect the
commuters” and “reduce traffic volume” very often result in more bureaucracies,
less players and hence, an outcome opposite to what they wish to achieve.
Competition leads to innovation – in pricing,
convenience, safety — and hence, better choices for customers and passengers.
But some players lobby for more regulations that tend to disadvantage new
players, like big taxi operators who dislike the competition by new TNCs.
From the perspective of consumers and passengers, more
players, more competition via innovation is better than regulations that limit
competition. Limited competition means limited innovation, and hence, limited
passenger choices.
Bienvenido S. Oplas, Jr. is the President of Minimal
Government Thinkers, a member of Economic Freedom Network (EFN) Asia.
---------------
See also:
BWorld 249, Reduce fares and increase passenger convenience by increasing supply, September 13, 2018
BWorld 252, Mining, Itogon and Lee Kuan Yew, September 25, 2018
BWorld 253, Cheap, stable electricity vs climate alarmism, September 30, 2018
BWorld 254, Duterte inflation in prices and political insecurity, October 01, 2018
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