Fix franchise system, not cut bus drivers’ earnings

Business World, Philippines, July 10, 2015

NONGOVERNMENT organization Action for Economic Reforms (AER) proposed to remove the commission-based compensation scheme for bus drivers to further encourage them to follow traffic rules, the group said in a statement issued on Thursday.

However, bus companies have argued against the proposal, pointing out that the current bus franchising scheme allows for “too many operators,” Alex R. Yague, spokesperson of the Provincial Bus Operators Association of the Philippines, said in an interview.

Mr. Yague made these remarks after he was asked to comment on the AER’s proposal. Although giving bus drivers fixed salaries — as mandated by a Labor department order issued in 2012 — was supposed to encourage them to respect the road rules, it may not have made any difference, the AER said.

“The move may not have made a difference as bus companies still gave commission to entice its drivers to get more passengers per run,” the AER said in the statement.

Instead of removing the commission-based compensation scheme for drivers, the government should group bus companies into several consortia to reduce competition among them, Mr. Yague said.

“Similar to how buses operate in other countries, if there are only two to three operators in a given route then an hourly-based dispatching system among buses can be implemented,” he explained.

Meanwhile, the commuter’s group National Council for Commuters Protection (NCCP) said it also understands the plight of the bus companies, citing that the compensation scheme should stay.

“In all industries, there is a form of performance-based incentive. So it would be discriminatory if we just remove that,” NCCP President Elvira Y. Medina said in a separate interview.

“The fixed salary for bus drivers is so low that they are forced to make up for it with the compensation,” she said further.

What the government can do, Ms. Medina said is for government to subsidize the transportation industry even by just a portion, and then penalize erring bus companies to ensure that their drivers follow traffic rules, she said.

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