Mobility in the new normal (Part 3): The cost of social distancing

To achieve social distancing in public transportation, basically, we decrease vehicle capacity to around 12-25% (50% for jeepneys), depending on the seating (and standing, if any) configuration.  To compensate for that, we do any or all of three things: 1) increase fleet capacity, 2) change to higher vehicle capacity, or 3) increase the frequency.  This means less revenue to the operator and ultimately higher fares for the passengers.

The elephant in the room in all of this is “who shoulders the added costs?”  If the passenger load decreases to 25% of what it was before, the farebox shrinks by the same amount.  Definitely, operators – network lines or single proprietorships, can’t survive at these conditions.  Especially the small ones.  There are already government announcements on increases on fare rates, but these are small compared to the actual costs of operations.  A reduction in farebox to a level of 25% will mean an increase in fare levels of up to 4 times what it was, to maintain the original profit margin.  Operators, especially the biggest ones, may be able to survive with smaller increases, but only up to so much.

The elasticity of the fare on the side of paying passengers is also limited.  Transportation is a major part of daily costs for working people and increasing fares would make it impossible for them to survive.  I’ve read an FB post that tricycle fares in a certain city in Metro Manila is now P18 for the 1st kilometer plus 1 peso for every succeeding km.  That’s more than twice jeepney fares in Cebu before! We can think of possible fare levels, but one thing is sure – these would be so high a huge number of passengers can’t afford it, and yet still, a large number of operators won’t be able to continue operating without getting bankrupt.

This is where this goes ugly.  Government can’t raise fare rates so high that many can’t afford them.  But if the fares are not raised high enough, many smaller transport operators will fold.  Then it becomes a chain reaction and an unmanageable downward slope after that.  When transport operators, especially the smaller ones, fold, it results to a shortage of transport supply.  People will rush and compete for rides it will create havoc on social distancing and results to people waiting for 2-3 hours for a ride.

When people could not get a ride, or could not afford one, or both, there will be an ugly slide to considerable unemployment, which will pull the economy down, and we will be worse than where we were prior to the “opening” of the lockdown.  Not to mention the threat of a second wave of Covid-19 due to a breakdown on social distancing.  This is a grim picture I hope will not happen, but which is not uncertain if nothing is done on the transport economics side of mobility.  The engineering side is easy, we just need to break a few hard, ingrained opinions and policies.  The resulting economic outlook, government must resolve. (To be continued)