Perpetuating the boundary system
Credit to Author: ROBERT SIY| Date: Fri, 13 Dec 2019 17:46:43 +0000
THE term “boundary system” has come to mean the system of incentives based on the revenue or ridership offered to bus or jeepney drivers by owners of public utility vehicles (PUV). It started out as the daily rental payment the driver gives to the owner for the right to use the PUV and collect fares. Once the driver has gathered enough money to pay for the rental, he gets to keep the additional revenue collected.
Today, that system has mutated into other compensation methods, such as owners paying drivers a percentage of the total revenue collected. If we compensate bus and jeepney drivers based on how much fares they collect, it brings a host of problems related to “on-street competition” among drivers: racing to catch the next passenger, lingering at bus stops, stopping to pick up passengers even away from stops, and working long hours to achieve the daily target revenue.
The cost of maintaining this business model is not only reflected in increased traffic congestion and worsening mobility, but also measured in lives lost and injuries suffered because of crashes involving PUVs.
The policy of the government is clear. The Omnibus Franchising Guidelines, issued by the Department of Transportation (DoTr) in June 2017, says in Section 2.1 that: “As a basic policy, all PUV drivers shall undergo mandatory continuing drivers’ education through the Drivers Academy and be on fixed salary and benefits with no compensation linked to ridership.”
Unfortunately, some transport operators are interpreting this policy to mean that it is OK to provide incentives to reach a target for revenue or the number of passengers, so long as the driver is guaranteed minimum wage, plus benefits. If this interpretation is applied, the driver will continue to compete for passengers and endanger the public. Instilling proper driver behavior is difficult when incentives are designed to achieve the opposite result.
We need for DoTr and the Land Transportation Franchising and Regulatory Board to come out with a firm statement that a fixed salary and benefits are required, and any other incentive provided should be unrelated to revenue or ridership. Being unambiguous on this policy will save lives and improve the quality of public transport services.
Drivers can and should be rewarded for many other things, other than the number of passengers served. For example, bonuses can be provided for drivers who recorded improved fuel efficiency, the best road safety record (most kilometers driven without a crash) and highest levels of passenger satisfaction based on surveys of customers, among others.
Despite the DoTr’s policy directive, one anomaly is Guideline 1, Series of 2019 of the National Wages and Productivity Commission (NWPC). Under the NWPC guidelines, drivers are entitled to a fixed salary that is not lower than the applicable minimum wage for the region, plus benefits. However, they also say operators can devise a “performance-based” reward system that includes such factors as “revenue, ridership, safety, specific conditions of routes, and other relevant parameters.”
Some bus and jeepney operators use this guideline to offer drivers at least minimum wage, plus benefits and 10 percent of revenue as incentive once a certain revenue target is met.
With this approach, drivers still consider each additional rider as more pesos in their pocket. As a result, we can expect them to linger at bus stops, to battle to grab the next passenger, and to work excessively long hours to meet their target and earn that 10-percent commission.
The NWPC has to recognize that its guidelines, by encouraging irresponsible driver behavior, is one of the major causes of traffic and poor road safety. The guidelines place PUV passengers and the general public in harm’s way. The agency should not delay in amending its guidelines and disallowing any driver compensation linked to revenue or ridership.
This is not to say that bus and jeepney drivers should be paid only minimum wage, plus benefits. Absolutely not. PUV drivers offer a very important service and are responsible for hundreds of lives every day. They need to be compensated fairly. In the airline industry, pilots are usually the highest-paid employees in the company.
There are already many successful bus firms that have eliminated commissions and “boundary” from their driver compensation schemes. Some examples are BGC Bus operating in Bonifacio Global City, UBE Express which runs the Premium Airport Bus services, and the various P2P bus operators. These firms provide strong evidence that high quality bus services can be delivered with drivers entirely on fixed salary and benefits.
Modernizing our road-based public transportation system should be one of our top priorities. We need to replace not only old vehicles, but also antiquated business models that result in unsafe and poor transport services. Because lives are at stake, we need to strike down every effort to perpetuate the boundary system.
Robert Y. Siy is a development economist, city and regional planner, and public transport advocate. He can be reached at mobilitymatters.ph@yahoo.com or followed on Twitter @RobertRsiy