Transportation cooperatives?

By Atty. Antonio P. Pekas

“For small operators they undergo big sacrifices to get their units on the road again at the shortest possible time.”

The single unit franchises which were being issued by the Land Transportation Franchising and Regulatory Board (LTFRB) was a boon for small investors particularly OFWs who made some money serving foreign employers.. Specially those who were drivers here and then went overseas to work. When their contracts were finished, they “bought” franchises and a jeepney or a cab or a van and then drove these themselves. Surely they were making some good money for they took good care of their units and some of them even ended up owning several units.
Other OFWs invested in vans which they rented out as “hatid sundo or hatsun” to the airport or to any other areas. Now that we Filipinos are relatively well off and have budgets for weekend trips to the beach or resorts in Pagudpud or Subic, customers are all over the place. For quick trips also to Metro Manila, where you go in the morning and then comeback in the afternoon, by businessmen or professionals like us lawyers, these rented units with drivers are convenient, particularly for people like me who are not young anymore.
Because there are so many small opoerators of vans or SUVs or cars for rent, the rates are now very reasonable.
For those about my age, this situation is a far cry from the days when buying a kilo of “tuyo” or “tinapa” was a big problem.
These individual operators of vehicles for rent or single unit jeepneys or cabs or vans with fixed lines (or without) such as those plying the Baguio-Buguias or Baguio-Dagupan routes (there are vans going everywhere) they are doing quite well.
Now here comes the LTFRB abolishing the single unit francshises for such vehicles. It wants operators to organize as cooperatives or corporations. Their reasoning is that our transportation system is backward because small operators don’t have enough capital or that they are small time.
But these LTFRB people don’t know what they are talking about. The success of small operators is because of their proprietary sense. They own their units so they personally take good care of these. Evenn if they don’t have big capital, they can remedy problems whenever they arose.
On the other hand, the relationship between bosses and drivers in corporations and big cooperatives is impersonal. Drivers would not care less whether the units are being taken care of properly. As long as they get their monthly pay, they would not care even if the units will be dilapidated in no time.
That is why there is no widely held transporation company around that proggressed. What I mean by widely held is that there are so many stockholders. The successful big transportation corporations in this country are usually owned by family corporations. And I know whereof I speak because I cut my teeth as a lawyers in what used to be the biggest land transporation company in Souteast Asia. I also had several bus companies as clients when I was still Metro Manila based.
So there, the secret in running a successful transportation business is the proprietary sense or the sense of ownership. This is because a transporation business is problematic. It depends on proper maintenance and care in the operation of the units. When acccidents and breakdowns happen, swift action has to be undertaken because every day of delay means a lot of money lost. Small operators can do this even if it means big sacrifices while corporations have to navigate the usual corporate bureaucracy even if just to buy a lousy spare part causing delay.
Supervision is also critical because the units costing millions leave the boss’ watchful eyes. They are out there on the road. For big companies, they have to employ a lot of inspectors or wathcdogs making their operating overhead high. To compensate they often would do a lot of shortcuts in maintenance or in other operational activities.
So in reality, or at least in many cases, it is actually the small operators’ units which are better maintained
The biggest advantage however in allowing small operators is it means democratizing business or economic opportunities. This results in equitable distribution of wealth. Otherwise, if only big corporations or cooperatives are allowed to operate, it will result in even widening of the gap between the poor and the rich.
Please note that a corporation or cooperative to be qualified for a transportation franchise now must have a minmum capittalization of P75 million.
The LTFRB is not for the small people like you and me.**

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