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  • Writer's pictureZiggurat Realestatecorp

The road to a modern transportation system

The ongoing dispute regarding the modernization of the country's public transport of choice — the iconic jeepney — is a clear sign of the rapidly changing face of transportation in a digital, climate-challenged world.

While there is a debate among stakeholders on how to go about this modernization, it is safe to say there is widespread agreement over the need to bring jeepneys up to par with relevant environmental and safety standards.

The urgency to act on climate change and the technological advances that have reshaped the way people move are prompting nations around the world to rethink their transportation systems. In the Philippines, transitioning jeepneys to electric variants is just a preliminary step to significantly improving transport efficiencies and effectiveness.

The Deloitte Centre for Government Insights recently looked at similar trends that are geared towards making transportation resilient and future ready.

Creating sustainable funding mechanisms

Many existing funding models for transportation are based on taxes levied per gallon or liter on fossil fuels. What will happen to these revenue streams when more fuel-efficient vehicles and electric vehicles (EVs) begin to outnumber vintage gas-guzzlers? Some countries are already finding out. Australia has lost about $1.5 billion in federal revenue due to the 30-percent decline in fuel excise tax collections on petrol in the 12 years since 2009.

An alternative to this approach is to tax commuters based on actual road usage. Road user charging (RUC) systems calculate tax owed for each driver, which will likely mean higher administrative and equipment costs compared to the traditional gas tax.

One phased-in approach for administrators to consider is New Zealand's system, where the RUC applies only to heavy vehicles and those that run on untaxed fuel such as diesel. Concerned taxpayers pay in advance in 1,000-kilometer units for an RUC license.

Once they have travelled the distance covered by their license, which is measured by a government-approved hubodometer, they will have to pay again to renew the license and continue using roadways.

A generational shift in mobility

Under the Philippines' Electric Vehicle Industry Development Act, the Department of Energy is looking to roll out 2.45 million EVs in the next five years. Convincing consumers to abandon their internal combustion engine-based vehicles in favor of these rechargeable ones, however, will take more than a fancy showroom.

Based on Deloitte's 2023 Global Automotive Consumer Study, there is an increasing number of consumers worldwide who plan to buy an EV in the next three years. In Southeast Asia, for example, 16 percent in the Philippines, 19 percent in Indonesia, and 48 percent in Thailand intend to purchase an EV. But across these three countries, the number one reason stopping consumers from making the switch is the lack of public EV charging infrastructure.

Building a charging network that resembles today's ubiquitous gas stations may be the biggest short-term hurdle to the global shift to EVs. Concerned stakeholders need to ask themselves questions such as: How many public charging stations should be installed? How should charging be priced? What effect will charging have on the grid during peak consumption hours?

Another challenge that comes with the rise of EVs is the availability of workforce trained to maintain and repair these vehicles and the charging infrastructure. Plans need to be put in place to retrain and reskill workers who can reliably address consumers' issues wherever they may be located.

Inclusive, equitable modernization

The initial lockdowns of March 2020 threw into stark relief the inequality hounding our society. Essential workers who are often low-income earners such as grocery clerks, warehouse workers, and cleaners still had to commute to show up for work every day even as most Filipinos sheltered in their homes. That period of uncertainty served to highlight the important role that public transport agencies play in addressing some of these inequalities.

To put in place an inclusive, equitable modernization plan, it is critical that government agencies consult with as many stakeholders as possible. People with disabilities and citizens living in remote, rural areas, for example, bring a unique voice to the table. Listening to them will help ensure that the new transportation system is responsive to the actual needs of the commuting public as a whole. In California, for example, the State Transportation Agency established an equity index to help measure the impact of its transportation infrastructure plans on various demographic groups.

Early last month, local transport groups held what was supposed to be a week-long transport strike to protest the jeepney modernization plan that they said would lead to a loss of livelihood for thousands of drivers and operators. Thankfully, the government immediately began a dialogue to cut the strike short.

One of the commitments that came out of that meeting is that concerned transportation agencies will hold more consultations with jeepney drivers, operators, and the commuting public to hear their concerns about the modernization plan.

This is a welcome move in making sure that, on the road to a more sustainable, efficient Philippine transport system, no one is left behind.

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