BWorld 124, On Grab, Uber, traffic and LTFRB

* This is my article in BusinessWorld on April 11, 2017.

The sharing economy is among the wonderful new inventions as humanity innovates with more modern technology. Technology companies (not transport firms or hotels) now allow private motorists to transport passengers and private homeowners can take guests and visitors for a fee via Airbnb.

There are two major advantages of tech companies in land transportation like Uber, Grab, and Lyft. First, transparency between the driver and passenger/s.

Since both drivers and passengers have accounts with these tech companies officially called transportation network vehicle services (TNVS), they can identify each other -- using car model and plate number details -- even before the trip begins. As a result, problems like hold-ups and sexual attacks are minimized under this scheme.

Second, passenger convenience. Passengers need not bring a car and brave the traffic, look for parking later, and privately owned cars are generally cleaner than taxi and drivers tend to be friendlier than the average taxi drivers.

There is an interesting study comparing Uber, Grab and conventional taxis done last year by UP Civil Engineering graduate students and professor. The authors got 18 respondents for a travel diary survey and take trips for 30 days. Then they also conducted an availability survey to measure the number of available vehicles of Uber, Grab, and Taxi at a specified time and location. The study has six tables, I summarized the results for Tables 2, 3 and 6 below.

The numbers show the following:

1. Conventional taxis have (a) lowest ratings by passengers, (b) highest percentage of complaints, more than 3x that of complaints with Grab and Uber, (c) 2nd to Grab in trip rejections, and (d) lowest cost for 10 trips, though the difference is not high compared with Uber.

2. Grab cars have (a) highest reliability and availability of vehicles, (b) highest cost per kilometer, (c) lowest % of complaints but small difference with Uber, (d) longest booking time, mainly due to (e) highest trip rejections, 2x that of conventional taxis and 21x that of Uber.

3. Uber has (a) fastest travel speed, (b) lowest passenger cost per kilometer, (c) highest passenger ratings though small difference with Grab, (d) lowest booking time but also (e) longest waiting time before being picked up, and (f) lowest trip rejection, almost zero.

There seems to have some inconsistency in the Uber data: it has the fastest travel speed in kph yet it has the longest travel time to cover a slightly longer distance than those covered by taxis and Grab. Nonetheless, it is a good study, congratulations to the three authors.

Now the problem is with the government regulator, the Land Transportation Franchising and Regulatory Board (LTFRB).

Since July 2016, it has stopped accepting applications for TNVS.

As a result, recent cars that have registered with Grab and Uber since that temporary ban may be subject to state harassment.

The LTFRB imposes multiple bureaucratic requirements that involve around 16 to 21 permits from various government agencies. These include tax clearance from the BIR, business permit from DTI and LGUs, among others.

The usual requirements by Uber and other ride-sharing companies for their partner drivers are only four: having their own vehicle, a driver’s license, a background check, and insurance coverage for passengers.

One result of these multiple bureaucracies is fewer supply of TNCs drivers and cars compared to the big and rising passenger demand. Until end-2016, there were only around 7,000 Uber drivers in Metro Manila vs. some 682,000 registered Uber riders.

There is one important move that the LTFRB can do: rescind and reduce many of those multiple requirements to allow more Uber and Grab vehicles on the road, and make these fewer requirements be available to conventional taxis too. This may be done via administrative order.

If this will require legislation, Congress should heed the clamor of the citizens and passengers for safer, more convenient rides.

Government should learn to step back from too much bureaucratism and recognize the ingenuity and innovation of the sharing economy. Providing safe transportation to people who do not own cars or those who leave their cars at home is not a crime that should be slapped with multiple permits, fees and bureaucracies.

-----------------

See also: 

BWorld 121, The PH tax reform bill and tax policies in East Asia, April 10, 2017 

BWorld 122, Six more myths in the mining debate, April 13, 2017 

BWorld 123, Drug-related murders and criminal justice in Asia, April 23, 2017

BWorld 118, Regulate this, prohibit that: bureaucracies in transportation

* This is my article in BusinessWorld last March 14, 2017.

Traffic congestion is an engineering problem with engineering solutions, not bureaucratic solutions involving increased prohibitions.

The recent plan of the Metro Manila Development Authority (MMDA) to extend the car ban on EDSA to certain hours five days a week is very idiotic and arbitrary. Its plan is (a) the existing one day a week, 7 a.m. to 7 p.m., based on the last digit of the car plate, AND (b) on certain hours of the other four days involving an odd-even ban every two hours.

If there are problems, the first impulse of bureaucrats with dictatorial tendencies is to create ban-this-prohibit-that regulations and restrictions. If previous prohibitions failed, then create another layer of prohibitions.

Based on this new ban proposal, it doesn’t matter if the person has three or more cars because the prohibition is by the hour, not by the day.

Although some people adjust to traffic congestion by buying or renting a condo or dormitory room near their offices, others cannot simply afford that option.

The latter includes parents and guardians who bring their kids to school first then go to their offices and then pick up the kids later and head back to their house.

One day a week car prohibition on EDSA and many streets and cities in Metro Manila is already bad because it forces many households to buy a second car or motorcycle, which further raises the number of vehicles in the metropolis.

If one is caught in a long traffic due to accidents or road construction, one can lose the two-hour window and therefore be subject to fines, penalties, and extortion. And to think that the MMDA already gets huge allotments from taxpayers via their annual appropriation while they get more money from the public via endless schemes of fines and penalties.

More engineering solutions, not more bureaucratic “solutions of more prohibitions” should be pursued by the government. Consider the investments by other governments in big Asian cities.

In the table above, Manila is not included in the study but data from other cities should give us ideas how to provide more engineering solutions. Rail network here includes MRT (Mass Rapid Transit)/Subway/Metro and LRT (Light Rail Transit). The MRT systems in Singapore and Taipei are equivalent to Subway or Metro in other cities. Commuter rail is excluded (see Table 1).

Commuters in Tokyo rely more on rail-based system, those in Beijing rely more on buses. Commuters in Shanghai, Seoul, Hong Kong, Singapore, and Taipei use a good mixture of both. Although the data was collected in 2013, they still reflect current trends.

In Metro Manila, the three MRT and LRT networks are obviously insufficient to serve its 12 million residents plus an estimated four million people from nearby provinces of Bulacan, Nueva Ecija, Pampanga, Rizal, Laguna, and Cavite who go to Metro Manila almost daily for work, meetings and schooling.

If Manila is included in urban transportation comparison with big Asian cities, Manila will likely excel if the main metrics is the number of traffic enforcers and officers on government payroll, not the length of rails and multi-level roads (interchange, tunnel, skyway) constructed and properly maintained.

There are various options for urban mass transportation that the MMDA, LTO, LGUs and other agencies should consider, spend money there instead of hiring more traffic officers who will harass and penalize more motorists with various prohibitions that they have enacted (see Table 2).

The Bus Rapid Transit (BRT) is the cheapest system and has been proposed in both Metro Manila and Metro Cebu but only the latter seems to have prepared for it. MRT/LRT are more expensive but they are faster and can transport more people per hour than BRT.

In the short run, as in doable within a month, the government can consider the following:

1. Allow the current Point to Point (P2P) buses and vans to go to more destinations. Not just SM North to Makati City and Ortigas or BGC. Rather, allow them to pick up passengers from Pasig City, Marikina City, Taguig City, Malabon City, Navotas City, etc. and crisscross to more destinations.

2. Allow the air-con vans to pick up passengers from many subdivisions and villages to various destinations. Commuters will avoid riding tricycles and jeepneys, the most inconvenient urban transportation system and among the major reasons why many people drive their cars just to avoid riding these small vehicles.

3. Allow fare deregulation in buses and vans so that more transport operators will field more modern and convenient vans and buses. They can charge higher fares but lower than driving a car, riding a taxi or uber/grab car. Less modern buses and vans will be forced to charge lower to attract more passengers.

Government should allow, not prohibit, more market initiatives in providing both short- and long-term solutions to the traffic congestion problem. Make people’s commute convenient and safe, “one ride” as much as possible. And many people will leave their cars or motorcycles at home and jeepneys and tricycles will slowly die a natural death.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET. Both institutes are members of EFN-Asia.

----------------

See also:

BWorld 115, Centralization and federalism, March 23, 2017 

BWorld 116, Urban transport myths and the jeepney strike, March 28, 2017 

BWorld 117, Energy bureaucracy, electric cooperatives and NEA, March 28, 2017

BWorld 116, Urban transport myths and the jeepney strike

* This is my article in BusinessWorld last March 01, 2017.

Traffic congestion in urban areas is an engineering problem with engineering solutions. It is a result of some market failures with market solutions and in many cases, government solutions only lead to failures in reducing the congestion.

Here are some myths in urban transportation that persist until today.

1 Big urban population means big urban congestion in traffic and housing.

WRONG.

If people refer to Metro Manila as a “prime example” of this statement, then they do not know or see other megacities in East Asia alone, like Tokyo, Shanghai, Beijing, and Osaka-Kobe. Huge urban populations are served by modern urban transport systems and expansive high-rise residential condos that cut travel times to and from work or schools.

There is net benefit for people living in congested urban areas than in far away rural areas. People try to squeeze themselves in a limited space where various amenities are available, where the distance from house to work or school is shorter.

2 Prohibitions like “number coding” of private vehicles and banning some buses to enter Metro Manila will reduce traffic congestion.

WRONG.

Prohibiting cars in Metro Manila one day a week led to more households to buy a second or third car (usually a used car) or motorcycles so they have another vehicle car to use on the “coding day” of their first car.

Many passengers of provincial buses are car- or motorcycle-owners in the province, so when government prohibits these provincial buses to enter Metro Manila and force the passengers to alight at far ends of the metropolis and take city buses that move slow because of frequent stops or take taxis that are more expensive, these people instead will drive their cars or motorcycles to the metropolis and this will further worsen traffic congestion.

3 Prohibition of multiple-destination air-con vans and allow only point-to-point (P2P) vans and buses will reduce congestion.

WRONG.

People put high priority for their convenience and safety when they travel. They avoid three to four rides one way to go to their offices, universities, other destinations (tricycle, then jeep/van, then MRT/LRT/P2P bus, then jeep/van/tricycle to final destination). These same rides are more inconvenient during bad weather. That is why many people drive their cars or motorcycles despite the heavy traffic and expensive parking.

Government should allow multiple destination air-con vans, say from Fairview to Marikina or Pasig or Navotas; or from Las Piñas to Taguig or Marikina or Manila, and so on. This will make commutes convenient and safe. Many people will leave their cars or motorcycles at home and jeepneys and tricycles will slowly die a natural death.

4 Government should regulate bus/jeepney/van fares always and disallow flexible fare setting by transport operators.

WRONG.

Airfares and shipping fares are deregulated and as a result, airlines and shipping lines can adjust their fares depending on the travel season (low/cheap during the rainy season and school days, high during Christmas, school breaks, and fiestas), and they set different fares per class of seats and passengers (ordinary, deluxe air-con, business class, etc) for the same plane or boat.

Fare deregulation will allow transport operators to field modern and convenient vans and buses that charge higher fares (but still lower than riding a taxi or any ride-sharing service) so that less modern buses and vans will be forced to charge lower.

5 Jeepneys and similar small-volume public transportation are common in some Asian countries.

WRONG.

Small-population Asian economies like Hong Kong and Singapore do not have jeepneys. Even economies that are less-developed than the Philippines like Vietnam and Cambodia do not have jeepneys. Motorcycles and buses are the common mode of transportation by the poor in these countries.

6 The jeepney strike will endear jeepneys to the public.

WRONG.

The jeepney strike in Metro Manila and other big cities in the Philippines last Feb. 27 has succeeded only in class cancellations and the public have found more ways to travel without jeepneys. Again, if multiple-destination (not just the inflexible destination P2P) air-con vans, and buses with deregulated and competitive fares are allowed, jeepneys and tricycles will die a natural death without the government creating a new law or Department/Administrative Order or LGU ordinance.

7 Jeepney drivers and operators will go hungry if jeepneys are phased out ultimately.

WRONG.

The same fear was expressed when telegrams were replaced by pagers, and when pagers were replaced by mobile phones and the Internet; or when horse-drawn calesas were replaced by jeepneys and tricycles; or when rice farms were converted to poultry farms or residential subdivisions; or when fishing villages were converted to beach resorts and hotels. People learn new skills, they move to other work or professions. Jeepney drivers can become van or bus drivers, or do other work.

Meanwhile, government should learn to step back and allow players to initiate market solutions to the traffic congestion problem.

Government should instead focus on securing road right of way (ROW) for important infrastructure projects like MRT/LRT, skyways and interchanges. Transporting people and goods to various destinations is not a crime that must require lots of government permits, taxes, and expensive franchises.

---------------

See also:

BWorld 113, Peace talks with CPP-NDF for another 30 years? March 04, 2017 

BWorld 114, Brownouts, ancillary services and transmission charge, March 23, 2017 

BWorld 115, Centralization and federalism, March 23, 2017

Transport Econ 20, On traffic and road sharing

My former teacher at UP Diliman, Prof. Segundo "Doy" Romero posted one hour+ ago about road sharing. Part of his post,

"...As a people we should resolve to now be moving people, but we are moving private vehicles instead. Emergency powers are being readied to deal with the traffic crisis. Meantime, it's everyman and everywoman for himself. The answer to the mobiity crisis? Buy another car! This is to dodge the number coding restrictions.

This is where political will is supposed to be needed. It is time for radical solutions, like Tony Oposa's idea of road sharing -- half of all lanes for motorists, half of them for pedestrians and cyclists. Or steep congestion pricing...."

I commented on it, I wrote,

"half of all lanes for motorists, half of them for pedestrians and cyclists." Lousy proposal sir. You mix cars and buses with bicycles and skateboards and pedestrians in one road? and if one wayward bus or car hits any of those bicycles, pedestrians, who's to blame, Oposa? the bus/car driver? the pedestrians?

Sir Doy clarified that it's half of all lanes (e.g. 4 out of 8 lanes). Then a certain Benjamin de la Pena replied, 

"Nonoy Oplas, that's a ridiculous comment. Who said anything about "mixing" - you build sidewalks, protected bike lanes, and transit only lanes."

I replied to both: "precisely sir. Edsa is 6 lanes, 3 for cars/buses/trucks, 3 for bicycles, skateboards, pedestrians. There will always be impatient drivers on the motorists lane, especially on an emergency trip or night time, etc. and will sway to the 3 lanes of bicycles, etc. Accidents will happen there. Who's to blame, Oposa and supporters? MMDA? drivers...?

Benjamin, you build sidewalks in the middle of EDSA? hehehe"

Then see the succeeding comments of Benjamin, calling me as "minimal thinking" which for me is an insult.

I am regularly engaged in a number of debates, past and present. I always make a distinction to criticize an idea or comment, not the person. Shoot the message, not the messenger. Like "that's a lousy idea" and not "Mr. X is lousy." Now see succeeding comments from this man. Explicitly saying that he was insulting me then claim later that he was not attacking me.

Sir Doy said that "Benjie is one of our foremost Filipino urban and mobility specialists in the country." His fb profile says that he also graduated from UP, studied Urban Planning at Harvard U, lives in Miami, Florida.

Fine, and if I criticize an idea -- mixing cars, buses, bicycles, pedestrians in Edsa -- he can personally insult or attack people who disagree with the idea? It speaks of his character.

Meanwhile, back to the issue. I notice that many people are actually forced to drive their cars because of the inconvenience and some dangers of multiple rides. Take someone living in UP Village or Batasan Hills in QC, working in Buendia, Makati or BGC, Taguig. Four rides: (1) tricycle from house to Philcoa or Sandiganbayan/Commonwealth, (2) jeepney from there to MRT station in Quezon Avenue, (3) MRT to Buendia or Ayala station, (4) jeep to office in Buendia or bus to BGC.

Four rides going to work, four rides going back home, 8 rides, daily. If one has to wear a formal corporate dress daily, or carrying a laptop, other important documents, or some big cash, it is very inconvenient to make those multiple transfers being exposed to street robbers, dust, heat, smog, or rain in between rides, the hassle of walking-waiting-standing between rides, etc.

Because of this inconvenience of public transpo, many middle class and rich people are forced to drive their cars or motorcycles, or take Uber/Grab/taxi, which means more private vehicles on the road, more traffic congestion. Even if the most modern MRT trains are available tomorrow, many people will still avoid those multiple rides and will use their cars or motorcycles.

One solution here would have been those air-con vans that act like school buses. Pick up passengers from the nearest points from their house, if not in front of their house, bring them to their offices in one convenient and comfortable ride. But LTFRB disallows this, they only allow point to point vans, which means people must walk or ride tricycles to the vans' terminal, then walk far or ride a jeep to their offices or final destinations, reverse the process going back home.

Those aircon vans were market solutions to the traffic problem. No taxpayers money, no new government bureaucracies will be committed to provide such solution, just allow the van owners/operators and commuters to decide the dynamics such service in terms of pricing/fare, service quality and safety.

This is not to say that I do not support the development of mass transport system, I support it. It's just that while it will take years if not decades to have a modern integrated transpo system, this house-to-office aircon vans transpo is the easiest, quickest, least distorting transpo solution to traffic congestion.

The road-sharing as proposed by Oposa, et al? No. Children, babies, oldies, physically disabled, pregnant women, those carrying important and heavy luggage, should be riding in comfort as much as possible, not pedaling or skating or walking in Edsa and other major roads. Thus, these roads should not be constricted via forced "road sharing"

Update:

Benjamin posted this on twitter, bragging that he insulted me.

Ahh, arrogant id___. Good that he lives in America, meaning one less arrogant soul in the Philippines. One disease of central planners is the tendency to be arrogant and "all-knowing" and their patience for contrary views is low.
----------------

See also:

Transport Econ 17, On banning provincial buses in Edsa, August 21, 2016 

Transport Econ 18, E-tricycles in Manila, October 11, 2016 

Transport Econ 19, On taxi fare contracting, December 17, 2016

Transport Econ 17, On banning provincial buses in Edsa

Remember Isaac Newton's 3rd law of motion: For every action, there is an equal, opposite reaction. Apply in society: For every government intervention and prohibition, there is an equal opposite distortion.

This news was reported last August 13, 2016. If government implements this, there will be MORE traffic congestion, not less, on Edsa and rest of M. Manila. Why?

Because many of those probinsyanos/syanas who ride the provincial buses are car owners. They leave their cars in Pampanga, Tarlac, Bulacan, Pangasinan, Cavite, Batangas, Laguna, etc. when they go to Manila because it is more convenient, more time-saving to ride the buses. Now remove the provincial buses in Edsa, transpo going to Manila will be more inconvenient, take multiple rides, more time consuming, more costly. Solution: drive their cars or motorcycles from the province.

About three years ago, MMDA's former Chairman Francis Tolentino banned buses from Cavite, other parts of Batangas to enter Lawton and Buendia, they unloaded passengers only in Uniwide warehouse at the coastal road. Huge headache for many passengers on the first few days, they have to take a M.Manila bus -- less convenient, less modern, aircon not so cold, etc -- or jeepney, non-aircon.

I noticed that the week after that, traffic worsened in Edsa, elsewhere. Precisely because many of those probinsyanos are car owners. With the inconvenience and higher cost of multiple rides, many of them drove their cars to Manila.

And after banning provincial buses in Edsa and traffic congestion remains bad if not worsened, what's next? Banning private cars 2x or 3x a week. And many middle class and rich families will buy more cars that they can use on days where their other car/s are banned.

Many probinsyanos carry heavy loads when they go to Manila. Whenever I visit the farm in Pangasinan, the lightest load I carry back home is 15 kilos. Rice, buko, bananas, jackfruit, etc. Taking a taxi from Cubao alone to Makati would cost me nearly P300, which is equivalent to my aircon bus fare from Pangasinan to Cubao.

So I take the city bus, Cubao to Makati, cheap, only P26, but travel time is long. Between 1 to 2 hours, depending on time of arrival in Cubao. So if government will make the provincial buses to stop only at Novaliches or even Valenzuela, then my taxi fare will be much higher and if I take the Manila bus, my city travel will become 2 - 3 1/2 hours.

Better drive my car and carry up to 50 kilos, 100 kilos or more of provincial goods. But then I will be adding to more traffic in Manila. And then many people will say we should ban more cars. sus ginoo.

A friend Reuel H wrote, "I can attest to that. One of our bosses lives in Apalit, Pampanga and takes the bus to work. He would leave his car at SM San Fernando and board the Genesis Liner coming from Bataan to conveniently drop him off at EDSA-Shaw Crossing. With this ban, he may be forced to bring his car all the way to Ortigas Center, thus contributing to the already-horrible gridlock in this business district."

Government should be banned from their frequent ban-prohibit mentality and policy. Very unimaginative and dictatorial.

-------------

See also:

Transport Econ 13: On Prohibiting S. Luzon Provincial Buses to Enter M.Manila, August 30, 2014 
Transport Econ 14: On the MRT and LRT Fare Hike, January 06, 2015 
Transport Econ 15, On having 2 cars or more, July 20, 2015 

Transport Econ 16, Stratbase ADR Institute forum on Manila Transport Infra Solutions, October 30, 2015

BWorld 24, Traffic and Newton's 3 laws of motion

* This is my article in BusinessWorld last November 11, 2015.

Expansion of existing urban centers and urbanization of rural areas is the norm and natural path of many cities and areas in the planet. Congestion is the natural result as people try to squeeze themselves in a limited space where various amenities and work and business opportunities are available; things that they cannot easily find in rural areas.

In East Asia, cities from China and Japan are the biggest in population size. In Southeast Asia in particular, Metro Manila is the biggest. (See table)

Traffic congestion is among the most prominent problems of many big cities, like those with population of 5 million or more people.

In Metro Manila and other big Philippine cities like Cebu, Iloilo and Davao, the growth in number of vehicles is much faster than the growth of new roads and highways being constructed.

This subject was discussed in a round table discussion organized by the Albert del Rosario Institute (ADRi) on “Greater Manila Transport Infrastructure Solutions: Thinking Beyond EDSA” last Oct. 28, at the Tower Club in Makati City.

After the opening message by ADRi President Victor Dindo Manhit, Mr. Eduardo Yap of the Management Association of the Philippines gave a good presentation that compared the Metro Rail Transit (MRT)/Light Rail Transit (LRT) system in Metro Manila to the train systems in Bangkok, Jakarta, and Taipei.

Ours are small and short compared to those three and many other East Asian cities. The population figure that he gave refers to “Mega Manila,” which includes nearby provinces like Bulacan, Pampanga, Rizal and Cavite. (See illustration)

British physicist and mathematician, Sir Isaac Newton (1642-1727) was known for his contributions in classical mechanics and physics. His famous theory is the so-called “Newton’s Laws of Motion.” Upon closer examination, it seems that the laws of motion in physics can also apply in society and economics.

Consider the First law: “A body at rest (or in motion) will remain at rest (or in motion) unless an external force is applied on it.”

Application: Bureaucracy in command and control state will remain in that state unless huge public pressure is applied on it.

There is a culture in the bureaucracy where the officials declare, “No one moves, no one builds anything, unless they get our signatures and permits first.” A state of inertia and inaction should be sustained unless players and stakeholders first get the signatures of officials and regulators.

And that explains how unsolicited proposals to build various MRT lines, skyways, and new tollways via build-operate-transfer (no cost to the government) two to three decades ago never got off the ground.

Second law: “The acceleration of a body is directly proportional to and in the same direction as the force acted on it, and inversely proportional to its mass.”

Application: The acceleration of regulatory prohibition is directly proportional to central planning philosophy and inversely proportional to its intellectual mass.

The Metropolitan Manila Development Authority (MMDA) policy is to keep blaming private players -- the car owners, bus and van operators and drivers, even passengers. Thus, policies like cars number-coding prohibitions and similar rules covering some provincial buses and vans restrict the capacity and mobility of high occupancy vehicles unless they secure a legal franchise which, by itself, is very costly and time-consuming to get. People have to endure three or four rides one way (tricycle then jeep/bus, then MRT/LRT, then jeep or tricycle to final destination), and so many are forced to drive their cars, which exacerbate the traffic congestion.

Third law: “For every action, there is an equal and opposite reaction.”

Application: For every government intervention, there is an equal opposite distortion.

When government prohibits people to drive their own cars on certain day of the week, many people buy a second or third car, especially if their village is far from the main road. And this exacerbates traffic congestion. When government prohibits certain provincial buses to enter key areas in Metro Manila, many of these car-owning probinsyanos take their cars or motorcycles to Metro Manila, and this again worsens traffic congestion.

One alternative that the MMDA and Department of Transporation and Communications/Land Transportation and Franchising Regulatory Board should consider is that instead of segregating between Metro Manila and provincial buses, they should allow those bus companies to choose their routes. Say from Cavite to Fairview or Pasig-Marikina, and these buses can pick up and unload passengers along EDSA or C5. Make the bus-train commute more convenient and cost-effective, and many people will leave their cars at home. In addition, many jeepneys and tricycles will die a natural death, without creating a new law or Administrative Order or local government unit ordinance. And we shall have less traffic.

Traffic congestion is an engineering problem with engineering solutions; it is a result of market failures but can be solved by market solutions. Like those unsolicited proposals to build more urban rails since 20 or 30 years ago. Like those air-con vans that bring office personnel from their houses/villages straight to Makati, Ortigas, Bonifacio Global City, Eastwood, Manila, airport, and so on, with just “one ride.”

Government should learn to step back and allow market players to initiate market solutions to the traffic congestion. Government should focus on securing road right-of-way for important infrastructure projects and enforcing property rights. Enforce the rule of law, like the law against bus hold-uppers, terrorists, murderers, and kidnappers. Transporting people and goods to various destinations is not a crime that requires lots of permits, taxes, and expensive franchises.

Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers, Inc., and a Fellow of the South East Asia Network for Development (SEANET).

------------

See also:

BWorld 5, Transportation Bureaucracy and Uber, June 16, 2015  

BWorld 8, Manila's Traffic and Transport Woes, June 27, 2015

BWorld 21, More internet use means lesser corruption?, October 31, 2015 
BWorld 22, WESM, PEMC and search for competitive electricity prices, November 05, 2015 
BWorld 23, ASEAN trade bureaucracies and Doing Business 2016 Report, November 07, 2015

Transport Econ 15, On having 2 cars or more, July 20, 2015 

Transport Econ 16, Stratbase ADR Institute forum on Manila Transport Infra Solutions, October 30, 2015

Transport Econ 16, Stratbase ADR Institute forum on Manila Transport Infra Solutions

Solving, or worsening, the traffic congestion in Metro Manila and neighboring cities and provinces is a subject that seems to have created hundreds of thousands, perhaps millions, of "experts" on the subject. Almost everyone has a great plan and solution/s how to address the problem, some of which are useful, some may be not.

Listening to real experts and people in the sector therefore, in a live, non-stop exchange of ideas, is a big treat. I myself have my own views and proposals how to address the problem but given the field of invited participants and speakers yesterday, I opted to just listen.

I am referring to the Stratbase Albert Del Rosario Institute (ADRi) Round Table Discussion (RTD) yesterday on “Greater Manila Transport Infrastructure Solutions: Thinking Beyond EDSA" at the Tower Club, Philamlife Tower, Makati City.

Opening remarks was given by ADRi President, Prof. Dindo Manhit, holding the microphone. In this photo from left: Eduardo Yap (Management Association of the PH, MAP), Atty. Tim Abejo (CitizenWatch.ph), Dindo, Dr. Epictetus Patalinghug (UP College of Business Administration), and Yuya Takagi (Japan International Cooperation Agency, JICA). 

Dindo mentioned about their paper that described not "Daang Matuwid" (straight road) but "Daang Masikip" (narrow road) because of the various "carmageddon" that happened this year alone. Hence, the forum's theme of "thinking beyond Edsa."

Mr. Yap, holding the microphone, gave a short but great presentation, of MAP's analysis and proposals that were also given to government Cabinet officials in charge of Metro Manila and the nation's infra. He talked for instance about building a subway from north to south of Metro Manila, as the technologies like huge tunnel borers are available; or if building above-ground rails and skyways, pre-fab structures are available.

Rene Santiago of the Foundation for Economic Freedom (FEF) gave a long discussion after Mr. Yap's presentation. The exchanges started with Manila's public transpo including buses, trains (LRT, MRT, PNR), the road infrastructures needed to respond to rising volume of vehicles. Then shifted to Manila ports decongestion, optimizing the ports of Batangas and Subic, moving the containers by rail, moving and decentralizing the Bureau of Customs' inspection procedures.

From left: Voltaire Wycoco of ICTSI, Atty. Michael Sagcal, Spokesperson of the Department of Transportation and Communications (DOTC), Ferdinand Inacay, President and Chief Executive Officer of MRail, Inc., and Mohamed Ghandar, Director, Asia Region and General Manager of ICTSI.

After the forum. From left:
Wilford Wong (Citizenwatch.ph); Rupert Paul Manhit (Stratbase);
Yuya Takagi (JICA); Voltaire Wycoco (ICTSI);
Patrick San Juan and Floro Advient (JICA);
Prof. Epictetus Patalinghug (Cesar Virata School of Business- UP);
Atty. Michael Sagcal (DOTC); Bienvenido Oplas (Minimal Govt. Thinkers);
Ferdinand Inacay (MRail, Inc.); Prof. Dindo Manhit (ADRi);
Mohamed Ghandar (ICTSI); Cynthia Hernandez (KPMG);
Chito Francisco (LRMC); Rene Santiago (FEF);
Atty. Tim Abejo (Citizenwatch.ph); Atty. Franco Sarmiento (HOR);
Eduardo Yap (MAP); Atty. Ed Relucio (HOR); Atty. Lysander Castillo (PBEST).

Not in the group photo but administered the RTD were ADRi Deputy Executive Director Angelica Mangahas (left) who introduced the guests and moderated the discussion, and ADRi Executive Director Atty. Kaye Clemente (right), who summarized the discussion and gave the closing remarks.

Ok, I did not talk yesterday, I simply listened. Now I will talk in this space :-)
To help address, help reduce, the daily traffic congestion in M.Manila -- have less government intervention.

Traffic congestion is an engineering problem with engineering solutions; it is a result of some market failures with market solutions. Like those unsolicited proposals to build more LRT/MRTs since 20 or 30 years ago under build-operate-transfer (BOT) and hence, no cost to the government except securing the road right of way (ROW) and enforcing property rights. Like those air-con vans that bring office personnel from their houses/villages straight to Makati, Ortigas, BGC, Eastwood, Manila, airport, and so on, with just "one ride."

When government says "NO, no one moves, no one builds anything, unless you get our signatures and permits first", then a one-week paralysis can become 5, 10, 20 years paralysis.

All photos above I got from Stratbase ADRi fb album. Thanks Krystyna, Mikee, Kaye.
-------------

See also: 
Transport Econ 12: Bus Rapid Transit (BRT) and Tricycles, April 21, 2014 
Transport Econ 13: On Prohibiting S. Luzon Provincial Buses to Enter M.Manila, August 30, 2014 
Transport Econ 14: On the MRT and LRT Fare Hike, January 06, 2015 
Transport Econ 15, On having 2 cars or more, July 20, 2015

BWorld 5, Transportation Bureaucracy and Uber, June 16, 2015  

BWorld 8, Manila's Traffic and Transport Woes, June 27, 2015
New Think Tank, Albert Del Rosario Institute for Strategic and International Studies, November 24, 2014

BWorld 8, Manila's Traffic and Transport Woes

* This is my article in BusinessWorld Weekender yesterday.
------

Metro Manila’s transport woes and the aircon-van alternative 

ELLEN is a senior accountant in one of the offices on Ayala Avenue, Makati City. She lives in Dapitan, Manila. Her father has a car that she can borrow occasionally and drive to Makati but she has little patience enduring the traffic congestion, then paying high parking fees in Makati. So she takes public transportation.

If she takes the regular transportation route to Ayala, that means three rides: jeep from Dapitan to LRT Tayuman Station, then LRT to Buendia Station, then aircon bus to Ayala. Total fare would be P35 but travel time will be between 1.5 and 2 hours one way due to the traffic and the inconvenience of walking and queuing to ride the train then the bus.

There is an alternative to multiple and inconvenient rides, the air-con vans. Only one ride from Dapitan to Makati, travel time is one hour or less, fare is P60 for the legal, franchised vans up to Ayala, and P45 for the non-franchised “colorum” vans that stop only at Makati Central Post Office, at the Buendia-Ayala intersection. To save money, she takes the “colorum” van, gets off at Makati Post Office, then walks two blocks to her office.

While the colorum van drivers can somehow deal with the “yellow boys,” officers of the Makati Public Safety Authority (MAPSA), they will have difficulty dealing with another bureaucracy, the “blue boys” of the Makati Parking Authority (MAPA) keeping watch on Ayala Avenue. These officers are often stricter and more inclined, shall we just say, to slapping penalties on both public and private vehicles.

SERIAL HARASSMENT

Being robbed in an air-con van by a fellow passenger is a possibility, of course, but that risk is minimal, compared with the risk of being robbed in a jeepney or on the streets, as one commutes from one ride to the next. It is also inconvenient, obviously, to be out in the streets when it is raining and the streets are flooded.

Queuing at Dapitan can be long, because of the many residents who commute to Makati where they work, and the number of aircon vans is not enough. Normally, Ellen would be in a queue for 30 to 45 minutes until a new, empty van arrives, but she prefers the relative convenience of taking only one ride in an air-con van.

Therefore, with or without a regular franchise from the LTFRB, those vans provide real public service to regular passengers like Ellen. She feels that her energy and work productivity are higher if she takes the van than if she goes through the three-ride system or drives a car.

Government officials have yet to acknowledge this view, going by the serial harassment of drivers of “colorum” vans -- who can avoid the harassment and penalties if they bribe the officers, but this “cost” is passed on to the passengers, naturally.

Ellen has noticed that a number of these colorum drivers are off-duty policemen or their siblings, even officers at the usual government offices, or barangay chairmen. She believes roughly one-third of these drivers belong to those categories. Asked how she knows this, she says these drivers show their IDs, and they have these unique hand signals that traffic officers recognize to spare these drivers from their usual harassment. This is what happens when you have an observant passenger on board, as opposed to a commuter who is lost in his headset or social media.

HARRIED EMPLOYEES

Makati’s Central Business District (CBD) is a premier area for the Philippine economy. Business groups surely recognize this distinction as sustained through the decades by their harried employees. Data from the city government’s website show that as of 2012, there are 472 banks, 3,279 insurance and other finance-related institutions, and 48 shopping malls in Makati. Data as of 2013 show that there are 41 PEZA-registered IT buildings, 47 embassies, 40 consulates, and 20 international organizations like the UN and its various offices located in the city.

These banks, hotels, shops, restaurants, malls, and other establishments employ roughly a few hundred thousands of people. Those employees, from the clerical to the managerial levels, need convenient transportation to be able to arrive at their offices promptly and render efficient work. Otherwise, employees beyond the frontline services may be spared the trouble of commuting to work, but many employers are still not open-minded enough to accommodate flexible time or work from home -- options that should ease Metro Manila traffic considerably.

This daily scenario is common everywhere in the National Capital Region, which, in the given year of 2013, contributed P4.29 trillion or 37.2% of P11.55 trillion in GDP. In the services sector in particular, 2013’s national output at current prices was P6.66 trillion, of which P3.49 trillion or 52.7% was contributed by the NCR.

The NCR’s registered population in 2013 was 12.5 million or only 12.8 percent of the total Philippine population of 98.2 million that year. But NCR’s weekday population can soar up to 15 million, as residents, including university students, from the neighboring big provinces of Rizal, Cavite, Laguna, Bulacan, and Pampanga would troop to the NCR to do various businesses.

The development of an integrated and efficient public transport system, as existing in developed economies in Asia and Europe, is the best long-term solution to Metro Manila’s traffic woes. That dream has been articulated for decades, until the gap in public transportation is now being filled by private initiative, to the chagrin of government.

The absence of an efficient and integrated public transport system in Metro Manila can be considered as due both to market failure and government failure. The appearance of air-con vans and other ride-sharing schemes like Uber is a market solution to such previous market failure. Government should not over-bureaucratize and over-tax these transport innovations. By stepping back from too much regulation and taxation, government effectively renders public service.

The services of air-con vans that provide workers and employees with convenient and direct public transportation, similar to school buses that transport students from their homes to school, are the next best thing for people who don’t or would rather not drive and brave the traffic. This is public service, providing an efficient, fast, economical, and safe car pooling system.

But when government agencies and their officers make the franchising system of air-con vans very costly and bureaucratic, many operators skip the franchise system and become “colorum” operators. To avoid the harsh penalties and regular harassment, they must bribe traffic enforcers, and this further compounds the culture of corruption in government. -- Bienvenido S. Oplas, Jr. 

----------

See also: 

BWorld 4, Public Transport, Colorum Vans and MAPSA, May 29, 2015 

BWorld 5, Transportation Bureaucracy and Uber, June 16, 2015 

BWorld 6, Biotechnology, Innovation and the Philippines, June 19, 2015 

BWorld 7, Free Trade vs.Protectionism via Non-Tariff Measures, June 26, 2015 

Fat-Free Econ 45: Newton's Laws of Motion and Traffic Congestion, August 11, 2014

Transport Econ 10: MMDA and Car Ban, July 18, 2013 

Transport Econ 11: On Fare-Contracting Taxi Drivers, December 13, 2013 

Transport Econ 13: On Prohibiting S. Luzon Provincial Buses to Enter M.Manila, August 30, 2014 

Transport Econ 14: On the MRT and LRT Fare Hike, January 06, 2015

Transport Econ 13: On Prohibiting S. Luzon Provincial Buses to Enter M.Manila

The Metropolitan Manila Development Authority (MMDA) will soon prohibit buses from southern provinces to enter Metro Manila. Their analysis says that these provincial buses contribute significantly to Metro Manila traffic; thus, the solution is to ban and prohibit them from entering the metropolis. Is this a good analysis?

In July 2013, MMDA proposed a two days a week cars-not-allowed in M.Manila, from the current one day a week. Public adverse reaction was high and MMDA was forced to abandon it.

Then in August 2013, MMDA prohibited provincial buses from Cavite and western Batangas to enter M.Manila and forced them to stop at Uniwide coastal mall, supposedly to reduce traffic in MM. I and other observers suggested that it will only worsen traffic. Many of those bus-riding probinsyanos ("promdis") are car owners, so they will be forced to bring their cars from Cavite because it is now a hassle to take multiple rides. And MM traffic has worsened. See Fat-Free Econ 45: Newton's Laws of Motion and Traffic Congestion, August 11, 2013.

Now MMDA and other government bureaucracies will prohibit buses from S. Luzon to enter MM. Expect more cars from those provinces to enter MM and traffic will worsen. The law of unintended consequences will haunt those bureaucrats, and the rest of us. And I think MMDA will revive again the previous proposal of two days a week private cars prohibited in Metro Manila from 7am to 7pm.

The MMDA, some local government units (LGUs) and Land Transport Franchising Regulatory Board (LTFRB) bureaucrats always put the blame on others, never on themselves and their policies. Many of those current bus riders from Batangas and Laguna are car owners, but they opted not to bring their cars because it is more convenient by air-con bus to go to Makati, Ortigas or Quezon City. Especially if they are carrying a luggage, or a laptop and other important materials. It is convenient to get off at Cubao then take a taxi to final destination. Now people will take provincial bus + Manila bus + taxi or jeep, then repeat the process going back home. The inconvenience of multiple transfers.

Plus many Metro buses are generally less comfortable compared to provincial buses; they also travel slower as they make many stops. And Metro bus hold-ups are a continuing scourge that the government cannot solve until now. So expect some if not many of these promdis to bring their cars to MM and traffic will become even worse.

Bureaucracies always have knee jerk reactions to problems that very often, they themselves created. Their previous regulations and prohibitions are not working, they attracted the law of unintended consequences, so they create new prohibitions. The minds of central planners. Centrally plan things; since things don't work with old plans, make new plans, new prohibitions.

Another problem, LTFRB gives franchise to bus units to ply a particular route for about five years I think. Say it gave a franchise in 2013 for buses to travel until Cubao, to last until 2018. Then this year, 2014,  LTFRB dishonors the permit it gave by supporting MMDA prohibitions. Government makes rules then change these in the middle. Officials who have little or zero experience running a public transportation yet regulating and prohibiting public transpo.

------------

See also:
Transport Econ 9: MMDA Bureaucratism, May 27, 2013
Transport Econ 10: MMDA and Car Ban, July 18, 2013 
Transport Econ 11: On Fare-Contracting Taxi Drivers, December 13, 2013
Transport Econ 12: Bus Rapid Transit (BRT) and Tricycles, April 21, 2014