Body Builder Group shows how jeepney operators can make more money with proposed new Eco PUVs
The Automotive Body Manufacturers Association of the Philippines (ABMAP), the official organization of truck body builders in the country, yesterday shared the computations on how operators will be able to afford the proposed new Eco PUVs being planned by the Department of Transportation, Department of Trade and Industry, Truck Manufacturers Association, Philippine Parts Maker Association, Electric Vehicle Association of the Philippines and ABMAP.
After consultation with 1Team which operates more than 100 PUJs today, numerous information were gathered and collated by ABMAP with respect to operational and financial results of fleet operations. As per assumptions and details provided by 1Team, ABMAP concludes that the operators will be able to afford the brand new, modern PUV.
In a press statement, ABMAP said that the study validated that each jeepney route is unique and income generation varies from location to location, mostly dependent on passenger density.
“The low-density, lower income jeepney routes generate about P1,500 per day which makes it difficult to generate a substantial take-home income with”, it said. “This passenger volume and rate of income would only be viable for tricycles and usually, routes that have this low passenger volume do have tricycles competing with them. For P1,500 a day operations, only tricycles with its low cost of capital and operations can afford plying these routes”. says Yuri Sarmiento the General Manager of 1Team.
ABMAP explains that the higher-density, higher-end Jeepney routes would be the longer ones going towards outside of the city. “These would generate up to P6,000 pesos a day. But you have to understand that Jeepneys only make money when they are full of passengers. However, that only happens during rush hours from 6:00 to 9:00 in the morning and 5:00 to 8:00 in the evening. The rest of the day is non-peak hours and it makes more sense for the drivers to just rest and wait for the rush hours again”.
“In this case, it makes sense to track them with GPS and to have some kind of deployment system to only fields enough PUVS on the road at these hours to make sure that they run at full capacity and to lessen traffic congestion”.
ABMAP explains that in the case of the current PUJ, the gross revenue of a typical daily grind of a 1Team driver is on the average at P4,000 a day. “Expenses would be fuel at P1,000, operator boundary or driver salary at P600 (operating from 16 to 18 hours per day) and maintenance expenses of P400 a day. This will leave the driver with about P2,000 net per day”, it said.
“But there will be major improvements in income once the driver or operator moves to a brand new Eco PUV”, ABMAP said. “Since the powertrain and all the parts and components will be brand new, fuel expense will be cut to only P570, driver salary remains at P600 (but operating at about only 10 hours a day) and maintenance will be significantly lower at P100 a day. Then, since the modern Eco PUV will have a higher ceiling that allows for standing passengers, this will increase income by P200 per day. So the net income will increase to P2,930 a day”.
Sarmiento notes that at a basic employee salary of P600 per day, their 1Team driver averaged from P23,000 to P25,000 per month with overtime last September 2017. “And today, they only have to drive for at about 10 hours compared to 16 to 18 hours in the past”.
He notes that fuel expenses will be cut because the brand new engine will be more fuel efficient, with the range extended from 4 km/liter to 7 km/liter. “Maintenance and repair costs will be very low because aside from the vehicle being covered by the standard auto industry warranty, it is not expected to have a major break down at least in the first year of operations”.
“Furthermore, the chassis will now be properly aligned. Did you notice that most jeepneys run diagonally and the drivers are not seated aligned with the steering wheel? This is because of the crudely-made and misaligned chassis frames. These cause major inefficiencies and tires that wear our unevenly and prematurely. There is less road traction and thus more fuel waste”.
Sarmiento emphasizes that a major negative factor also for the old jeepneys is the downtime. “Due to their age, old jeepneys are broken or sidelined 50% of the time or for 15 days a month. Eleven days for maintenance and repairs and four days for number coding with maintenance and repairs. That is fifteen days a month downtime, fifteen days of extra net income lost for them amounting to P30,000 monthly”.
ABMAP concludes that if we compute them all in all and compare, the old jeepney will generate a net income of only P30,000 a month (P2,000 a day times 15 working days) while the modern Eco PUVs will generate P76,180 net income a month (P2,930 a day times 26 working days). “The difference is P46,180 per month. Loan repayment problem or paying for the brand new Eco PUV on installment? A no brainer if you ask us. This difference is more than enough to pay for the P26,000 a month amortization of a brand new, less polluting, efficient and no downtime modern Eco PUV”.