Picking up the thought from my last post: Part of Metro Manila's weakness (and effectively the National Government's failure -as it manages the National Capital Region) is that it has taken an almost pure free market approach to meeting the transportation needs of the city. We have over 15 bus operators serving the EDSA Route, thousands of FX operators, thousands more jeepney operators, thousands more of tricycles and pedicabs -all of which are privately owned. From a regulatory standpoint, it doesn't take much to be a transport operator - you just need your own vehicle (maybe two) and a few forms from the DOTC and a couple more from the LTO and you're set.
Having a free market approach has probably done wonders for the informal economy -and has moved many jeepney entrepreneurs into the middle class. (The boundary system though has created its own problems -but i'll tackle that in another post.) It also has its advantages:
- It saves the government money
- It efficiently allocates resources to routes
On saving money: Many cities are in serious debt from maintaining municipal transport companies. As with any other endeavor the government enters into - government owned transport services, if badly managed (which is likely given that it is protected from market forces) , quickly become money pits. Government ownership means pricing strategy will be and route choice will be driven by electoral expediencies leading to even more inefficiencies and higher costs.
Private led transport industries are driven by the logic of profit and competition, so overhead costs are kept to a minimum and personnel are hired or fired based on performance and are not shielded by civil service laws.
On allocating routes: Privately owned transport companies also choose the most profitable routes and can quickly adapt to changes in demand by reallocating resources. So the needs of the routes with the most demand (i.e. -lots of passengers) are met first.
The classic example would be the rise of the FX Taxi (which the government prefers to call "AUV Express") -which responded to the lack of bus lines and the long waits at the bus stations (which exacerbated the commute times). FX taxis stepped in effectively as commercialized car pools.
... to be continued in my next post: problems with free market public transport strategies.