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
Business Insights
Gig Economy Players Looking To External Partnerships, As They Seek New Avenues Of Growth.
“If you did a bad job with the delivery, all the other benefits are not that attractive,” he said. “The core value proposition is: Did you have a great experience across selection, quality and affordability using the underlying product? Are you using us for restaurants and other categories? That is what is going to differentiate us.”
DoorDash Inc. Chief Executive Officer Tony Xu has spent the past 11 years building the company that now owns more than two-thirds of the food delivery market in the US, far exceeding Uber Eats (26%) and Grubhub (6%). The app also has a loyal user base, with more than half of DoorDash users owning a DashPass subscription, according to YipitData. More importantly, for investors, the company finally became profitable from its operations in the third quarter this year.
But Xu says building out the product is only 80% of the work to keep the company successful. The rest will come from external partnerships, a strategy that his gig economy peers, including Uber Technologies Inc., the biggest company in the industry, have also increasingly leaned on as they seek new avenues of growth.
The latest effort to boost paid subscriptions is DoorDash’s partnership with Lyft Inc. announced last month. The tie-up is an example of two brands tapping into each other’s customer base to boost engagement without having to merge or make an acquisition. Uber has a restaurant-delivery partnership with Instacart, while Amazon.com Inc’s Prime membership offers a Grubhub subscription perk.
After spending about a decade offering habit-forming services —whether it’s hopping into a stranger’s car instead of hailing a taxi, or opening a door to someone who picked up a restaurant meal and a bottle of wine from the deli down the block — these companies now have a clearer understanding of the competitive landscape. Even as diners returned to restaurants in the post-pandemic era, take-out has become such an ingrained habit that companies know getting customers into a subscription will mean more dollars and time spent on their apps.
So now it’s about finding partners strategically to build a larger system and lock in a more diverse pool of customers. Lyft CEO David Risher had earlier this year rejected the idea of his company offering food delivery on its own because that would keep people at home and exacerbate the loneliness epidemic. But he sees value in joining with the largest food delivery app because it gives millions of DoorDash members “a reason to prefer Lyft” for their rides and provides Lyft a way to compete better with Uber, which offers rideshare and delivery.
For DoorDash, which launched its membership in 2018, three years earlier than Uber, the deal offers customers Lyft discounts in addition to the existing benefit of free access to the ad-tier version of the Max streaming service. DoorDash is also getting new customers through an expanded partnership that offers certain Chase card holders a free subscription and discounted orders. These external perks have helped it maintain a lead on user penetration over the Uber One subscription. (As of September, 42% of Uber Eats users were subscribers, per YipitData. That percentage is lower if all users including rideshare customers are counted.)
Keeping subscribers isn’t easy, however. According to Bloomberg Second Measure data, only 35% of annual DashPass subscribers who made their first membership purchase in September 2023 were retained after a year. Annual subscriptions to Instacart+ show similar numbers with a 32% retention rate. (These figures do not include free trials and free subscriptions through credit card or other partnerships.) The real challenge will be finding creative ways to retain paying users, or at least keep them in the ecosystem so it’s not as costly to acquire them again.
DoorDash Chief Financial Officer Ravi Inukonda said the data doesn’t reflect how membership really works. The company has increased the flexibility it gives to accommodate consumers’ lifestyles with monthly, annual and student plans. “If you’re traveling with young kids, or you’re traveling in the summer and you want to put the program on hold, that’s completely OK with us,” he said.
These people who churn off the membership program are not leaving DoorDash, Inukonda said. And the company is confident in earning their membership back through offering more benefits in the future, as well as through the core product delivery service, which includes not just restaurant takeout, but also alcohol, grocery, makeup and even mattress deliveries.
“If you did a bad job with the delivery, all the other benefits are not that attractive,” he said. “The core value proposition is: Did you have a great experience across selection, quality and affordability using the underlying product? Are you using us for restaurants and other categories? That is what is going to differentiate us.”
After all, partners won’t matter if the main product isn’t drawing members. Case in point: Grubhub hasn’t been able to reverse a streak of losses in orders and users, ceding market share to DoorDash and Uber even as it has been offering free food delivery to hundreds of millions of Amazon Prime members since 2022. That is one of the reasons parent company Just Eat Takeaway.com NV announced this week it will be selling Grubhub to startup Wonder Group for $650 million, a steep discount to the $7.3 billion price tag at its peak during the pandemic.—Natalie Lung
Businessuite Markets
Future Energy Source Reporting Best Quarter To Date On Both Topline And Bottom Line Financials
Jeremy Barnes Chief Executive Officer of Future Energy Source Company Limited (“FESCO” or the “Company”) has released the Company’s unaudited first (1st) quarter financial statements as at June 30, 2024 for the financial year April 1, 2024 to March 31, 2025.
Executive Summary
We are pleased to report that the Company has achieved its best quarter to date as it relates to gross profit (J$412.3 million, up 38.71% or J$115.1 million), operating profit (EBIT) (J$185.8 million, up 16.28 % from J$159.8 million), and earnings before interest, taxes, depreciation and amortization (EBITDA) (J$250.2 million up 26.56% or J$52.5 million). Net profit for the quarter was also strong totalling $148.4 million up 28.19% or J$32.6 million.
For the quarter, the Company was able to achieve its main targets which were to:
1. Increase brand awareness for FESGAS™ as well as maintain and enhance its market share (measured in litres of LPG) for both domestic and commercial usage;
2. Increase its company-operated service station footprint (FESCO Hayes) and increase overall fuel sales measured in litres;
3. Increase profitability, specifically as it relates to operating profit (EBIT), operating cash flow (EBITDA) and net profit;
4. Acquire additional service station and LPG assets to enhance its retail and commercial distribution going forward; and
5. Establish additional filling plants to further enhance its LPG distribution.
The Company’s quarterly performance reflects an increase in fuel sales in litres. The network of FESCO branded service stations remains twenty-one (21) island-wide; an addition of a DOCO service station, FESCO Hayes, and a separation from the network of a DODO service station in Whithorn, Westmoreland.
Financial Highlights:
For the quarter ended June 30, 2024, FESCO recorded Turnover/Revenues of J$7,780.0 million which reflects an 18.56% or J$1,217.8 million year over year increase. Several factors affect revenue/turnover with the supply price of fuel being a major component.
For the quarter, fuel prices increased slightly for gasoline (87 Octane: J$6.08 and 90 Octane J$9.12)1 and remained relatively flat for both ADO and ULSD (ADO +J$1.06 and USLD -J$0.91). FESCO has no control over the supply price of fuel and, instead, focuses more on quantity of fuel sold and gross profit.
Accordingly, FESCO’s year over year growth in Turnover reflects significant increase in litres of fuel sold (all fuels including LPG).
Operating Expenses of J$226.5 million, for the quarter, is up J$89.9 million versus last year or 65.83%.
This expansion of expenses directly reflects the expanded:
1. Operating locations including the additions of: FESCO Kitson Town, FESCO Hayes, FESGAS Bernard Lodge and FESGAS Naggo Head;
2. Asset base which includes increased operating LPG and service station assets;
3. Operational scope (which now includes increased retailing and manufacturing);
4. Early stage new business costs including but not limited to:
a. business acquisition;
b. property acquisition and development costs; and
c. business integration costs.
For the quarter, staff costs of J$75.0 million, up J$25.7 million from J$49.3 million last year, reflects the expansion of our staff complement and is consistent and reflective of our expanded operations (company operated locations and range of operations).
These costs are relatively efficient as they are only 33.1% of overall expenditure (2024: 33.1% vs 2023: 36.1%) and only 18.2% of gross profit (2024: 18.2% vs 2023: 16.6%).
Security expense totalling J$10.3 million versus $6.6 million last year reflects additional operating locations and increased security rates. Motor vehicle expenses of J$11.1 million versus J$1.5 million last year reflects a fleet size growth to facilitate, in the main, haulage and distribution of LPG.
Depreciation expense of J$56.8 million reflects Plant Property and Equipment (PPE) expansion of both LPG and service station assets. The Company’s LPG operation is capital intensive as it relates to its fixed asset requirements to establish and fulfil the business’ services and operation. Accordingly, depreciation and interest expense will in the forming period outweigh its medium and long term “weight” relative to gross profit exemplified by depreciation for the quarter totalling J$56.8 million versus J$37.0 million last year.
It is important to note that operating expenses relative to gross profit is trending downwards. For the quarter, operating expenses were 54.9% of gross profits compared to 57.0% of the entire Audited financial year ended March 2024, and Operating expenses excluding depreciation was 41.2% of gross profits compared to 44.5% for the entire Audited year ended March 2024.
In summary, staff costs, bank charges, advertising, and asset-based expenses including but not limited to depreciation, insurance, and security continue to be FESCO’s main expense items. FESCO’s operations continue to be efficient, represented by our total operating expenses being approximately 54.9% of gross profit. Notably, for this stage of LPG business development, the Company’s total operating expenses excluding depreciation is just 41.2% of gross profits. The Company’s expense profile is changing and will reflect its expanded and evolving range of operations. The Company’s expenditure and revenue targets are in line with its internal forecast and mix of established and early stage business expenses.
A look ahead
FESCO continues to monitor economic factors such as moderating inflationary forces, indicative expectations that interest rates will reduce in the short to medium term, and the near full employment in many sectors of the economy.
The Company is also watchful of hurricane Beryl recovery efforts in southern and western parishes and the resilient and expanding tourism sector, among other factors affecting consumer spending.
The Company is navigating industry-related margin contractionary forces and consolidation within the industry.
The Company is selective in its allocation of investment capital but remains mindful of opportunities for growth and further investment. Internal or self-funding via profit generation, profit retention, at this time, has proven to be the most efficient and cost-effective source of capital to fund growth.
The Company has commenced construction of its service station on Spanish Town Road, FESCO Oval. FESCO Oval will be a company-owned company-operated service station (COCO) for increase retail presence within the Kingston and St Andrew (KSA) region. Completion will take approximately fifteen (15) months and
we anticipate opening in the month of September 2025.
The development will represent the Company’s commitment to community and showcase the creativity and mindfulness of the Company’s Jamaican project team, which we believe, generally, exemplifies our tagline and motto, “Proudly Jamaican”.
Finally, the Company will continue to make investments in real assets and equipment to support expanding its service station businesses and network, its industrial client base, and LPG business.
For More Information CLICK HERE
Businessuite News24
Experience Premium Travel with JUTA Express Powered by InterMetroOne – Corporate Feature
Traveling across Jamaica has just been elevated to a new level of comfort, convenience, and safety with the introduction of JUTA Express powered by InterMetroOne. This premium bus and coach service, available through the InterMetroOne app, is set to revolutionize travel for both visitors to the island and locals alike, offering a seamless and luxurious way to navigate Jamaica’s main towns.
A Legacy of Excellence
The Jamaica Union of Travellers Association (J.U.T.A.) has been a cornerstone of Jamaican transportation since its inception in 1974. With chapters in major locations such as Mandeville, Portland, Montego Bay, Ocho Rios, Falmouth, Negril, and Lucea, J.U.T.A. boasts a fleet of over 6,500 vehicles, making it the largest transportation company in the Caribbean. Known for its superior customer service, safe and courteous operators, and exceptional staff, J.U.T.A. has set the standard in public transportation. Their commitment to excellence has earned them numerous awards and a sterling reputation among tourists, locals, and corporate clients alike.
Unmatched Comfort and Safety
At JUTA Express, powered by InterMetroOne, your safety and satisfaction are our top priorities. By partnering with J.U.T.A. we ensure that every journey is handled by professional and dedicated operators who are committed to your well-being. From the moment you board until you reach your destination, you can rest assured that we have your comfort and security covered.
Comprehensive Services
JUTA Express offers a broad range of services designed to meet the diverse needs of travelers. Whether you are commuting for work, heading to school, or embarking on a group tour, we have the perfect transportation solution for you. Our services include:
- Ground Transportation: Reliable and efficient travel across Jamaica’s main towns.
- Tourism Transportation: Seamless connections to and from major tourist destinations.
- Staff and Student Contracts: Dependable transport solutions for educational institutions and businesses.
- Group Tours and Fun Days: Enjoy organized and hassle-free excursions.
- Airport Transfers: Stress-free transport to and from Jamaica’s national airports.
- Conventions and Meetings: Coordinated travel for corporate events and large gatherings.
- Luxury Coach Buses: Accommodations for delayed flights and special occasions.
Book with Ease Using InterMetroOne
The InterMetroOne app makes booking your travel with JUTA Express simple and convenient. Available on both Google Play and the App Store, the app provides a user-friendly interface where you can plan and manage your trips with ease. With just a few taps, you can schedule rides, track your journey in real-time, and enjoy exclusive perks and rewards.
Why Choose JUTA Express Powered by InterMetroOne?
- Professional Service: Experience the best in Jamaican transportation with J.U.T.A.’s highly trained and courteous operators.
- Safety and Security: Travel with peace of mind, knowing that your well-being is our top priority.
- Comfort and Convenience: Enjoy spacious, air-conditioned buses with complimentary snacks and drinks.
- Seamless Integration: Book, track, and manage your trips effortlessly with the InterMetroOne app.
- Trusted Legacy: Benefit from J.U.T.A.’s decades of experience and award-winning service.
Join Us on a Journey of Excellence
Whether you are a visitor exploring the vibrant culture of Jamaica or a local navigating your daily commute, JUTA Express powered by InterMetroOne is your ideal travel companion. Download the InterMetroOne app today and discover a new standard of transportation that combines the reliability of J.U.T.A. with the innovative technology of InterMetroOne.
Experience the Difference. Travel with JUTA Express Powered by InterMetroOne. 
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