Logistics & Transportation
Part 1: Fish or Fowl – When It Comes To Fare Fixing, Are We In The Public Or Private Sector? – To Achieve Vision 2030 For The Public Transportation Sector A New Business Model Is Needed Now…NTAG
The recently formed National Transporters Alliance Group Limited (NTAG) has outlined a very ambitious plan titled – A National Public Transportation Plan For The Jamaican People 2022-2030.
Interim President and CEO of the newly formed National Transporters Alliance Group Ludlow Mclean, is hailing the formation of this cooperative style representation body as game changing for the Public Transportation sector.
The organisation he said was formed to better represent the interest and welfare of Route and Hackney taxi operators islandwide offering rides and last mile delivery services, and courier bikers, all operating through App based technologies.
The plan outlines in some detail what NTAG describes as a new business model based on a number of strategic and fundamental changes and implementation of a technology platform.
The purpose of the NTAG plan is to present a pathway and course of deliberate actions that will improve efficiency, transparency, and fairness, while providing the framework to accelerate the economic growth and development within the public Transportation sector by 2030.
“Our Mission at NTAG is To Achieve Vision 2030 Outcome #9 Of A Modernized Public Transport System That Contributes To Improved Quality Of Life For All Jamaicans.”
In this Six (6) part feature, Businessuite takes an in depth look at the plan for wider public consumption and discussion.
Part 1: Fish or Fowl – When It Comes To Fare Fixing, Are We In The Public Or Private Sector?
“Governments do not expect to make profits from the necessary support for public transportation. An efficient service is important for productivity and other economic benefits that come with moving goods and people. There needs to be a more disciplined approach of how buses are run in urban areas and then those who are served will follow suit. Public transporting should be subsidized. The economic benefits of subsiding will not be direct. The more efficient the public transportation becomes is the more efficient workers become; they reach work on time. They do not have to spend two hours or maybe 30 minutes in traffic” Dr. Lawrence Nicholson The University Of The West Indies
Are We In The Public Or Private Sector? This is a key and fundamental question the plan first seeks to establish, indicating that it must be addressed and clarified without doubt, especially in the matter of fixed and controlled fares.
Government imposed fixed and controlled fares is seen as the most pressing factor impacting investors and operators in the sector, as it directly impacts revenue, profitability and increased investments in the sector.
NTAG poses the following questions.
“Are we operating as private sector entrepreneurs, like the supermarket, gas station,
market vendors, farmers, manufacturers, banks, insurance etc., putting up our own
capital, and paying taxes etc., with the expressed goal to make a decent profit and ROI….If we make a loss that is for our own account.
OR
Are we in the Government operated and controlled Public Transportation Sector offering a public service, supported, subsidised and funded in part by tax payers money, so the Government fixed and controlled fares to the public is lower, as in the case of the JUTC.”
This question is raised against the background of Government policy, as articulated by Finance Minister Nigel Clarke in his 2022 budget presentation where he stated with much fanfare and chest beating that his Government does not believe in price fixing, a very important point to note.
“There is lot of history of failure with the policy of price fixing. History has taught us that when you fix prices, quantity inevitably declines and quality frequently suffers.” Hon. Nigel Clarke Minister of Finance and the Public Service
According to Hon. Nigel Clarke Minister of Finance and the Public Service in his budget presentation on Tuesday, March 8, 2022…. “We do not believe that telling banks what they must charge for a package of services solves this (fee) problem. We hold this view, as we know it would make matters much worse. We don’t believe in telling the market vendor what she should charge for mangoes or the sky juice vendor what he should charge for a bag juice.
There is lot of history of failure with the policy of price fixing. History has taught us that when you fix prices, quantity inevitably declines and quality frequently suffers. The reason is simple: if it is unprofitable to provide the services at the fixed price, the provider will simply choose not to provide the service and then we have a real problem. You can’t compel anyone to operate at a loss.
Also, whenever you try to fix prices instead of dealing with the fundamental underlying malady, the entity whose prices have been fixed will simply pass the costs unto consumers in other, potentially more damaging, ways.
We don’t believe in telling people what to do and in fixing prices. We don’t fix sky
juice price, we don’t fix bulla price, and we are not fixing no price. We do, however, believe in protecting the poor and vulnerable.”
According to NTAG this pointed comment by the Minister clearly makes their case and argument for allowing market forces and not the Government to set prices.
“When I hear people talk about a 15 per cent increase it is relative. That is on a $100 fare. It is not like a private sector employee who would see it as a very good increase because they are getting that on hundreds of thousands of dollars. We are business operators, self-employed individuals. We have been given basket to carry water over the years. We have not got a fare increase in over eight years, and every single thing we consume, to include taking care of our families, we are affected by that as well. Other sectors don’t have to apply to the Government for an increase. We have to apply and wait on them, so it is hard on the sector. We are told to get younger vehicles and when we do we can’t maintain the fleet.”
Sophia Campbell Head Route Taxi Association of Jamaica
NTAG’s position is that we are a private sector group of individual, corporate investors and operators, our firm position is that we are operating as private sector entrepreneurs, like the supermarket, gas station, market vendors, farmers, manufacturers, banks, insurance companies etc., putting up our own capital, and paying taxes etc., with the expressed goal to make a decent profit and ROI….If we make a loss that is for our own account.
NTAG does not support the view that the Government should set prices in the sector and that the forces of the free market should prevail, as outlined in the Governments position firmly articulated by the Minister of Finance in his 2022 Budget presentation.
“The truth is that each operator is licensed as an individual not as a corporation, but the same operator may operate multiple vehicles and each with its own specific road license to a specific vehicle and route. The individual is only required to come through an Association to deal with the Transport Authority, actually creating a cash cow for operators of these Associations. So, the answer to your question is yes an operator should be able to set his own fare structure. The problem it would cause is major disruptions and lots of variances in prices on any given route. Free trade is allowed in Jamaica. Price structuring no longer exist in Jamaica. Gas stations have the right to set his own prices. In fact, some corporate area gas stations have multiple prices in a day to capitalize on the rush hour crowd. What would be needed to make it work, is that every operator on a given route should discuss and agree on the price per route. They could also capitalize on raising the fare each time the gas goes up and decrease each time the gas price decreases”
Marcel Antonio Clarke Transport Sector Investor
Like Hon. Nigel Clarke, Minister of Finance and the Public Service, NTAG believes that the Government has better and more cost-effective ways and means of protecting members of the Jamaican public it deems warrants assistance and support in their public transportation needs. This in much the same way it subsidies the JUTC or provides PATH and other related social services, targeted at those who really need it.
“The operators are complaining about high fuel prices. they have to overcharge passengers in order to survive in a competitive industry.”
Ann Pearl President of the North East Manchester Taxi Association
In his budget presentation on Tuesday, March 8, 2022 Hon. Nigel Clarke, Minister of Finance and the Public Service said.. “We do, however, believe in protecting the poor and vulnerable. We do, however, believe in making more information available and allowing individuals to make their own choices. We do, however, believe that such a system is ultimately superior to one where you are told what to do.
There was a time we used to fix who could bring in food into Jamaica. You know what happened? The business people just set up shop in Miami and became the suppliers of the basic foods to Jamaica. Instead of making their money here in Jamaica, they made it in Miami.
There was a time we use to fix who could import cars. You know what happened?
The restriction created a shortage and led to massive increases in the price of cars.
Knee jerk price fixing doesn’t work, no matter how much you shout or scream. Solving fundamental structural problems work. Freedom works. Protecting the vulnerable works. We believe in delivering targeted support and when we target we go big. As much as practically possible, the Government wishes to direct the relief
towards persons who have been, and are, most affected and who have the least ability to cushion for themselves.”
“I think the time has come for players in the public transport sector to decide whether or not we should continue to call upon government and wait on government for a fare increase. I put it to you that the time has come for the sector to let the market decide on the true cost to travel. The Transport Operators Development Sustainable Services has been for the past several weeks looking at the suggestion by the Minister of Transport Hon Audley Shaw for a review of fares and the subsequent statement by the Minister of Finance Hon Nigel Clarke on the subject of price setting and fixing.
It is my humble view that if the Minister of Finance is to be taken by his words then the policy must be change to let the market decide the fares for the privately-owned public transportation and have a set fare for the government owned public transportation.”
Egeton Newman President Transport Operators Development Sustainable Services
Here again NTAG is in full support and in line with the Minister and the Government that solving fundamental structural problems within the Public Transportation Sector works. Freedom to set fares and prices works, and importantly protecting the vulnerable works. NTAG also believes in the Government delivering targeted support.
Part 2 Public Transportation Sector Cannot Survive On One Foot!
Logistics & Transportation
Part 6: The Key Stakeholders Required To Make This Plan Work, The Ministry of Transport & The Transport Authority – To Achieve Vision 2030 For The Public Transportation Sector A New Business Model Is Needed Now…NTAG
Logistics & Transportation
Part 5: The Key Stakeholders Required To Make This Plan Work – Drivers And Conductors – To Achieve Vision 2030 For The Public Transportation Sector A New Business Model Is Needed Now…NTAG
Part 5: Drivers And Conductors – Inability To Attract And Retain Suitable and Qualified Drivers And Conductors.
In his budget presentation on Tuesday, march 8, 2022 Nigel Clarke Minister of Finance and the Public Service spoke of the “Inability To Attract And Retain Talent In The Public Sector. It is generally agreed that public sector compensation is not competitive. Public sector compensation, as currently constructed, hinders the Government’s ability to attract and retain talent in the public sector. Those who serve in the public sector do so mainly out of service to country and you will hear the comments from time to time that they are subsidizing government operations. In this regard, trade unions have been advocating for decades for better wages and conditions for public sector workers.”
The Public Transportation sector is also facing a similar dilemma, that of the Inability To Attract And Retain Suitable and Qualified Drivers And Conductors.
“I am focusing on eliminating indiscipline in the transport sector and restoring the railway system. The public transportation system is critical for productivity, and when workers utilise the vehicles they should enter work feeling motivated, and operators in the sector must accept the responsibility that is required from them. We are going to lift our standards in this country, treating people with respect, treating them like human beings, and when they end up at work they feel happy and end up being more productive. Commuters must be able to travel in comfort, and that work will be done to reposition the Jamaica Urban Transit Company (JUTC), as the public transport system is central for students and workers.”
Hon. Audley Shaw Minister of Transport and Mining
As far as NTAG is concerned, and the vast majority of investors in the sector agree, the quality of the available pool of talent from which the sector sources human resources for these roles is grossly inadequate and in need of immediate overhauling. Addressing longstanding issues of job security, working conditions, equity, uneven application of increases, and inadequate salaries is an immediate and urgent priority of NTAG.
One thing Drivers and Conductors in the Public Transportation Sector all have in common is that they all believe that they are not adequately or fairly compensated.
This is a problem.
A vast majority of the public will tell you that they are dissatisfied with the level of public transportation service they receive.
This is also a problem.
Both these problems are related and as a sector we have to address BOTH problems and that is what NTAG proposes to do as part of its vision 2030 plan.
Transport operators who ply sections of St Andrew West Rural withdrew their services on Monday, leaving students and commuters stranded in Half-Way Tree, Stony Hill and other areas. Poor road conditions, seized buses and a demand for fare increase have been cited among the reasons for the strike action.”
Currently drivers and conductors are considered to be independent contractors, as they can choose when, where and how often they work. However, in exchange, they have no job security, vacation pay or other benefits such as pension and health insurance for themselves and family members.
This must change!
NTAG proposes as part of its vision 2030 plan that all registered companies operating in the public transportation sector, as a part of their key strategy execution, must ensure that all independent contractors and operators working in their company have the option and opportunity for job security, vacation pay and other benefits such as pension and health insurance for themselves and family members. This includes payroll payments on a weekly or every two-week basis to allow for accumulated income allowing for better allocation of income for saving, investments, statutory payments and importantly a pay slip. A pay slip provides proof of consistent income allowing for loan applications and other financial requirements.
NTAG will play a major role in ensuring that standards of entry are maintained at a suitable level, and that appropriate training opportunies are always available.
A key feature of this is a project NTAG is working on to develop a cloud based National Transporter Database of Driver and Conductors.
Problem Definition: There is said to be over 200,000 Available Independent Drivers of Public Passenger And Commercial Vehicles who do not own their own vehicle, and will drive for Stakeholders – Investor, Owner And Operator.
However, there is no National Central Addressable And Available Database that can be accessed by these and other stakeholders to view suitable candidates for employment and engagement. In addition, there is no way to reliably determine the work history, experience and expertise of these drivers, and so engagement is often a hit and miss situation. The vast majority of these drivers are transient in that they are not stable in their employment and are known to frequently move around, driving for different investors, owners and operators.
Proposed Solution: The creation of a NTAG National Central Addressable And Available Database that can be accessed by these stakeholders to view suitable candidates for employment and engagement.
A Bulletin Board will also be incorporated allowing Investor, Owner And Operator to post available positions and for Available Independent Drivers to view and apply.
Stakeholders:
National Transporters Alliance Group: Owners and operators of the proposed National Central Addressable And Available Database and responsible for vetting and uploading Available Independent Drivers into the system.
Available Independent Drivers and Conductors: who will apply and have their relevant information uploaded to the database, and pay an annual fee to maintain listing. They will also be able to access and view ONLY their records and file in the database, ratings, comments and recommendations from Investor, Owner And Operator. Ratings and comments from other parties such as passengers and customers should also be available.
Investor, Owner And Operator: These individuals or companies own and operate a single vehicle or a fleet of vehicles, and are seeking to engage Available Independent Drivers. They will apply and have their relevant information uploaded to the database, and pay an annual fee to maintain their listing, and will be able to access and view ONLY their records and file in the database, ratings, comments and recommendations from Available Independent Driver and Conductors. They will NOT have access to another Investor, Owner And Operator information in the database.
They will be able to access and view all Available Independent Driver and Conductors with a limited view of the records and files in the database, ratings, comments and recommendations. Ratings and comments from other parties such as passengers and customers should also be available.
Available Independent Drivers should be able to view limited information on these stakeholders to determine for themselves the suitability of these individuals as employers.
Information and Data Capture: This can begin during the NTAG membership onboarding process as the same information will be required.
Next Part 6: The Ministry of Transport & The Transport Authority
Logistics & Transportation
Next Part 4: The Key Stakeholders Required To Make This Plan Work – Investors and Owners – To Achieve Vision 2030 For The Public Transportation Sector A New Business Model Is Needed Now…NTAG
Investors and Owners
The Vision 2030 Jamaica – National Development Plan identifies extensive and high-quality infrastructure as a pillar of international competitiveness that: enables the efficient functioning of markets for goods, services and labour; increases the productivity of economic processes; and improves decision-making by entrepreneurs and other economic actors.
The returns to investment in physical infrastructure tend to be high in countries at Jamaica’s income level, especially considering the relative underinvestment in physical infrastructure in recent decades. These higher growth rates eventually increase the size of the economy and the levels of funding available for other services such as health and education over the medium and long term. High-quality infrastructure contributes to social and environmental goals, by improving access to public services, reducing negative environmental impacts and supporting the sustainable use of natural resources.
NTAG’s position is that if the Transport Sector Plan for Vision 2030 Jamaica is going to ensure the development of world-class transport infrastructure and services that contribute to the competitiveness of our producers and improved quality of life for our people, then it must provide for and facilities an environment for entrepreneurs to invest with a reasonable expectation for a return on their investment.
These entrepreneurs according to NTAG covers Investors and Owners in the Public and Commercial Transportation Sector operating as or through Registered Limited Liability Companies as license holders incorporating all classes of road licenses.
NTAG’s position is that as a private sector group of individual investors and operators all the changes it has outlined so far will allow for among other things the following:
1. More Investment: To achieve the 2030 goal and vision significantly more investment will have to be made to build out a modern and efficient fleet of vehicles, supported by a team of well-trained and compensated drivers and conductors.
Allowing investors to structure their business in a way that would facilitate accessing funding via the stock market will be a key driver for investment and funding to facilitate and accelerate growth.
2. ESOP: Allowing all stakeholders in the sector an opportunity to secure a stake in the profitable growth of the sector will allow for greater alignment of interest. NTAG wants to see drivers and conductors offered opportunies to invest by way of equity participation in the companies they are working and contributing to.
3. Transportation Centers: Importantly the Public and Private Transportation Sector will work with the Government in a Public Private Partnership to build out and operate suitable located Transportation Centers. There is clear mutual benefit in this.
“A major part of the problem is that the Transport Authority is issuing licenses and not regulating with any vision. There are some 4000 to 5000 public passenger vehicles terminating in Montego bay daily, but the terminal centre does not even have the capacity for 700 units. The failure of the authorities to establish adequate facilities and control the influx of unregulated or robot taxis in the system have resulted in parking violations and a continuous cat and mouse game with the Police and Transport Authority officers. This fuels allegations of corruption against members of both state entities, who are seen as enablers of the chaos on the roadway. The facilities provided are woefully inadequate based on the number of vehicles operating in the parish and the enforcement is weak. The routes currently terminate anywhere in the city and unless we have a proper transportation system it will never be solved.” Deon Chance, President St. James Taxi Association.
According to the Vision 2030 Jamaica – National Development Plan additional transport centres are planned for other areas of the island, although these are not directly under the Ministry’s portfolio. The Urban Development Corporation (UDC) is spearheading plans for a Transport centre in Downtown Kingston. Significantly, there are also proposals by Local Government Authorities to construct municipal transportation centres in areas such as Spaldings, Clarendon and Darliston, Westmoreland.
4. Professionalization of the sector: Making public transportation more acceptable as a viable career choice and helping younger people make a success of the public transport trade is key to NTAG’s vison for 2030. Supporting the development of new ideas, and celebrating achievements by Transporters is also crucial to this development.
“I see a public transportation system where the players in the industry will understand that this is not just a means to ‘eat a food’. It is a business that we are delivering and we must be able to provide the highest standard of public transportation.”
Willard Hylton Managing Director Transport Authority
5. Routes: NTAG’s view is that while routes will continue to be determined by the Transport Authority based on national population requirements, entrepreneurs and investors will be able to apply for other routes they would like to operate on. Routes should not be exclusive, allowing more than one company to operate on the route. This allows for healthy competition and importantly provides the public with real choice in transportation services islandwide.
7. Fare Structure: To ensure an open free market with fares, NTAG believes operators should offer clearly differentiated services so as not to charge the same fare on the same route. Fares must be noticeable and distinctly different.
Different route prices will be encouraged by NTAG, encouraging investors to establish and operate differentiated services in support of price differences. This will allow the consumer to have choices and for operators to compete on service and customer satisfaction.
Importantly NTAG sees the system of differenced route prices as a self-check mechanism that will encourage competition and discourage price fixing and collusion in price setting.
8. Application for routes:
Taxi Associations: There is a widespread view within the sector that the vast majority of the current taxi associations are not delivering the expected value and type of services intended.
The Transport Authority engages and uses the over 30 route taxi associations islandwide to help manage the annual renewal and application for new operating road licences. The Associations as member organsions are to also provide other member services and benefits, which drivers and conductors claims many do not do.
As such NTAG is proposing that the current association system be replaced to one using technology and registered limited liability companies, with board-based ownerships in the form of shareholdings from its members.
Transport Authority will therefore monitor and regulate the sector through Registered Limited Liability Companies and would allow for applications to be submitted and processed online digitally.
Registered Limited Liability Companies will be able to apply to the Transport Authority for operators licenses for Passenger Services only or Passenger and Courier Services, to be used and deployed as its business model and plan dictates.
Individual Owners, Operators and investors not operating as a registered company will continue to apply to the Transport Authority for individual operator’s license for Passenger Services only or Passenger and Courier Services. This can either be submitted and processed online digitally on an individual basis or through a registered limited liability company.
These individual Owners, Operators, and investors with a valid license in hand can now choose to work with a registered limited liability company that best suits their requirements. Terms and conditions to be agreed between the parties.
Next Part 5: Drivers And Conductors – Inability To Attract And Retain Suitable and Qualified Drivers And Conductors.
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Part 3: The Key Stakeholders Required To Make This Plan Work, The Jamaican People- To Achieve Vision 2030 For The Public Transportation Sector A New Business Model Is Needed Now…NTAG
Part 3: The Key Stakeholders Required To Make This Plan Work
The Jamaican People
The vast majority of the public will tell you that they are dissatisfied with the level of public transportation customer service and experience they receive, and for NTAG this is also a problem that must be fixed if the sector is to grow and fulfil its mandate to the Jamaican people.
“We need to quit treating transportation subsidies as a drain on public funds and instead view them as strategic investments that generate huge social, economic, and environmental returns. If one public service [could] be said to symbolise the frustration driving social unrest, it [was] public transportation”.
Alberto Moreno, former president of the Inter-American Development Bank (IDB)
This public dissatisfaction with the low and poor customer experience in the public transportation sector has led NTAG to establish a clear position and mandate that “Every Jamaican Deserves To Have Access To A Modern Tech Driven Public Transportation Service That Is Safe, Comfortable, Cost Effective, Efficient And Reliable.”
“The more efficient the public transportation becomes is the more efficient workers become; they reach work on time. They do not have to spend two hours or maybe 30 minutes in traffic”
Dr. Lawrence Nicholson The University Of The West Indies
The 2030 Vision as envisioned by NTAG embraces three key elements:
Technology: will significantly improve efficiency within the sector and allow for a more seamless distribution and access to information and service via the smartphone.
A Cashless System: will provide higher levels of security for the Transporters, who are now forced to carry around large wads of cash on a daily basis, making them targets for criminals. This will also allow passengers and customers to conduct transactions via their smartphones and reduce the need to walk with cash.
Scheduled Times: will allow passengers and customers to better plan their departure and arrival times for both business and personal matters with No More Squeeze Up, and On Time Departures. On the courier side this will allow for increased timely and organised delivery schedules.
A week after the Jamaica Urban Transit Company (JUTC) announced that it had repaired nearly 100 buses for the new academic year, commuters said they are still baffled with the lengthy wait times to get to their destinations.
“I have only seen two buses in the 30 minutes and they are coming packed. I brought my daughter to school this morning from 5:00, on the number 16 in Portmore. I am trying to go back home but no JUTC. Anything I can get right now, I will take,”
“A bus should leave town about 7:15 am but I am not seeing that bus. Normally, what I have to do is come out earlier and catch the 6:30 bus because after that you don’t get another bus until 8:30 am. This has been the case from summer — but it is worse now,”
“About an hour now, no bus nuh come. Every week is the same problem. From it reach certain hours — 9:00 am, 10:00 am, or even 1:00 pm, yuh suffer fi get a bus. Sometimes when mi out here mi haffi turn round back, cyaan get no bus and cancel my plans because the time pass; mi cyaan go again,”
The 2030 Vision is also supported by the following 7 Minimum Service Levels For The Customer And Passengers.
1. Availability:
In this world of 24-7 activity, the acceptable availability standard has been raised.
Customers expect information and service at their fingertips; when they need it and
where they need it.
2. Courtesy:
In creating amazing customer experiences, courtesy goes far beyond having nice manners and smiling. There is courtesy in the way our Transporters behave that yes, includes the observable traits of pleasant tone, nice words, welcoming and friendly
body language, high levels of personal hygiene, dress code and appearance and importantly a clean vehicle among other things.
3. Consistency:
Customers appreciate consistency in service and services. This poses a challenge
when Transporters go out of their way or bend a policy to please a customer.
4. Accuracy:
Providing and communicating correct information to customers is imperative to deliver at least the minimum level of service. Customers and passengers will make decisions and act upon the information they receive, and receiving inaccurate information could potentially make a customer go down a very wrong and inefficient
path…leading to poor customer experiences.
5. Responsiveness:
Readily reacting to customers and passengers in a timely manner to their needs or requests, and consistently communicating progress of this request is very important to them. No one wants their requests to go into an abyss, void of communication or acknowledgement.
6. Efficiency:
The efficient use of resources whether it be human, financial, time, etc. will inevitably lead to delivering great service to our customers’ and passengers.
7. Safety and Security:
Peace of mind is very important to our customers’ and passengers, and so they expect at all times to Experience Safe, Comfortable, Economical, Efficient & Reliable Service.
NTAG will ensure that all Transporters go through an Introduction and Familiarization session before joining the team as a Transporter. The sessions cover the role and responsibility of the Transporter to the passenger, how to use the Smartphone and Application, customer service and expectations, and basic business skills among other things. All relevant documents must be submitted and be approved by NTAG in order to make the Driver Active as a Transporter.
Next Part 4: The Key Stakeholders Required To Make This Plan Work – Investors and Owners
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