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philippine studiesAteneo de Manila University Loyola Heights, Quezon City 1108 Philippines

Provincial Public Transport

Michael W. Roschlau

Philippine Studiesvol. 33, no. 4(1985) 431458Copyright Ateneo de Manila University

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432 PHILIPPINE STUDIESp ub li c t ra ns po rt i nd u st ry o n C eb u i ~ l a n d . ~s the country 's mostpopulous provin'ce and containing the largest provincial urbancenter, Cebu is at the forefront of provincial diffusion. It canthere fore serve as an im po rta nt exam ple f or oth er provincial areas.

O R G A N I Z A T I O N A L S T R U C T U R EPublic transport in cebu3 consists of three intramunicipal and

tw o regional m odes th at conn ect different mun icipalit ies on majortrun k routes. T he main line-haul m ode, as in mo st Philippine p r evinces, is the jeep ney, providing c orr ido r service in urba n and sub-urba n areas. In mo st comm unities, the mo torized tricycle serves asa local distributor and as a feeder to the jeepney, offering neigh-borhood transport. Bicycle-powered pedicabs dominate localpublic trans por t in Dan ao Cit y and, in a designated part of centralCebu Ci ty, a s well as in the municipalities of Balamban and T ubu-ran, horse-drawn conveyances called tartanillas are still in use.Large buses are used on long-distance runs linking the provincialcapital with tow ns an d villages throu gho ut the province. This isth e only instance where full-sized buses are emp loyed fo r publictransport. They do not carry passengers locally within urbanizedareas.

Responsibility fo r th e registration of m o to r vehicles rests w ithth e Bureau of Land Transp ortation (BLT) and franchises for pub-lic transport service - certificates of public convenience - are is-sued by the Board of Transp ortation (BOT).4 Nonm otorized vehi-cles are exclusively u nd er local con trol and tend t o be outside B LTand BOT jurisdiction. Because it is rare for accurate an d consistentrecords t o be available, estimates of th e nu m ber of vehicles in ope-ration (Table I ) needed t o be supplem ented by street counts, inter-views with operators, local government officials and detachments

2. This approach is based on a framework employed by F.M. Scherer, IndustrialMarket Structure an d Economi c Performance, 2nd ed. (Chicago: Rand McNally, 1980).Most of the data presented in this article are based on extensive interviews and observa-tion of the systems in practice from June to October 1983.3. Camotes Islands and Bantayan Island, although administratively part of Cebu pro-vince, are excluded for the purpose of this study.4 . The BOT and BLT were merged into a re-created Land Transportation Commission

in March 1985 (Business Day, 21 March 1985). A previous Land Transportation Com-mission had been set up in 1964, replacing the Motor Vehicle Office, but was renamedBureau of Land Transportation in 1979.

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PROVINCIAL TRANSPORT

Table 1: Breakdo wn of Public Transp ort Vehicles,Province of Ceb u 1983V e h i c l e sMode Estimated number Seating capacityRegistered In Service Percent Average Total Percent

Jeepneys 2109 3770 39.2 16 60,320 61.1Tricycles 335 4630 48.1 4 20,000 20.3Tartanillas 454 555 5.8 4 2,220 2.2Pedicabs 39 1 400 4.1 2 800 0.8Large Buses 187 270 2.8 57 15,390 15.6Total 3476 9625 100.0 98,730 100.0o f th e natio nal p o l i ~ e . ~s part of the industry's st ructure, at ten-t ion is no w focused o n relat ions between individuals providing theservice, con dit ion s of en try an d profi tabi l ity.

I N T E R P E R S O N A L R E L A T I O N S

Participa nts in the indu stry w ho are directly involved in day-to-day operat ions can be grouped into three categories: owners, ope-rators a nd drivers. Ow ners are those w ho have actual ly investedcapital in a vehicle an d are i ts r ightful own er. Operators are thosein possession o f a legal franchise t o ope rate a public util i ty vehiclefo r hire o n a specif ic ro ute o r in a cer tain area, and drivers are theindividuals w h o ac tually drive the u nits o n a regular basis.

The size distr ibut ion of these three types of part icipants andrelat ions b etween them varies according t o the m od e in quest ion.The owner , operator and dr iver may be the same individual orcould be three differe nt people. Th e relat ionship is m os t com plexfor jeepn eys, wh ere owner-drivers are relatively rare, and op era tor-drivers rarer still (Table 2). In mo st cases, the own er of a un it willhi re on e or t w o drivers , w ho ren t the vehicle fo r a f ixed "bound-ary" fee pe r twen ty-four-h our p eriod. While own ers are usuallyresponsible for maintenance expenses such as oil changes, t iresand other repairs, dr ivers pay the dai ly cost of fuel f rom theirincom e. Under the "boundary" system, the excess of incom e

5. Another source was Metro Cebu Bus Terminals Feasibility Study (Cebu City:Metro Cebu Land Use and Transport Systems Project, 1983) .

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434 PHILIPPINE STUDIES(from fares collected) over the daily rental, cost of fuel and otherexpenses such as dispatcher's fees and tong (bribes), constitutesthe driver's net earning.An owner may apply for his own operating franchise from theBOT but that is usually a time-consuming process which can in-volve hiring attorneys and undergoing substantial hearings anddeliberations, both in Cebu and Manila. The usual practice forthose who wish t o avoid this inconvenience is t o attach their j e e pney t o some one else's franchise through the kabit system. This isnormally a professional operator who has obtained franchises formo re un its th an he actually owns. T he ka bit relationship involves aone-tim e e ntra nce fee, an annu al p ay m en t for licensing, registra-tion and insurance, as well as the m on thly k abit fee. The influenceof the five largest kab it opera tors in Cebu has becom e so pervasivetha t in 198 3 they controlled abo ut 2,5 00 jeepney units (almost 70per cent of the provincial tota l). In add ition , there is one jeepneycooperative composed of owners who are not satisfied with thekabit system and wan t to benefit from th e government's transportcooperative promotion program. It has grown very slowly, how-ever, from five jeepneys in 1974 to 14 8 in 1983 , am ounting toless than 5 percent of t he M etro Cebu total.The ma jor problem encountered by jeepney owners who attac htheir units to the franchise of a kabit operator is that, in the eyesof th e law, own ership of th e un it is in the franchise holder's name.Hence, the actual owner loses legal title to his vehicle, since allpapers are made out in the operator 's name, the only proof ofownership being the original bill of sale. The operators, how-ever, d o hold the own ers responsible in case of an accident or in-surance claim an d d o n ot have an y physical dealings with t he vehi-cle, as th e own er is fully responsible fo r m aintenanc e a nd hiring ofdrivers. Th e op er at or only collects fees fo r the use of his franchise.Op erators have no capital invested in the kabit un its and are onlyrequired to make necessary arrangements with the BOT and otherrelevant agencies.Organizational relationships for tricycles, pedicabs and tarta-nillas are similar, except that there are no enforced franchises andtherefo re n o operators. Owners usually em ploy a driver o r drivethemselves. Motorized tricycles must be registered with the BLTand tartanillas or pedicabs with local government agencies. Forthese vehicles there is a much higher incidence of owner-drivers

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PROVINCIAL TRANSPORT 435than for jeepneys, as outlined in Table 2. This is probably duelargely to the smaller amount of capital required for these vehicles.

In the case of tartanillas, some drivers ( c o c h e r o s ) own one ortwo horses but rent the cart, others rent both but feed the horsesthemselves, while still others pay the owner to feed the horses.Since five to six hours are effectively the limit of a horse's endur-ance in pulling a tartanilla, drivers who have access to only oneanimal are restricted in the hours they can work, otherwise havingto rent a second horse to work a full day. Unlike jeepney opera-tions, there are no very large fleets of either tricycles, pedicabs ortartanillas controlled by one individual (Table 2).Although, as depicted in Figure 1, long-distance services oper-ate throughout the island, they all terminate their runs in CebuCity and there are no such services operating exclusively betweenprovincial communities. While there are some kabit operators inTable 2 : Control of Public Transport Vehicles by Mode,Cebu Province 1983

Mode Approximate total Largest Percentnumber of vehicles Fleet size of to ta l

OWNERSJeepney (Metro Cebu) 3600Bus (Province of Cebu) 270Tricycle (Mandaue City) 1000Pedicab (Danao City ) 400Tartanilla (Cebu City ) 530OPERATORSJeepney (Province) 3725 1100 29.5Bus (Province) 270 90 33.3OWNER-DRIVERS AND OW NER-OPERATORSJeepney Bus Tricycle Pedicab TartanillaPercent of drivers who 0.03 0.00 16.25 10.0 18.03own the vehicle they drivePercent of owners whooperate the vehicle they own 33.2 75.9 100.0 100.0 100.0

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Figure 1 . Long-distance public t ran spo rt services, Cebu island, 1983

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P R O V I N C I A L TRANSPORT 437the bus industry, the great majori ty are owner-operators, hiringdrivers and conductors as employees. Be they owners, drivers orcond uctors , the abil ity of individuals to e nte r the indust ry i s a lsoan im po rtan t factor underpinning the s t ructur e of publ ic trans-por t .

C O N D I T I O N S O F E N T R YF o r individuals wishing to enter th e public t ransp ort industry as

owners, the primary requirem ent is capi tal for the purchase of avehicle. Th is might involve sufficient funds for a do wn pay m ent ,connected wi th the requi red credi t ra t ing for acceptance by afinancing com pan y. W hereas jeepney and bus franchises are diffi -cul t to obtain , there are no res t r ic t ions on enter ing any of thesmaller vehicles int o service, ex ce pt fo r a nom inal fee fo r tartanillaand pedicab registrations. In th e case of buses and jeepneys, i t iseasy to enter into a kabi t arrangement with a professional opera-tor, provided t he required cash can be raised t o pay th e entran cefee.

Fina ncin g fo r vehicle p urchases is available fo r buses an d jeep-neys when purchased new through th e ma nufacturers ' dealerships.Requirements usually involve a 25 p e r c e n t d ~ w n p a y m e n t , ~ndinterest rates vary according to the terms as portrayed in Table 3.Un ti l the vehicle is com pletely am ort ized, ' n o retu rn on originalinvestment can be earned, as the monthly income col lected fromoperat ion barely covers f inancing instalments and cost of runningmaintenance (Table 4). Financing is usually arranged through thedealership wh ere t h e vehicle is purchased, s o the cl ient has n o needt o di rect ly app roach the f inancing com pany himsel f. Kabi t opera-tors also have agreements with salesmen who can arrange registra-t ion, insura nce an d legal requiremen ts fo r an ow ne r as part of thepurcha se package. In s ome cases, t rem end ou s success has beenachieved by cooperative strategies and aggressive marketing. Anexample of this is automotive dealerships offering preferent ialcredi t terms t o clients. This can range as far as dropp ing th e down-paym en t t o?10 , 000 (13 perc ent), spli t over six month^,^ with thefirst instalments on financing delayed unt i l after the downpay-

6 . Approsimate ly f 16,0 00 for a new jeepney in 1983.7 . T w o or three years, depending on the term s of f inancing.8. f 5 , 0 0 0 payable on delivery, and the o ther P5 ,000 payable af ter six months.

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438 P H I L I P P IN E S T U D I E Sm en t is com plete. These are very at t ract ive terms, as they substan-tially re duc e the cash ou tlay required.

As is evident from Table 4, the capital required for investing insmaller public transport modes is much lower. This also explainswhy there is a mu ch higher preponderance of owner-drivers amongtricycles, pedicab s an d tartanillas. Alth ou gh large financing com -panies refuse t o handle t r icycles o r non mo torize d public t ransportvehicles, motorcycle manufacturers themselves offer financingon tricycles with similar terms. Pedicabs and tartanillas, however,must be purchased on a cash basis, since the builders are smalllocal businesses w ithou t the capa ci ty t o offer credi t .Th ere a re n o del iberate barriers t o entry in the public t ransportindustry fo r any of the five mode s o r three ty pes of participants.The only major restrict ions are the start ing capi tal required forowners and the natural e lement of compet i t ion imposed byma rket forces when supply begins t o exceed dem and an d satura-t ion is approach ed. Since very few jeepney route s an d none of theoth er mo des have any kind of drivers' representat ion o r rou te asso-cia tions , there i s n o knowledge ab ou t o r cont rol over the ent ry ofnew drivers, ow ners or operators. Incentives t o entr y exist only in-sofar as th ere is a potent ial profi t o r income t o be earned from in-vestmen t of capital o r effor t .

P R O F I T A B I L I T Y

The capi ta l requi red for owners wishing to en ter the bus or j e e pney industry is clearly the greatest barrier, meaning that anotherTable 3 : Financing Opt ions for JeepneyOwnership, Cebu 1983

Tern1 of Tota l Interest Monthly Tota lfinancing interest per annu m insta lments cost(percent) (percent) b) e)24 months 46 23 2981 87,54030 months 60 24 2613 94,40036 months 75 25 2382 101,750Based o n a pu rchase price o f P65,0 00, with a 25 perc ent (P16,OOO) dow npa y-m en t; i .e ., am oun t f inanced?49,000.

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P R O V I N C I A L TRANSPORT 439fairly substan tial source of incom e o r savings is a prerequisite th atca nn ot be avoided. In m ost cases, jeepney own ers have oth er busi-nesses o n which they depend for their livelihood, the tran spo rt in-vestment acting as a side line, occasionally allowing other familymembers to be employed as drivers. Discussions with loan officersand investment counsellors have revealed th at th e public transp ortindu stry can be a good investment, b u t it is qu ite risky, especiallyif only one unit is involved and the driver is not a family member.Trading businesses, such as import houses or wholesale distribu-tion enterprises, were freq uently iden tified as offering th e highestand fastest return on investmen t, far superior t o transport . Thiskind of business requires experience in marketing and sales, how-ever, and is only suited to individuals who are able t o dev ote alarge proportion of their t ime to the enterprise. In transport , p r efitability varies greatly accord ing t o the term s of financing, reliabi-lity and conscientiousness of drivers, and number of units inservice.

The economics of vehicle ownership summarized in Table 4 in-dicate that all three of the motorized modes provide a similar re-turn on investment per year. The difference is primarily in termsof initial capital involved and scale of op era tion s t o follow. Actualexpenses and revenues can vary greatly depending on the make,age or condition of vehicle purchased, terms of the financing,quality of m aintenance and ability o f the driver t o minimize wearand tear on the vehicle. The figures in Table 4 are intended to betypical for a new vehicle, and are presented only as an approxi-mate guide. With special financial incentives offered by somedealerships on purchases of several units, as outlined previously, aspl i t downpayment of 610,000 could lower the cash out lay forone new diesel jeepney to f 1 260 .9 Th us six m onths of incomecan be earned before the second half of the downpayment is due,with monthly instalments on the remainder of the purchase pricecom men cing in the seventh mon th. If a twen ty-fou r-m onth finan-cing term is chosen, then a total net profit of f)85,2 56 could beearned on tw o jeepneys over five years on an equivalent cash ou t-lay (P22,50 0) t o that shown in Table 4. This equates to a 379 per-cent return o n investment, or about 75 percent per year. Very fewother businesses can compete with this kind of profit, makingjeepneys a potentially very attractive investment.

9. P5,000 downpayment plus other capital and initial annual costs.

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Table 4: Economics of Vehic le Own ership, Est imates fo r Cebu Province 1983Mode Bus Jeepn ey Tricycle Pedicab Tartanilla

Retail priceCAPITAL COSTSDownpaymentKabir entranceChattel mortgageTOTAL CAPITALANNUAL COSTSInsuranceRegistrationTOTAL ANNUALTOTAL CASH OUTLAYMONTHLY COSTSFinancial lnstalmen t (month s)Kabit feeMaintenanceFood for horsesDiesel fuelSalaries

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TOTAL MONTHLY(a)TOTAL MONTHLY(b)Vehicle life (years)Total expenditure overvehicle lifeINCOME per mon thTotal income overvehicle lifeCross profit overvehicle lifeNet profit overvehicle lifeNet profitlmonthReturn on investmentover vehicle life (%)Return on investmentper year(%)(a) including insta lments on financing(b) afte r vehicle is fully paid* F3000 fo r rig an d P2OOO for each of tw o horses

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442 P H ~ L I P P I N E T U D I E SPerhaps s om ew hat surprisingly, u nd er normal cond it ions pedi-cabs offer a remarkably high return on investment . At 44 percent

per year, i t is almost double t ha t of the n iotorized modes, althoughthe a mo un ts involved are m uch lower than for buses or jeepneys.In com parison t o t ricycles, however, pedicabs seem t o be a m uc hhealthier financial prop osition, helping to explain the ir successin Danao City, where physical conditions are favorable for pedal-pow ered vehicles. ' '

Th e econom ics of tartanil la ownersh ip are decidedly inferior t oany of the othe r modes, owing primarily to recent shortages ofhorses and resultant high prices. In addition, the costs in Table 4were surveyed short ly after a prolonged drought had adverselyaffected agricul tural prod uct ion by virtual ly negating on e e n t i regrowing season o n th e island of Ceb u. T he resul t is that the pricequ ote d fo r feeding the horses may be somew hat higher than usual.These factors, co upled with extremely low fares charged fo r tarta-nilla travel,' ' help t o explain why horse-drawn vehicles are n o t avery at t ract ive investment . If the ow ner is able to collect the horsema nure and sell i t in dried f orm a s ferti lizer, an addi t ional 940 permonth can be earned, substant ial ly improving the otherwise mar-ginal prof it .

The industry 's st ructure alone is not sufficient to sat isfactori lyevaluate the abili ty of existing public transport in meeting themobili ty needs of provincial residents. Attention therefore turnsto c ond uct as a second major characteri s tic .CONDUC T

Because the public t rans por t industry of Ceb u is operated byprivate sec tor enterprise, the profit mo tive is i ts und erlying deter-mining force . Th e search for a re turn on investment forms the basisof the industry 's st ruc ture and , to a large degree, determines ma nyaspects of i ts conduct . Most part icipants in the industry have be-co m e involved because some mone tary benefi ts are expected t o bederived, as no artificial subsidies are available from outside. Both

10. In 1963 , when D anao was given cit y status. the tight grid pattern of streets inthe c i ty center was concre ted, and niost of the small mo tor-tr icycles converted to pedalpower. Thereaf ter , pe d~ ca bs roceeded to become popular in Danao City because oftheir low cost, t he sh ort distances involved, f lat terrain and sm oot h surface o f th econcrete streets.11 . f0 .40 , ve r susF0 .75 for a ride of equal distance o n a jeepney or tricyclc in 1983 .

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P R O V I N C I A L TRANSPORT 443the way in which technology is employed and the de terminat ionof fare s tructures are important characteris t ics of the industry 'scond uct . T hey ref lect the interface between private enterprise con-siderat ions and the needs of the provincial populat ion.

U S E O F T E C H N O L O G YT he degree to which cap ital is being invested in th e public trans-por t indust ry var ies cons iderably f rom on e m ode t o another .Th ere has recently been a heavy investment in the replacement of

old jeepneys as well as an overal l f leet expansion th roug h t he addi-t ion of new units , involving a total investment of some PI 5 mil-l ion. T h e si tuat io n is s imilar for pedicabs in Danao C ity, the ave-rage age fo r b ot h typ es o f vehicle being 'less than thre e years. Inthe case of tricycles and tartanillas, however, vehicles are, on ave-rage, a lm ost tw ice as old.

In m os t cases, a t tem pts are m ad e t o avoid heavy capital expend-itur es wh ere possible by ex ten din g the life of old vehicles throug hrecondi t ioning o r replacement of m ajor com pon ents such as en-gines, bodies, transmissions and sidecars. A vehicle can usually betotal ly rebuil t in a local sho p for ab ou t half the cost of a new o ne,resulting in a pro du ct th at look s and perform s alm ost as well asnew. This practice is particularly popular with tartanillas and tri-cycles , whereas jeepneys are more frequently replaced, du e a t leastin part to the current t rend toward diesel-powered units . Thischangeover al lows ow ners t o charge double the "boundary" fee, inexchange fo r a lower fue l cos t and bet ter fue l econom y. Th e p r oport io n of diesel jeepneys in Cebu has r isen from alm ost zer o in1 9 7 8 to o ve r 50 percent in 1983.

The great majority of vehicles available on the local market foruse as jeepneys are versions of Asian Utility Vehicles (AUV),offered by participants in the national government's ProgressiveCar Manufacturing Program. Vehicle manufacturing, parts pro-duction and assembly are largely concentrated in Metro Manila ,a l though some of the work is performed in Cebu. There i s onelocal m anufa cturer w ho builds jeepneys from scratch and seventeenm ajor t ricycle s idecar manufacturers , producing un its for the localmarket as well as for use in Mindanao, Bohol, Leyte, Negros andLuzon. Three of the tricycle enterprises are also engaged in build-ing pedicabs in Danao City. Approximately five different designsof tricycle sidecar are used in Cebu, with seating configu rations

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444 P H I L I P P I N E STUDIES

and appearances varying f rom place t o place according to localpreferences and tradi t ions. About f ive tar tani l la manufacturers re-main in Cebu Ci ty, m ost of who m are mo re concerned wi th repairand rebui lding than wi th actual manufactur ing of new uni ts . Someof the shops have also been engaged in a substant ial export pro-duct ion , supplying rigs t o custom ers in West Germany and theUn ited State s. Buses used fo r provincial services in C eb u are with-out except ion purchased as chassis uni ts f rom overseas, uponwhich a local body is instal led by one of a handful of bus bodybuilders. This al lows for easy rebuilding of the body when neces-sary, w i tho ut replacing the en t i re uni t .

On average, the proport ion of the retai l pr ice of new publictransport vehicles ul t imately remaining in the Phil ippines - andhence the i r cont r ibut ion to the na t ional economy - varies fromab ou t 3 9 percent for buses to 6 5 percent for jeepney s a nd tri-cycles, 70 percent for pedicabs a nd 9 8 percent for tartani llas .Clearly, the larger th e vehicle and th e m ore sop hist icated the tech-nology, the greater the dependence on imp or ted comp one nts .Fur ther technological evolut ion has the potent ia l of nar rowingthe gap between buses and jeepneys, however, an d the de ve lo pm en t of a twenty-six-passenger model in 19 83 is a ma jor s tep inthis direct ion. But technological considerat ions ca nn ot ful ly ac-co u n t fo r the indu stry's c on du ct . Pricing policies are equ al ly cen-tral t o an exam inat ion o f Cebu's public t ran spo rt service.

P R I C I N G P O L I C I E SAlthough public t ransport fares, as regulated by governmentagencies, are r igid and unresponsive t o co nd it ions of affordabil i ty

and produc tivi ty, in practice th e industry has develop ed a sensitivepricing mechanism. Fares are adjusted according to the abi l i ty ofpassengers to pay, the level of competi t ion on a part icular routeand the unde rlying costs of ope rat ion , result ing in high mobil i tyat a relatively low cost t o th e users.Fares for the three motor ized m odes are fixed and regulated bythe BOT, and are enforced by the r iding public, which is constant lyo n guard to avoid being overcharged. Within th e urbanized area ofM etro Cebu , ' authorized fares are usual ly str ict ly observed byjeepn ey drivers. O n the longer-distance provincial route s, how ever,

12. As far as Talisay i n the so uth , Mandaue a n d Lapu Lapu in the north (Fig. 2) .

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PROVINCIAL TRANSPORT 445

as well as on all provincial buses, actual fares are substantiallybelow official rates. T his is primarily due to strong co m pe titionand the need fo r a full load in orde r t o mak e a long trip worth-while. The ability of the riding public t o pay the au thorize d dis-tance-related fares also declines considerably outside the MetroCebu area. In order to attract customers, public transport servicescannot charge rates in excess of what the market will bear, even ifsanctioned by governm ent authorities.Regionally within the province of Cebu, distinct variations interms of the deviation of actual fares from authorized ones areapp aren t. F o r exam ple, fares t o Cebu City from five settlem entsin the northern part of the island are, on average, 60 percent ofthe level authorized by the BOT. In the southern part of the p r evince, however, fares from eight towns for which data are avail-able average only 42 percent of the authorized level. This seemsto be a direct reflection of local incomes and affordability, assouth ern Cebu is recognized as an area of greater poverty than thenorth. In southern Cebu, particularly in the barrios, "one discoversa m easure of desti tut ion and eco nom ic stagnation not t o be me twith anywhere else in the Philippines."' "No other part of thecountry has been plunged into such an extreme and protractedstate of economic tag nation."'^ Thus it is clear that the publictransport industry does adjust its fare structure to conform direct-ly t o th e ab ility of peop le t o pa y, regardless of official rates, whichare based solely and directly on distance travelled. Such a prac-tice is very i m po rta nt as the g reat majority of provincial passengersconsists of rural residents travelling to and from the city, thereb ysubstantially enhancing the mobility of individuals who may notbe able to afford public transport travel at the prescribed rates.

Whereas tricycle fares are officially controlled by the BOT, the yhave not been revised for several years. This is because responsibi-lity for tricycle registration, regulation and control is scheduled tobe transferred to municipal governments, and has therefore beenneglected by the BOT. As a result, in practice there are n o fran-chises for tricycle operation, meaning that most units are officiallyoperating outside the law, and fares are mutually set by driversand passengers on each route according to supply and demand.

13. Ramon Echevarria, Rediscovery in Southern Cebu (Cebu City : Historical Conser-vation Society, 1974), p. 81 .14. Ibid., p. 87.

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446 PHILIPPINE: STUDIES

The y usual ly ap prox imate jeepney fares for an equivalent d is tance,as t r icycle drivers of ten ci t e official jeepney fares as a taci t state-m en t o f policy fo r tr icycle fare levels.Pedicabs in Danao City have the lowest fares of any publictran spo rt m od e in the province, offering a ride betw een th e publicmarke t and anyw here in the cen t ral a rea in 198 3 for P0 .25 . Thisfare is determined and regulated by the local ci ty government ,which is in close co nta ct with eco no mic con dit ion s affect ing pedi-cab operat ions. Such low fares are possible only because thedistances involved are very short and, with the except ion of thedriver's fo od , n o fuel costs are incurred.

T h e Cebu City local govern men t is responsible for regulat ing t hefares charged by tartani l las within the ir area of ope rat io n. Thesewere specified by ordinanc e in 1 9 45 a t PO. 1 0 per passenger withinthe c i ty l imi ts , bu t the ord inance has no t been amended t o t akeinto account the r i s ing costs of operat ion and general cost ofl i v i n g . ' ~ o c h e r o s r e th e re fo re c ha rg in g fares t h at ex cee d th eau thor ized level , and are subject to a penal ty of 9200 or s ixmonths imprisonment for overcharging. The pol ice unders tandthe i r pos i tion , however , and d o no t apprehend cocheros who havemoderately increased their fares in unison. During the thirty-eightyears since the ordinance was original ly approved, fares have gra-dual ly r i sen from ten to for ty centavos. This i s a ra te which in19 8 3 was unifo rm ly observed and acc epte d by passengers, and al-m os t half the equivalent-distance jeepney fare. As th e price ofmotor fuel and lubricants has increased, the di fferent ia l betweenjeepney and tartani l la fares has consistent ly w idened.In su m m ar y, public t r ans por t fares in the province of Cebu areuni form ly f ixed an d set a t a level tha t has been reached dependingon the am ou nt o f demand and a ffordab il ity o f cus tomers , compe-t i t ion among supply elements, and base levels approved by regu-latory authori t ies. Bargaining occurs only in the event of specialt r ips th at can be negotiated ou tside the regular service. Only w ith-in urbanized areas d o actual jeepney fares confo rm t o those speci-fied by go vern me nt. Elsewhere, all mod es charge fares above orbelow the official tari ff , dep end ing on local condit ions. Long-dis-tance buses tend t o have fares substant ial ly below those auth or-ized, du e t o ex tre m e poverty in the rural areas: tartani llas and tri-

15. Percy R. Jamin , "A Study of the T ar tm il la Industry in Cebu City" (M.A. Thesis,l ,aculty of the Graduate School. University of San Carlos. 1974).

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Figure 2: Sh ort distance and local publicdransp ort, Cebu island, 1983

h

50km

Municipalities without regular internalpublic transport*Mun~cipalitieswith an internal tricycle

A route networkMunicipalities with internal tricycle &

A non-motorised (tananilla or pedicab)route networks0 unicipalities with internal jeepneyservices- ntermunicipal jeepney routes.. . . Intermunicipal tricycle routeseven these communities usually have one or two tricycles availablefor short trips, but lack an organised system of routes wlth regular

service.

i

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448 PHI LI PPI NE STUDIES

cycles charge fares significantly in excess of published rates be-cause of a refusal of the governm ent t o upd ate them . In general ,pricing policies are su fficiently sensit ive t o take in to acc ou nt m os teco nom ic and polit ical relat ionships.

Structure and conduct have, by themselves, revealed many use-ful insights, but fall short of completely explaining the adequacyor deficiency of provincial public transport. A th i rd e lement , the

I industry 's f inal performance, is also important . Indeed, good per-formanc e is essential t o good public trans port .

I N D U S T R Y P E R F O R M A N C E

Geographical and economic performance can include manyvariables, perhaps the m ost relevant for the public trans port indus-tr y being efficiency. While it is virtually impossible t o me asureefficiency by a single parameter, it basically involves the in terrela-tionship between level of service provided and the cost of offeringthat service. Level of service can be measured by many indicators,such as com for t, reliability, freque ncy of service an d availability o fservice. Although a high level of service may imply efficiency be-cause the users enjoy a great degree of satisfaction, it may be in-efficient from a tot al c om m un ity viewpoint if resources are beingused t o provide excess capacity. I t ma y also be inefficient if theoperator could improve performance by ei ther providing a higherlevel of service at the same cost , or the same service at a lowercost .Th ere are thr ee basic types of eff iciency th at need t o be consi-dered: (a) industry product iv i ty , which depends on behavioralfactors such as investment policy, operating procedures and re-sponsiveness to technological and operational changes, and is re-f lec ted in prof i t margins and output ra t ios ; (b) qua lity o f service,dealing primarily with user satisfac tion, which can be measured byqua ntitative indica tors suc h as waiting time, in-vehicle tim e o rspeed of operat ion, s t ructure of the route network and resul tantspatial coverage, o r by qualitative o nes l ike com fort and dem andresponsiveness of operat ion; and (c) the general efficiency withwhich the publ ic t ranspor t industry performs f rom a broad com-munity perspective. This final level of efficiency includes effectssuch as the industry 's contr ibut ion towards ful l employment ,equitable inc om e distr ibution an d geographical performance.

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P R O V I N C IA L T R A N S P O R TP R O D U C T I V I T Y

By virtue of cont inuing investment in al l modes of the publict ransport indust ry , be they drivers , owners o r op erators , i t can beconcluded that profi t margins and earnings are suff ic ient t o a t t rac tprivate enterprise. T h e re-equipment of Cebu's jeepn ey fleet be-tween 198 1 an d 19 83, for exam ple, has involved a total invest-m en t of so m e Q15 million, all fr om private sources. Buses an d tri-cycles are being replaced o r rebuilt as and when considered neces-sary by the owners, and the pedicab fleet in Danao City has alsorecent ly been mod ernized, Cebu City 's tartanil las, the oldest o f allexis t ing modes, are kept running through constant repai r and re-building.Public t rans por t drivers ,are earning am oun ts that are com pa-rable t o average incom es in C ebu, excep t for pedicab dr ivers, w hoearn only 5 7 percent of the average, and jeepney drivers, w ho te ndt o ea rn mo re tha n d oub le the average. Most imp orta nt , however, isth at over 7 0 percent of drivers in all five mod es appear to be satis-fied with their incom e.Owners who are unable to pay cash for their vehicle are rarelyable to earn a significant rate of return on investment unt i l pay-ments have been completed. In most cases, owners consider theirinvestment in publ ic t ransport as a secondary source of income,supplementing their main profession or business. This is ensuredby virtue of the capi tal required fo r a dow npa ym ent as well as thecol lateral needed for approval of instalment f inancing of the pur-chase. On ly with relatively large fleets of vehicles are owners ablet o co ncent ra te en t ire ly on publi c t ranspor t and depend o n th is astheir exclusive or primary source of family income. In such cases,however, ow ners have customa ri ly invested in suppo rt services,su ch as repair an d ma intena nce facil it ies fo r their fleet of vehicles.Owners with only a small number of vehicles can rarely rely onthis inco me alone, unless they are also driving one of th e uni ts a tleast three o r fou r days per week.Profi t margins are highest fo r the large ka bi t op erators, who, un-less they also own some of the units, have very l i t t le capital in-vested, y et are col lect ing substant ial fees from owners in exchangefo r the use o f thei r f ranchise . Fo r instance, an operator in con t rolof one hundred u n i t s cou ld in 198 3 co ll ec t ab ou t P200,OOO inone-t ime ent ranc e fees plus P6 5,00 0 per year in mo nthly fees. I t is

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450 PHILIPPINE STUDIESthese professional operators who are earning the greatest profit inthe industry, and w ho are therefore able to exert the greatest con-trol over the industry's structure and co nd uc t.Efficiency of op eratio n in qu antita tive terms is outlined "inTable 5, classified by th e five differe nt mo des. J eep ney s clearlycarry the largest nu m be r of passengers per d ay, b u t this is qualifiedby the sho rt distances traversed when co mp ared t o provincialbuses, which are by far the most productive when passenger-kilo-meters are considered. Of the motorized modes, jeepneys are themost efficient in terms of productivity per unit of fuel consumed(passenger-kms per liter), the only non-size-related measure. Ave-rage o ccup ancy is highest for the t w o non mo torized modes, partlyas a result of the very sho rt average trip distances, which allow fo ra higher IeveI of occupancy per vehicle. Furthermore, the smallerth e vehicle's passenger capacity, the easier it is t o achieve a fullload m ore frequently.

Additional productivity measures are presented in Table 6,again clearly demonstrating the effect of distances travelled on

Table 5: Estimated Measures of Produ ctivity and Efficiency byMode, Cebu 1983 Tar-Average per vehicle Jeepney Bus Tricycle tanilla PedicabPassengersldayPassenger-kms/dayaPassenger-krns/kmaKilometers/dayLiters of fuel/daybLiters/100 kmsbCost of fuel per

passenger-km (centavos)Passenger-krns/literaAverage occupancy(percent)d

a. assumes 75 percent of route distance as average km s/passengerb. diesel fuel fo r jeepneys and buses; petrol-oil mi xtu re for tricyclesc. cost of foo d for the horsesd. passenger-kmslkm divided by seating capacity (see Table 1)

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P R O V I N C IA L T R A N S P O R T 45 1m ark et share, especially with respect t o the relative position of tri-cycles and provincial buses, which is virtually reversed when dis-tance is taken into account. The contribution of tartanillas andpedicabs, while fairly substantial from a point of view of totalpassengers carried per day, becomes negligible when distance is in-cluded. This is understandable if the local nature and slow speedof the non m otorized modes are considered. Th e real performanceof Cebu's public transport industry cannot be appreciated, how-ever, without realizing that the total number of passengers carriedper day (1,852,980 - see Table 6) is almost equivalent to theisland's entire population ( 1,941,979 in 1980).' Whereas thisridership is certainly not evenly distributed throughout the island,being largely concentrated around the urbanized area of MetroCebu , it do es indicate a high overall level of mobility.

Table 6: Estimated M arket Share of Public Transp ort Modes,Province of Cebu 1983Mode Passengers Per , Passenger-kms Per

carried per day cent per day cent

Jeepney 1,304,440 70.4 8,498,600 70.8Bus 43,740 2.4 2,788,290 23.2Tricycle 386,040 20.8 619,850 5.2Tartanilla 8 1,960 4.4 82,450 0.7Pedicab 36,800 1.9 14,000 0.1Total 1,852,980 100.0 12,003,190 100.0

Total cost of providing public transport service is understand-ably higher for those modes with the lowest passenger capacity.Because i t rarely carries mo re than one o r tw o passengers a t onc e,the pedicab has the highest unit cost, with tricycles and tartanillasno t far behind. Th e latter's co st is almo st as great as fo r its m oto r-ized counterpart because of the need to purchase, maintain andfeed tw o horses f or each rig even thou gh only on e is in use at any16. 1980 Integrated Census of the Population and its Economic Activities (Manila:Republic of the Philippines. National Economic and Development Authority, NationalCensus and Statistics Office, 1980).

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452 PHILIPPINE STUDIESt ime. Th e jeepney emerges as the m ost eff icient of all f ive modes,with a cost per passenger-kilometer slightly less th an th e bus. Thisis par t ly due to the ext ra expense of formal ly emp loying con-ductors , dispatchers and maintenance personnel , and part ly tothe inferior fuel economy per passenger of buses (Table 5). Whilethe average provincial bus has a seating capacity 3.6 t imes tha t ofthe average jeepney, fuel consumption is 4.5 t imes greater. Thepropor t ion of uni t cos t composed of labor (mainly the earningsof drivers and conductors) is affected primarily by vehicle sizeand the source of motive power. Th e larger the vehicle, the lowerthe proporkion of co st com posed of labor (buses an d jeepneys) ,and the low er the expe nditu re on fuels , the higher the labor com-po ne nt (pedicabs and tartanil las).Th e abil ity of the industry t o take advantage of oppo r tuni t iesto imp rove productivity is evident from the trend tow ard s dieseli-zat ion of Cebu's jeepney f leet as well as from exp erim ents withliquid petroleum gas (LPG) as an alternative fuel, conducted bysom e jeepney owners . Cocheros and rig owne rs have been try ing t oextend the productivity of the tartanilla business by carefully col-lecting horse m anure, drying it in the sun an d selling it fo r fertil izeras a by -prod uct of the tra nspo rt func tion. Tricycle owners are wellknow n fo r a t taching various ext ra sea ts on to the ins ide and out-side of the ir vehicles, thereby increasing potential seating capac ityby as m uc h as 10 0 percen t, t o a total of eight passengers. T h e aver-age seating capacity of jeepneys has also been increasing, as in-vestors ta ke advantage of the availability of mo dels with t w o addi-tional places. Concurrently, small twelve-seater models are slowlybeing phased out in favor of units with a capacity of s ixteen oreighteen passengers.Actu al road space occupied by the various types of public trans-port vehicles is shown in Table 7. When the average passenger loadis taken in t o account , ' i t appears tha t bo th conf igura tions ofprovincial buses an d jeepney s are th e m os t efficient users of roadspace. There is a negligible difference between the two sizes ofbus and the jeepney, suggesting that buses would have great diffi-culty in replacing jeepneys an d reducing road con gest ion in theprocess. I t needs to be bo rne in mind tha t jeepneys are far moremaneuverable and can accelerate an d sto p far m ore easily thanbuses, making the m mo re suitable for the urban environment.

17. Derived by multiplying average occ upa ncy by passenger capacity.

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PROVINCIAL TRANSPOR T 4 53Table 7 : Ap proxim ate R oad Space Occupied by Public Transp ort

Vehicles, Province of C ebuTartanilla Pedicab Tricycle Jeepney Small Large

bus bus

Passenger capacity 4 2 4 16 4 0 7 5Average occupancy(%) 8 3 85 6 5 6 8 6 0 6 0Average passenger load 3.3 1.7 2.6 10.9 24 4 5Overall vehicle 2.95 1.49 1.90 4.53 7.08 11.98length (m )Overall vehicle 1.55 1.03 1.37 1.60 2.02 2.49

width (m)Road space 4.6 1.5 .2.6 7.2 14.3 29 .8

occupied (m 2 )Road space per 1.39 0.88 1.0 0 0.66 0.60 0.66

passenger (m2)

These factors, com bine d w ith the abil i ty of jeepneys t o providea higher frequ ency of service fo r th e same level of demand du e t otheir lower passenger capacity, have made them increasingly at-tractive for the shorter rural services as well. On the longer runs,however, buses have prevailed because o f their advantages in te rm sof comfort , and since the drawbacks of a large vehicle are mini-mized in areas of low traffic w here few sto ps are made.

The tartanilla is the least efficient user of road space, mainlybecause o f the large a m ou nt of room occupied by the horse i tself .I t is also very slow a nd therefore frequently obstructs the flow ofmo tor ized t raffic, as ma ny of i ts routes operate on s t reets th at arefrequ ente d by cars an d trucks. O n average, pedicabs are even slow-er than tartanil las, bu t their ope ration is generally restr icted t ostreets with very l i t t le motorized traffic in the city of Danao. Onthe few occasions t hat pedicabs do operate on main thorough-fares, they are not very obtrusive because they are the narrowestof a ll vehicles and d o no t need t o block an ent ire lane. Pedicabsoccupy only 1.5 square meters of area, less than one-third of thespace con sum ed by tartanil las.Aside from productivity, which has largely been con cern edwith the abili ty o f Cebu's public tra nsp ort industry t o satisfac-

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454 PHILIPPINE STUDIEStorily provide attractive returns to its providers, the users areequally if not more important. In order to evaluate how well theindustry performs in meeting their needs, service quality is acrucial consideration.

Q U A L I T Y O F S E R V I C E

Quality of service offered by the various modes is very good,especially considering that none of them accommodates standingpassengers. Comfort is assured by providing a seat for everyone,usually well padded with extra back- or head-rests, handholdsand steps. Many of the motorized vehicles are equipped withstereo music, and cleanliness of the interiors is usually wellmaintained. The primary difference between levels of comforton buses and jeepneys is the seating configuration. Jeepneypassengers sit facing inward, the low roof and cramped condi-tions preventing a good view outside. It is not possible to standup in a jeepney; boarding and alighting require a crouched posi-tion. Comfort declines considerably when more than sevenpassengers are required to sit abreast on each side in the rear sec-tion of jeepneys. These factors make jeepneys unsuitable for thelongest distances, whereas buses provide a more appropriate styleof accommodation. Buses also have a much more extensive capa-city for carrying luggage than jeepneys, explaining why they arepreferred for the longest-distance routes.

Conditions of comfort are highest in pedicabs, whose capacityis limited by the driver's pedalling ability to a maximum of twopassengers. Tricycles are prone to greater crowding at certaintimes, and provide a less comfortable ride because they frequentlyoperate over rough roads with a loose or broken surface. Tartanillasare the least comfortable, due to the lack of pneumatic tires andextremely rudimentary suspension. Rig seats are also rarelypadded, composed simply of two wooden benches, possiblycovered with a layer of vinyl or plastic. But since the averagetartanilla trip is less than one kilometer in length, the lower levelof comfort in horse-drawn vehicles can be tolerated, and it ismore than compensated for by low fares.

Frequency of service among Cebu's public transport modes isvery high, providing a negligible waiting time for passengers, ex-cept in remote areas or late at night. For example, average service

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PROVINCIAL TRANSPORT 455frequency on most major jeepney routes in Metro Cebu is betterthan one vehicle per m inute. On som e routes, vehicle flows ex-ceed 400 per hour, which translates to an average frequency ofless than ten seconds.

Tricycles, tartanillas and pedicabs offer service frequenciesgenerally equivalent t o or bet ter tha n jeepneys, as they are usuallywaiting for passengers in a queue at terminals. Waiting time israrely greater than the t ime i t takes t o fill the vehicle (tw o to f ou rpassengers). As man y riders on ly travel o n these mo des fo r veryshort distances, vacant seats are not difficult to find, making i teasy for people to board en route. Buses, due to their large capa-city and long distance travelled, have the lowest frequency ofservice, ranging from ab o ut every half ho ur on runs t o To ledoCity, t o ab ou t three or four tr ips per day t o outlying towns andvillages in the provincial hinterland (Figure 1). A relatively fre-quent service to the farthest reaches of the island is maintainedbecause of the demand generated by connecting ferry passengersfrom Negros in the south and Leyte, Masbate or Bantayan Islandin the nor th .Vehicles of all sizes tend to proceed along their respectiveroutes as fast as permitted by their motive power or by trafficflow, usually ensuring a rapid ride and minimizing in-vehicle time.Traffic delays due to congestion are relatively infrequent. Whatbottlenecks do occur are concentrated around public markets,road con structio n projects and major central shopping areas duringthe height of peak hours. Because of their predictability, thesedelays can be avoided by regular travellers who are familiar withtraffic conditions.If there are inhabited areas in Cebu that are not served by pub-lic transport, it is because roads are either nonexistent or impass-able. Figures 1 and 2 depict the penetration of bus, jeepney andtricycle services into the provincial hinterland. All municipalitieshave regular services t o th e provincial capital as well as t o neighbor-ing towns. Most places with a population exceeding 20,000 havean internal network of tricycle routes, in some cases augmentedby nonmotorized vehicles. Whereas smaller communities usuallyhave several tricycles available for local trips, places with fewerthan 20 ,000 inh abitants are clustered very close to th e nationalhighway and lack an organized system of routes with regular ser-

18. As these figures refer to an average, peak period services are more frequent.

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456 P H I L I P P I N E STUDIES

vice. ' "any neig hbo rhoo ds, even within th e cities, d o n o t havefacili ties fo r vehicular access and can only be p ene trate d on foo t.

No single area of significant population can be identified ashaving a deficiency in public transport service. But because of thehigh co ncentra t ion of services to and from Cebu City's do w nto w narea, i t is sometimes diff icult for people to travel between differ-en t par ts of the metropol i tan area w ithout having t o t ransfer inthe city cent er. This lack of cross-radial services, bo th o n a provin-cial and metropolitan scale, is inconvenient, but human activit iesare very strongly oriented towa rds Cebu City. The province'slargest and m ost popu lar open-air m arket , shopping centers ,financial institutions, universities, wholesalers and port activitiesare all located in the central area of Cebu City.Flexibil i ty of operation allows most public transport modes tobe very demand-responsive. Vehicles occasionally deviate fromtheir usual rou tes t o bring passengers closer t o their destination,o r can a l ter th e ro ute t o a llow for shif ts in d em and pat terns a td i f fe ren t t imes of the d ay, da ys of the w eek or seasons of t he year.They are thereby also able to circumvent accidents, traffic bott le-necks or o th er temp orary problems. Because drivers are m ostfamiliar with the precise nature of passenger demand, they areable to adju st their service to suit changes very rapidly, altho ughthe recent jeepney re-routing program m akes th is mu ch moredifficu lt than in the past." Due to the compet i t ive na tu re o foperat ion, dr ivers are of ten wil l ing to go out of their way toattract passengers and to please them, thereby providing a higherdegree of availability and accessibility. A f ina l component o f theindustry 's perform ance concern s general efficiency from a broadcom m uni ty po in t o f view.

G E N E R A L E F F I C I E N C YConsider ing the performance of public t ranspo rt from a g e e

graphical viewpoint, spatial variations are clearly apparent. Someareas have more frequent service than others, some have a denser19. The one major exception is the towns of Ronda, Alcantara and Moalboal, eachof which has a populat ion under 20,000. These three com munit ies are very close to-gether ( four ki lometers between each tow n center ) and share a com m on pool of tricyclesproviding inter- and intramunicipal service. Their combined population of 37,241 istherefo re a m ore mea ningful f igure.20. A Metro Cebu Jeepney Rerouting Program was implem ented in Septem ber 1983,specifying precisely w hich s treets could bc traversed by certain routes. Although intend ed

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PROVINCIAL TRANSPORT 457network of routes , and some are served by a greater var ie ty ofmod es. These differences can alm ost always be explained by varia-t ions in dem and , being a direct reflection of absolute pop ulat io n,pop ulat io n densit ies, levels of eco nom ic act ivi ty, o r the presenceof a major t r ip generator such as a ferry terminal o r publ ic ma rke t .In spite of these variations, over 97 percent of the populat ion ofCeb u island lives in municipalit ie8 th at have ten o r m ore dir ec tbus t r ips per day l inking them t o the provincial ~ a p i t a l . ~ ' hilesimilar measures are difficul t to qbant ify within the metropoli tanarea, there are very few people w ho l ive, work o r at t en d educa-t ional inst i tu t ions greater than 3 0 0 meters from th e nearest publ ictran sp or t service.Because of the relatively small size of Cebu's public transportvehicles, the industry is very labor-intensive, directly employingdrivers, conductors, luggage boys, dispatchers, mechanics, washboys, and drivers' companions. Each tricycle, pedicab, tartanillaand urban jeepney normal ly has one ful l - t ime or two par t - t imedrivers. Small buses and provincial jeepneys require a driver anda co ndu ctor, with large buses of ten employing a driver, con duc torand luggage boy. Aside from this there is a large contingent ofyou ng boys wh o wash the un it s , and companions wh o ac t as de-facto con du ctors by assisting the drivers, w ho in turn pay f or theirfo od while together. While this is in part the sy mp tom of a mo refunda me ntal problem of unde remp loym ent , i t a lso underl inesthe public t rans por t industry 's abi li ty t o abso rb surplus labor in auseful an d prod uct ive way. I t has ma de a substant ial con tribu t iont o the creat ion of perm anen t em ploym ent opportuni t ies , includingapproximately 20,000 dr ivers , 4 ,000 conductors and helpers , 100owners and operators , and 10,000 or more in anci l lary servicesand industries. When famil ies and dependants are included, thisaccou nts for som e 15 0,0 00 individuals , or between 7 a n d 1 0percent of th e provincial po pulat ion.On fi rst observat ion, i t might appear that an unreasonableproport ion of income der ived from the indust ry i s c la imed byvehicle owners, bu t after closer exam inat ion i t becomes clearth at f inancial obl igations and maintenance requi rements con sum eto improve service and reduce travel times, the scheme unnecessarily restricted the flexi-bility of jeepney services, resultingin largesca le strikes and protests (Metro Manila Times,24 September 1983).21. Over 80 percent lives in municipalities that have thirty or more direct trips perday (Fig. 1).

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458 PHJLIPPINE STUDIES

m os t of th e daily "boundary" fee, such th at a significant retu rnon init ial investment cannot be earned unti l after the vehicles arefully am ortiz ed. As individuals, i t is only the large kab it opera torswho are col lec t ing substant ia l sums of money from the publ ict ransport industry . Fur therm ore , f inancing companies , m ot or ve-hicle dealerships, oil companies, parts suppliers, wholesalers andretailers , manufacturers, insurance agents and the government2collect monetary benefits . Thus, while income distr ibution withinthe industry is far from opiimally equitable, i t reaches a substan-tial cross-section of th e provincial popu lation .

A D E Q U A C Y O R D E F I C I E N C YFrom the foregoing analysis i t is apparent that exist ing public

transport in Cebu province is, in general, providing a satisfactoryservice that adequately meets the mobili ty needs of is land inha-bitants . T he en tire province is well served by five mo des, caterin gto demands a t neighborhood, metropol i tan and provincia l sca les .Because of the ir flexibility, ope rat ion s are sensitive to shifts indem and, an d fares are tai lored t o the abil ity of users t o pay. Th eindustry is owned and operated entirely by private sector enter-prise . D ue t o i ts prof i table na ture , i t m akes few demand s on publicresources, contributing to government revenue through a varietyof federal taxes. Ow nership and em ploy me nt are scattered through-o u t the province am ong local residents, directly sup port ing thelivelihood of close to on e-ten th of the provincial population.

The major deficiencies of the public transport industry includethe lack o f cross-radial services, bo th within M etro C ebu an d acrossthe is land, with most services concentra ted on downtown CebuCity ; the inabil i ty of bus drivers t o exercise con trol over theirearnings;2 and the inequit ies of the kabit system. Nevertheless,these drawbacks are no t of a suff ic ient magni tude t o require afundamental restructuring of the industry. They can be effective-ly addressed at a practical level without disrupting what is essen-tially a n effi cien t indus try providing a high level o f service at lowcos t t o th e taxpayer. In this light, i t is extremely diff icult to jus-tify the exten sion of M etrorail-style capital-city policies t o thepublic t rans por t systems of provincial areas.

22. Through fuel taxes, license fees and traffic fines.23. They receive a fixed daily wage as oppo sed to renting a vehicle and retaining the