* My column in BusinessWorld last June 14, 2019.
Passengers and commuters want convenient, safe, and
faster mobility to reach their destinations. There is great inconvenience for
people who take multiple rides (tricycle, jeep or bus, MRT/LRT, jeep again to
destination, reverse the process going back home). Taking a taxi is good but
there are many complaints like choosy drivers, robbery, or sex molestation
inside the cab, etc.
I made a small experiment, I Googled “robbery inside
_____ in Philippines” for regular taxi, jeepneys, city buses and Grab. I
counted the top 8 entries that refer only to my subject search, and stories
like “robbery of a bank” or “taxi/jeepney accident” are not included. I was
surprised by the result (see table 1).
And that explains why many people choose taking the
transport network vehicle service (TNVS) or transport network companies (TNCs).
Cost should not be a factor because passengers know that Grab cars are more
expensive than a regular taxi but they still choose the former. It’s like
parents know that Ateneo and La Salle are more expensive than other private
universities but they still enroll their kids at these two schools. People
value the brand, their service quality, etc.
My little experiment is consistent with the findings of 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, by Ma.
Sheilah G. Napalang (UP School of Urban and Regional Planning) and Jose Regin
F. Regidor (UP College of Engineering). The authors cited a study by de la Pena
and Dizon (2016) on passenger preference between Grab taxi vs regular taxi (see
table 2).
So if many people prefer TNVS or TNCs, how come that the
Land Transportation Franchising and Regulatory Board (LTFRB) is further
bureaucratizing and even deactivating many TNVS cars and drivers?
See these three reports in BusinessWorld this week, I
quote portions of the stories:
1. “Grab drivers seek amnesty for uncertified operators”
(June 11):
“the process to secure a CPC is difficult for drivers to
follow after the LTFRB added new requirements… produce a bank certificate of
conformity… Many operators cannot comply, some banks will ask for thousands of
pesos in fees, plus an increase of monthly amortization… proof of financial
capability… has been increased to P50,000 from P15,000 previously”
2. “Grab calls on LTFRB to allow deactivated drivers
temporarily” (June 12):
“‘The best scenario for the Filipino people, is to have
more drivers which results in passenger convenience, and less traffic as car
owners will just need to hail a ride… If LTRFB will allow the deactivated
drivers to resume work while it processes the application of 10,000 new
drivers, that would be the best win for the Filipino people,’ Grab Philippines
President Brian P. Cu was quoted”
3. “LTFRB won’t ease driver norms for ride-sharing
industry” (June 13):
“LTFRB said it will not ease its accreditation
requirements to deal with a potential shortage of ride-share drivers, despite
appeals to temporarily allow TNVS operators with pending documents to stay on
the road.”
Reports #1 and #3 show that LTFRB seems to violate its
own mandate — to help ensure passengers safety and convenience. Why has it
imposed new strict requirements that will effectively ease out many TNVS cars
that passengers precisely want?
Report #2 is true, it is basic economics. If LTFRB and
passengers want lower, cheaper price per ride, just allow the supply of service
to rise relative to demand. The “equilibrium point” of supply-demand dynamics
will lead to a decline in price while the supply of service will increase.
The market-oriented reforms for efficiency (MORE) that
LTFRB can take is to allow more TNVS cars and drivers, not reduce them. If it
is more convenient, waiting time to book a ride is shorter, price or fare is
lower due to competition, then more people will leave their cars at home and
that will help reduce traffic.
---------------
See also:
BWorld 336, Inflation target below 2% is possible, June 10, 2019
BWorld 337, Smart energy: Use more conventional sources, June 11, 2019
BWorld 338, MORE employment and labor productivity, June 12, 2019
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