Mr Montague should proceed with caution
WE, LIKE Robert Montague, the transportation and mining minister, believe in the guiding hand of the market, but also appreciate that in some circumstances, it needs some directing. That is why, in the absence of a far more compelling case than he has so far offered, we are not convinced of the efficacy of his proposal for a free-for-all in the public transportation sector.
According to Minister Montague, the Transport Authority (TA), the regulatory agency for public transportation, has been “making criminals” out of persons who want to make an “honest living” in the sector, by which we presume he is referring to the TA’s removal and prosecution of unlicensed transport operators.
But given Prime Minister Andrew Holness’ belief in the power of the market, Mr Montague said his proposal is to allow the market “to determine the situation point” and thereby “open all routes in Jamaica”. He added: “We will allow (those) who wish to be licensed to be licensed.”
That will not only remove the need for a bureaucrat to allocate transportation routes, but create an environment of perfect competition. Or, so it seems. Except, that, of itself, isn’t a complete or rational economic argument, especially in the context of Jamaica’s search for growth and development. In that context, a number of important factors ought to be kept in mind.
First, as Mr Montague alluded to, the capacity to move people is critical to the advancement of modern societies, helping to align skilled workers to available jobs. Because of access to cars and buses and trains, people don’t have to live next door to their places of work.
Indeed, inadequate public transportation services increase demand, where economically feasible, for private vehicles, which triggers traffic gridlocks and workers wasting time in their cars rather than engaging in economic production. Or, they may just have no means at all of reaching work.
Additionally, an overdependence on private vehicles generally means increased consumption of petrol – road transportation in Jamaica consumed more than 6.3 billion barrels of petrol in 2016 – and high emissions of carbon monoxide, contributing to global warming. It may also require greater investment in road and related infrastructure.
WORTHWHILE TO REGULATE
It is, in part, against this backdrop that governments usually determine it to be worthwhile to regulate and rationalise public transportation, including often, especially in major cities, subsidising or owning significant parts of public transportation systems, as is the case with this country’s Government and the Jamaica Urban Transit Company (JUTC). The intended effect of such actions is twofold: for the efficient movement of commuters and to minimise chaos in cities, especially crowded ones in developing countries.
In 2016 in Jamaica, there were more than 19,000 registered buses and taxis, or approximately 38 per cent of the more than 51,000 vehicles licensed to provide commercial transportation services. About 11,800 of these were route taxis, plus the many thousand more illegal operators who, Mr Montague complained, were being made into criminals. Combined, they make up a group against whom Jamaicans often complain of jostling for fares and causing mayhem and danger on the country’s roads.
Indeed, Jamaica’s taxi and bus drivers are often held out as being symbolic of the country’s disorder, but whose dysfunctional behaviour Mr Montague apparently perceives to be the result of undue and unfair interference with the market by bureaucrats. He may be right.
We, however, need more data-based evidence to be convinced. In this regard, Minister Montague must be keenly aware of the dangers of his proposed experiment before he proceeds with it.
At the same time, he should engage in a comprehensive study, including of public infrastructure requirements, for a modern transportation system. It must involve key stakeholders – political leadership, community and civil society groups, and businesses – and consider creative ways to finance such a project.