The Economics of Jeepney Driving
Or Why Transport Drivers are Forced to Go on Strike

If the price of oil products has increased nearly 60 times since 1998, public transport drivers have all the more reason to ask for a fare increase – and the rollback of fuel prices. This Bulatlat.com report explains why.

By Alexander Martin Remollino
Bulatlat.com

A report aired by Ibon Foundation’s weekly program over Radio Veritas last March 6 said the Piston-led transport strike paralyzed some 90 percent of public transport throughout the country.  

From various other media reports, the strikers halted transport in the following areas: San Juan, Marikina and Pasig Cities, Baclaran in Pasay City, Valenzuela City, and Alabang in Muntinlupa City, all in Metro Manila; Pangasinan in Region I; Bataan, Zambales, Pampanga, Tarlac, Nueva Ecija, and Bulacan in Central Luzon; Batangas, Cavite, Laguna and Lucena City in Quezon in Southern Tagalog; Legazpi City, Naga City and other Camarines Sur towns in the Bicol region; Cebu City, Bacolod City and other Negros Occidental areas in the Visayas; and Cagayan de Oro and Davao Cities and Cotabato in Mindanao.

Bread and butter

“The issue of fare increases is a bread-and-butter issue for the transport sector, a vital sector which needs the support of the government,” said Garvida in an interview with Bulatlat.com.

According to Garvida, jeepney drivers on the average spend some P540 on diesel for each day. “That takes up a lot of their P1,200 gross income per day,” he says. “Take away P500 more as their boundary fees, and they are left with a net income of P160.”

As of October 2003, reveals a study by socio-economic think tank Ibon Foundation based on data from the National Wages and Productivity Commission, an average family in the Philippines needs some P555 to survive daily.

Garvida says the data is accurate, and notes: “That only covers those who are on the poverty line, not above it.”

If one goes by the information from Garvida regarding drivers’ expenses on diesel a day, it can be deduced that a jeepney driver consumes an average of 30 liters of diesel for each day that he works, based on the present diesel cost of P18 a liter.

Flashback

Transport groups were authorized by the Department of Transportation and Communication (DoTC) to charge P4 for the first five kilometers as minimum fare in 2000. At that time, diesel cost P13.50 a liter.

At P13.50 per liter of diesel, a driver spent an average of P405 on diesel per day. Based on computations by Bulatlat.com and the scientists’ group Agham, a driver needed to take in 101 passengers a day to recover fuel costs.

Then as now, according to Garvida, a driver had an average of 300 passengers per day. With this number of passengers, a driver earned a gross of P1,200 a day. Subtracting from this the fuel cost of P405, he was left with P795. Taking away the boundary fee which was also P500 then, the driver got to take home P295.

Based on figures from Ibon Foundation, the average Filipino family’s daily cost of living at that time was already more than P300.

Present figures

Based on current diesel prices and fare rates, the driver needs to take in 135 passengers at P4 each to recover the average fuel cost of P540 per day.

With the average number of passengers still placed at 300 a day, the driver still earns a gross of P1,200—the same as what he earned after he was allowed to charge a P4 minimum fare.

However, with diesel prices having climbed by P5.50 since 2000, the driver’s net take-home income has slid far. Taking away the P540 average fuel cost for each day and the P500 boundary fee, the driver gets to take home some P160, as pointed out by Garvida. This is only 28.83 percent of the average Filipino family’s daily cost of living (P555) if one goes by the figures from Ibon Foundation.

“Now how do you expect a driver to live on P160 a day?” Garvida asks.

But anyway,” he adds, “the government says a Filipino family can live on P33 a day, even if our figures of a daily cost of living that is more than P500 are based on its own data. What kind of government is that?”

Based on figures also from Ibon Foundation, since the downstream Philippine oil industry was deregulated in 1998, there have been many instances where oil prices were increased even when there was a downward trend in world oil costs. The think-tank’s latest research reveals that last year, oil companies overpriced their products by at least P0.91. Since oil deregulation, prices of oil products have been hiked by nearly 60 times.

Increase

Dividing the present average daily fuel expense of a driver (P540) by the minimum number of passengers he had to take in for each day four years ago (101), one gets the amount of P5.35—which is what the driver needs to charge each passenger today in order to recover fuel costs.

In effect, drivers need a P1.35 increase in minimum fare to be able to recover their expenses on fuel—P0.35 more than what Piston has been demanding.

Multiplying a possible P5 minimum fare by 300 which is the average number of passengers a driver is able to take in per day, one gets the amount of P1,500—which would be the driver’s gross income per day. Taking away P1,040 (of which P540 comprise fuel expenses and P500 make up the boundary fee), the driver gets to take home P460—which is still below the average Filipino family’s daily cost of living, going by Ibon Foundation’s October 2003 computations.

Petition and dialogue

Meanwhile, Garvida reacted to criticisms of the transport strike by some political quarters. In particular, presidential bet Sen. Panfilo Lacson had said in a media interview before the strike: “We don't want people to suffer. If they have gripes, they can take legal measures instead of passing on their troubles to other people.”

Says Garvida: “Legal measures—that is also the line mouthed by LTFRB (Land Transportation Franchise and Regulatory Board) chair (Ellen) Bautista. ‘Follow the process,’ she always tells us.”

Garvida reveals that as early as October 2002, Piston had already filed a petition for fare increase following a series of oil price hikes. The LTFRB, however, has yet to act on the petition, according to the Piston leader. “They leave our petition to gather dust for one year and four months—what ‘legal’ measures are they talking about?” Garvida asks.

Garvida also says that the transport strike is not only in the interests of drivers. “Drivers are part of the people,” he says. “That’s why we also support the workers’ call for a wage increase. That’s why we also support the campaign of various sectors for the scrapping of the Oil Deregulation Law, which in the first place is the root of these oil price hikes that drive us to increase fare.”

Following the March 1 strike, oil companies Petron and Caltex decided to give discounts to public transport drivers in selected areas. The Department of Transportation and Communication (DoTC) also held a series of dialogues with transport groups last March 4 and 5.

Transport groups are presently anticipating the second wave of dialogues with the DoTC, which is expected to start on March 16. Bulatlat.com

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