IDEAS home Printed from https://ideas.repec.org/p/phd/dpaper/dp_2017-10.html
   My bibliography  Save this paper

Competition for the Market: A Policy Framework for Improving Bus Operation along EDSA

Author

Listed:
  • Llanto, Gilberto M.
  • Gerochi, Hope A.

Abstract

The EDSA bus market is fiercely competitive. In theory, allowing competition among many bus operators is expected to result in cost-effective and reliable transport services, and efficient use of roads. However, in reality, the outcomes are far different: daylong traffic jam and poor bus service along Metro Manila's most important road artery. This paper examined an option proposed by some quarters that consolidating bus operation along EDSA will solve road congestion. It was thought that having fewer but bigger bus operators will be the solution. Based on a review of country experiences, this paper argues that one way to address road congestion and other market failures in the bus markets is to shift the regulatory framework for bus transport services from the current competition "in the market" (the status quo) toward competition "for the market". Bus consolidation is an initial step to relieve the roads of traffic congestion, but it is not a sufficient condition for sustainable quality bus service. However, casting bus consolidation within a competition for the market regulatory framework presents a better and more workable option for improving bus transport services in EDSA. The alternative regulatory approach called "competition for the market framework" provides a stronger incentive for bus operators to consolidate because a competitive tendering mechanism is used to select an optimum number of formal bus transport operators that will serve the market. Government takes more control of critical aspects of bus services (design of the bus network, quality standards, frequency, among others), which, thus, provide an opportunity to address the market failures that are inherent in liberalized urban bus markets. The government via its pipeline of bus rapid-transit (BRT) projects--including one being prepared for EDSA--seems to lean in favor of this framework. To be effective and to encourage the application of this new framework also to non-BRT corridors, complementary reforms have to be implemented in parallel and these would include improving the capacity of regulatory agencies, institutions (rules of the game), procurement, contract monitoring, and traffic management.

Suggested Citation

  • Llanto, Gilberto M. & Gerochi, Hope A., 2017. "Competition for the Market: A Policy Framework for Improving Bus Operation along EDSA," Discussion Papers DP 2017-10, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2017-10
    as

    Download full text from publisher

    File URL: https://serp-p.pids.gov.ph/serp-p/download.php?d=5797&s=3
    Download Restriction: no

    References listed on IDEAS

    as
    1. Briones, Roehlano M. & Gundaya, Debbie M. & Domingo, Sonny N., 2015. "Diagnostic Report on the Bus Transport Sector," Discussion Papers DP 2015-02, Philippine Institute for Development Studies.
    2. Juan Carlos Echeverry & Ana María Ibáñez & Andrés Moya & Luis Carlos Hillón, 2005. "The Economics of Transmilenio, a Mass Transit System for Bogotá," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 151-196, January.
    3. World Bank, 2002. "Cities on the Move : A World Bank Urban Transport Strategy Review," World Bank Publications, The World Bank, number 15232, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Philippines; urban bus market; market failures; consolidation; competition-for-the-market; competitive tendering; bus-rapid-transit system (BRTS); competition-in-the market; bus transport; traffic management; bus regulation; urban transport;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:phd:dpaper:dp_2017-10. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aniceto Orbeta). General contact details of provider: http://edirc.repec.org/data/pidgvph.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.