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!
Businessuite Women
Kelli-Dawn Hamilton Appointed CEO of the Jamaica Special Economic Zone Authority (JSEZA).
Kelli-Dawn Hamilton is the new Chief Executive Officer (CEO) of the Jamaica Special Economic Zone Authority (JSEZA).
Mrs. Hamilton, who assumed office on October 26, will lead the entity into its next phase of growth and development.
She served as the Authority’s most recent Interim CEO.
Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, in his congratulatory statement, said that Mrs. Hamilton will “bring significant experience to the role”.
He noted that she has an acute sense of leadership that will propel Jamaica’s export agenda and attract foreign investments to support the country’s economic growth.
Chairman of the Authority, Chirstopher Levy, expressed his confidence in the new CEO, stating that “we are thrilled to welcome Mrs. Hamilton back to the Jamaica Special Economic Zone Authority”.
“Her proven leadership and strategic insights will undoubtedly accelerate our growth trajectory and reinforce our commitment to delivering exceptional value to our customers and stakeholder,” Chairman of the Authority, Chirstopher Levy
Mrs. Hamilton said she is happy to be rejoining the JSEZA family and looks forward to leveraging the company’s strong foundation and talented workforce to drive innovation and sustainable growth for Jamaica’s special economic zones.
“Together, we will continue to create and build upon the company’s legacy of excellence and reinforce our position as a strategic hub for trade and commerce in the Caribbean Region,” she said.
Mrs. Hamilton has a proven track record and expertise in trade policy, communications and business development and brings to the table a wealth of experience in business advocacy and client relationships, having previously served in various technical and leadership roles at the Jamaica Promotions Corporation (JAMPRO), First Global Bank and the Airports Authority of Jamaica (AAJ).
Her strategic vision, strong leadership abilities, and extensive industry knowledge make her an ideal fit to steer the JSEZA towards continued success and global expansion.
Mrs. Hamilton holds a Master of Science Degree in Comparative Politics and Political Theory from the University of the West Indies, Mona, and has demonstrated her commitment to excellence and leadership throughout her career.
The JSEZA is an agency under the Ministry of Industry, Investment and Commerce charged with driving economic growth through the establishment of special economic zones.
Since its inception in 2016, the company has been at the forefront of foreign and local direct investment attraction within Jamaica’s special economic zone regime.
By:
Jamaica’s transportation sector is poised for a digital revolution as local bus and taxi operators eagerly anticipate integrating the nation’s own central bank digital currency (CBDC), known as Jam-Dex.
Jamaica is actively working towards enabling CBDC services on the mobile phones of the general public.
Jamaica’s transportation sector is poised for a digital revolution as local bus and taxi operators eagerly anticipate integrating the nation’s own central bank digital currency (CBDC), known as Jam-Dex. The introduction of Jam-Dex by the Central Bank of Jamaica in 2022 was marked by an airdrop event aimed at accelerating its widespread adoption. Recent developments reveal that Aldo Antonio, co-founder and acting executive chairman of the National Transporters Alliance Group (NTAG), is actively championing the integration of Jam-Dex within the transport community.
Although Jam-Dex holds the potential to streamline operations, reduce costs, and enhance security for the transportation sector, local reports suggest that the adoption rate among vendors and consumers has been sluggish, causing some hesitation among bus and taxi drivers. Nevertheless, Antonio remains resolutely optimistic about the prospects:
“I see Jam-Dex as something that would be significantly transformative for the public transportation sector and needs to be embraced.”
To ensure the viability of Jam-Dex, Antonio emphasizes the necessity of cultivating a larger customer base willing to embrace the CBDC. The lack of customer interest could discourage merchants, ultimately leading to the abandonment of the digital currency initiative.
Antonio identifies food and transportation as the two key sectors that could drive the everyday usage of Jam-Dex. He elaborates on this concept, stating:
“If we can get them (Jamaicans) moving and paying for transportation using Jam-Dex on a daily basis, it increases the rate at which we can get the digital currency into people’s hands.”
Jamaica to enable CBDC on mobile phones
In addition to enhancing convenience for customers, the widespread adoption of a central bank digital currency also alleviates concerns related to the security risks associated with carrying physical cash or handling exact change. As part of its strategy, Jamaica is actively working towards enabling CBDC services on the mobile phones of the general public. Antonio envisions that, with proper training and implementation, the transportation sector could potentially begin accepting Jam-Dex payments by January, if not earlier.
Approximately 25,000 to 30,000 transportation owners are present in Jamaica, and their participation could significantly expand the reach of Jam-Dex beyond the existing user base of 10,000 vendors and 200,000 individuals who use the CBDC through the Lynk digital wallet.
https://www.cryptopolitan.com/jamaicas-taxi-drivers-embrace-crypto/
Original Source article BY DASHAN HENDRICKS Business content manager hendricksd@jamaicaobserver.com
Jamaica’s central bank digital currency, Jam-Dex, is set to revolutionize how people pay for public transportation in the island nation. Local bus and taxi operators are eager to integrate Jam-Dex into their operations, as it offers convenience, security, and cost-efficiency.
Jam-Dex: Jamaica’s CBDC to Transform the Transportation Sector
Jam-Dex is the name of Jamaica’s central bank digital currency (CBDC), launched by the Bank of Jamaica in 2022. It is a digital form of legal tender that can be used to pay for goods and services, just like cash.
Jam-Dex is not a cryptocurrency, as it is issued and backed by the central bank and does not rely on a decentralized network of computers.
It can be accessed through a digital wallet app called Lynk, which allows users to send and receive Jam-Dex using their mobile phones.
Users can also convert Jam-Dex to cash or vice versa at authorized agents or deposit-taking institutions.
Jam-Dex transactions are fast, secure, and transparent, as they are recorded on a ledger maintained by the central bank.
Jam-Dex: Why is it important for the transportation sector?
The transportation sector is one of the key sectors that could benefit from adopting Jam-Dex, as it could streamline operations, reduce costs, and enhance security for drivers and passengers.
Aldo Antonio, co-founder and acting executive chairman of the National Transporters Alliance Group (NTAG), is actively championing the integration of Jam-Dex within the transport community.
“I see Jam-Dex as something that would be significantly transformative for the public transportation sector and needs to be embraced.”
Antonio believes that Jam-Dex could increase customer convenience and satisfaction, as well as reduce the risks associated with carrying physical cash or handling exact change. He also thinks that J
am-Dex could attract more customers to use public transportation, as it offers a modern and innovative way of paying for their rides.
“If we can get them (Jamaicans) moving and paying for transportation using Jam-Dex on a daily basis, it increases the rate at which we can get the digital currency into people’s hands.”
Challenges and Opportunities
Despite the potential benefits of Jam-Dex, its adoption rate among vendors and consumers has been sluggish, causing some hesitation among bus and taxi drivers.
According to local reports, only 10,000 vendors and 200,000 individuals use Jam-Dex through the Lynk app, which is far below the expected target of one million users by the end of 2023.
Antonio acknowledges that there are some challenges to overcome before Jam-Dex can become widely used in the transportation sector.
He cites the need for more education and awareness campaigns and incentives and rewards for drivers and passengers who use Jam-Dex.
He also emphasizes the importance of cultivating a larger customer base willing to embrace the CBDC, as the lack of customer interest could discourage merchants from accepting Jam-Dex.
However, Antonio remains optimistic about the future prospects of Jam-Dex, as he envisions that with proper training and implementation, the transportation sector could potentially begin accepting Jam-Dex payments by January 2024, if not earlier.
He also estimates that there are approximately 25,000 to 30,000 transportation owners in Jamaica whose participation could significantly expand the reach of Jam-Dex beyond the existing user base.
Antonio hopes that Jam-Dex will become a catalyst for digital transformation in Jamaica, as well as a source of pride and identity for Jamaicans.
He said:
“Jam-Dex is something that we should be proud of as Jamaicans because it’s our own digital currency.”
by Victory Emmanuel
Original Source article BY DASHAN HENDRICKS Business content manager hendricksd@jamaicaobserver.com
Logistics & Transportation
Transport Operators In Jamaica Say They Are Ready To Embrace BOJ Central Bank Digital Currency Jam-Dex
Transport operators say they are ready to embrace the Bank of Jamaica’s (BOJ) central bank digital currency Jam-Dex, and could do so in time for the new year if things fall in place quickly.
Aldo Antonio, co-founder and acting executive chairman of the National Transporters Alliance Group (NTAG), said he has been lobbying amongst transport owners to embrace Jam-Dex as a means of improving the efficiency of their operation and to reduce costs and security risks.
“I see Jam-Dex as something that would be significantly transformative for the public transportation sector and needs to be embraced,” Antonio told the Jamaica Observer.
But he said he understands if at the moment, his fellow transportation owners are not gung-ho, especially with the low levels of participation of both vendors and consumers using Jam-Dex.
“One of the things that we have recognised at NTAG is that you have to have sufficient numbers of people using Jam-Dex to make it feasible. So, no matter how many merchants there are, if there aren’t sufficient customers using it, then the merchants will become discouraged overtime and abandon it. It is a system which has to be pushed on both ends in an aggressive way because even if you have Jam-Dex through one of the wallets on your phone, if you don’t have enough merchants accepting it, it doesn’t make sense.”
He said he believes getting transport owners to use Jam-Dex as an acceptable means of paying bus and taxi fares will go a far way in helping to proliferate the use of the digital currency.
“We recognise that there are two things that Jamaican people do transaction with every day, that is food and transportation. So, if we can get them moving and paying for transportation using Jam-Dex on a daily basis, it increases the rate at which we can get the digital currency into people’s hands.”
Aldo Antonio, acting executive chairman of the National Transporters Alliance Group, is pushing to have his fellow bus and taxi owners and operators embrace Jam-Dex as a means of payment for rides.
“On the other hand, the bus and taxi operators, they have a major, major challenge on a daily basis, accounting for cash and we know how expensive it is to collect cash, store cash and pay cash to the bank. It is a time-consuming and costly process. With Jam-Dex and the digital wallets, the money goes into your account immediately so you can eliminate those kind of cost factors to worry about.”
He said it will also help to eliminate the worry transport operators have about making change for passengers.
“In most instances, for example, especially in the rural areas, the average fare is like $120 and in most instances, the operators would have been walking around with sufficient coins to make change after a passenger pays the fare or he has to collect a lot of these $20 coins and store them in the car on a daily basis. And so, what you will find sometimes is that they just can’t bother.”
For transport owners he said, leakages would be plugged.
Still, as he pushes to get his fellow transport owners to embrace use of Jam-Dex in their daily operation, Antonio said he understands that some are reticent.
“The obvious reluctance stems from them not seeing it available for them to use for transactions in their daily lives. So, for them, it’s something that people are talking about but they haven’t yet seen it around them. From that perspective, there is a sense of ambivalence, because they don’t see it around them.”
He said if there is sufficient take-up within the sector, passengers would be able to pay fares with Jam-Dex pretty soon.
“It is just a matter of having the facility on their phones. That can be done within the space of about four weeks. With that happening and training happening, then the sector could be in a position by January, if not before, to be able to accept Jam-Dex type payments.”
Antonio estimates that there are 25,000 to 30,000 transport owners in the country who ferry hundreds of thousands of people on a daily basis. Currently, Jam-Dex is available amongst 10,000 vendors with 200,000 people having access to the digital currency through the digital wallet Lynk, which is provided by the NCB Financial Group. JN Bank is expected to launch its JN Pay digital wallet before the end of the year and a third financial institution is now testing its digital wallet with the central bank. The central bank’s data show that about $257 million in digital currency is in circulation.
BOJ Governor Richard Byles last Monday expressed disappointment with the roll-out of the digital currency to date, saying he expected it to be more widespread at this stage that it is. Byles said deposit-taking institutions say it cost upwards of US$500,000 to develop the digital wallets to use Jam-Dex, suggesting that the cost has slowed progress in getting the digital currency out in the hands of consumers.
However, for Antonio, the cost of moving, securing and storing physical currency would make such an investment worthwhile if taxi owners and operators get onboard.
“Now you are not going to get everybody in the first go, but as more and more drivers accept it and get more comfortable with it, then you will find that people will gradually move towards it.”
“The sector has been discussing cashless because we recognise the benefits of it, but unless there are enough passengers to use it, they are not going to be too anxious to move towards it.”
Antonio suggests that with the pending fare increase, there is an opportunity for the Government to incentivise people to use Jam-Dex by giving them the digital currency as a credit of about $1,000 to subsidise the fare increase at the initial stage, especially, going into the Christmas period.
“We know, for example, that NCB Financial Group through Lynk has been spending millions of dollars to get people to use the digital currency and now has 10,000 merchants and 200,000 customers. Those numbers really tell you what it will cost to have national adoption and the longer it takes to be adopted is the more reluctant Jamaican population is going to be. We have to make a big splash like a quick sprint. The longer we drag it out, the worse it’s going to get. We need a massive injection to get people onboard.”
“This will also increase the number of financial institutions wanting to offer a digital wallet because their reluctance at this point is that there are not enough people out there to use it to facilitate the investments that are needed to get it going,” he opined.
SOURCE DASHAN HENDRICKS Business content manager hendricksd@jamaicaobserver.com
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