Jeepney Modernization Needs Better Formulas and Frameworks: Initial Lessons from Naga City

Blog from the Editor:

Formal Stops identified by the LGU for Naga City Loop Routes for its LPTRP Simulation Exercise (SimEX).

As a transport researcher and commuter, I’ve long believed that the Public Transport Modernization Program (PTMP) is a necessary step forward. But watching how it unfolds in cities where we work, most recently in Naga City, I’m reminded of the biggest blind spot in our planning framework: business viability.

Our formulas, embedded in the Local Public Transport Route Plan (LPTRP) process, tend to be overly rigid. They work on neat projections of peak demand and theoretical coverage—but they rarely capture how operators actually survive on the ground.

Here's a brief guide and (data) exploration on how LPTRP formulas function and where they fall short:

1. Go to the LTFRB website and search for approved LTPRPs and the required modern PUVs per "rationalized" route of a city.

2. Take note of these three (3) things:

   1. Passenger Volume (PV) or the daily ridership.

   2. Average Travel Speed (ATS) or just the total roundtripdistance over total roundtrip time in kph.

   3. Fleet Size (FS) or No. of Authorized Units (NAU).

      
      

The third variable is the result of the first two (2), together with other factors, and is the biggest bone of contention for transport providers/coops. The NAU essentially determines the number of jeepneys permitted to operate, and is associated with the number of current units that will eventually be phased out.

Without math-ing hard, let's quickly examine how it may help project the viability of the public transport business on a particular route, assuming the assumptions are accurate. Example: For a 7-km city route with 11,000 daily passengers, the fleet size or number of jeepneys needed is 71 units.

Now, assuming the average fare per passenger for this short jeepney/public transport route is PhP15, the entire operation and fleet could potentially earn a total of PhP165,000 daily. With 71 units, each jeepney would generate approximately PhP2,323.00 per day (gross). After deducting fuel costs and possibly the "boundary" or vehicle rental, a jeepney driver reportedly takes home between PhP400 to PhP1,300 daily.

Can a revenue of 2,323 pesos per vehicle per day ever lead us to a modern public transport system?

No, definitely. This is evident from the experience of ‘modernized’ cooperatives that have invested in new jeepneys or Public Utility Vehicles (PUVs) but are currently struggling financially

The Planning Trap

What's wrong with the formulas? Here’s a common scenario--both in thought and actual conditions from other cities where we've worked:

• During the morning peak, demand is high. The formula justifies a fleet of, say, 50 modern jeepneys to serve the route.

• But once the off-peak period rolls in, ridership thins. Suddenly, the demand is only enough for 10 units an hour.

The consequence? Operators still shoulder the full cost of acquiring and maintaining those 50 units, but they only make money on a fraction of them. The result:

• Long headways during off-peak (sometimes 15-30 minutes or more).

• Idle assets that still need to be amortized.

• Reduced commuter trust, as reliability breaks down outside rush hour.

Even the head of the LTFRB, the regulatory and planning body of our public transport systems, admitted during the congressional budget hearing on September 4, 2025, that the ‘route rationalization’ of the PTMP could result in an undersupply of PUVs and increased waiting times for commuters. Chairman Atty. Teofilo Guadiz III, answering a query from a lawmaker--Rep. Renee Co--on the impact of route rationalization, said:

"So we have a route rationalization po. Tinitingnan lang namin kung ilan dapat ang maging sasakyan sa isang ruta. So talaga hong nagbabawas, kumokonti po ‘yung number because we rationalize the routes."

If route rationalization leads to worse commuter experiences and makes public transport less attractive, then it is clearly failing its purpose. Officials must admit how counterintuitive this is.

(In the old world of traditional jeepneys, they tended to be oversupplied on the road and very available to commuters—even running with very few passengers—because their operating costs were much lower, with no bank loan amortization and cheaper fuel).

This isn’t just a technical inefficiency—it’s a recipe for financial distress. In similar small and medium-sized cities, who happens to be the early adopters of PTMP and LPTRP, there are a sharp suburban–urban divide. And the mismatch between projected fleet sizes and actual ridership patterns can cripple cooperatives before they even stabilize.

Sample SafeTravelPH-tracked trips from Bacolod City in 2023 (at least 2x the population of Naga City), indicating trips from the outskirts to city center.

Data as a Missing Piece

(Self-promoting hard) I wish more LGUs had used the SafeTravelPH App in their planning and monitoring phases, which partners in Naga City are already using for its simulation exercises, to help determine a more suitable fleet transition scenarios. Instead of planning solely on formulas and static counts, the app captures realtime boarding and alighting data, trip speeds, ridership profile, and congestion/overwaiting points across the entire day. That matters because it reveals the real business curve: Which trips period and routes are profitable? How many passengers board in the suburbs versus the city center? What happens to demand after 9 a.m., or in the lull between 1–3 p.m.?

Equipped with this kind of evidence, we can begin to design service plans and fleet modernization phasing-in strategies that balance commuter needs with cooperative sustainability—instead of leaving operators to quietly adjust (usually by cutting off-peak trips) and undermining the intent of modernization. The worksheet below demonstrates that with these data insights, we can exactly plan for and detail the phased transition with annual targets and performance metrics.

Summary Sheet from the Parasol Route and Business Viability Calculator based on Demand factors.

Modernization With Business Sense

Modernization is not just about replacing old jeepneys with new, shiny (or sometimes not too fancy) minibuses/jeepneys. It’s about building a system that works—for commuters, operators, and cities alike.

For that to happen, route rationalization must integrate business planning from the start. Here are some suggestions:

1. Road map of transition from traditional to modern PUVs per year (fleet mix), with fleet sharing policy with other routes that may need the surplus fleet supply of a pilot or anchor route of the city.

2. Operational co-funding/subsidy schemes (i.e. service contracting) that recognize off-peak inefficiencies, to maintain acceptable service frequencies. A modern public transport system cannot live on fare-box income alone.

3. New acquisition and franchising models, such as coops renting LGU-acquired or co-financed vehicles to share financial risk and allow asset-use flexibility (e.g., PUV or LGU shuttle/shared-use services during non-PUV days).

4. Fixed but acceptable service frequencies, Fixed but acceptable service frequencies, ideally determined in consultation with patrons, especially for those cooperatives transporting members of communities in the outer core to the city center.

5. Data-driven monitoring and adjustments that keep services reliable throughout the day, not just at rush hour, and rationally throughtout the city including periurban areas (outer core of the city).

6. No transport providers/coops should be modernizing their fleet if the average income per PUV is below PhP5,000 while paying PhP35,000–40,000 a month in amortization. There will be harder maths that we can discuss later, but at fare-box revenue levels of PhP2,000–3,000 per day, the acceptable compliant, newer/retrofitted PUV should not cost more than PhP1.3M to make it financially work. (Current modern PUVs are priced at PhP2M to 2.8M per unit.)

7. Unfortunately, in the Philippines, we have more ‘NO Loading and Unloading’ signs than actual placemaking and wayfinding for formal stops. But we need more than ‘Loading–Unloading’ signs; we need better PUV stop designs and real infrastructure to control PUV stopping and improve travel speeds and the operational efficiency of the fleet. LGUs, beyond planning the routes, must have a stake and provide support in the fleet management of their Public Transport supply.

8. (Addendum: Well, DPWH unsurprisingly has billions of extra or misused or abused budgets. Why not ask the engineering agency of the government to be creative and engineer-like in integrating PUV stops and terminals in our transport infrastructure?)

A common "traffic management" device in Philippine cities--where not to board and alight passengers. So, anywhere beyond these markers are acceptable loading/unloading areas? (Meanwhile, "No Parking" signs might be missing in the photo.)

Looking at Naga City’s pilot, I don’t just see a test of formal stops or headways, and the associated challenges to implement this with enforcement and infrastructure, and public information campaign. I see a chance to reset how we think about modernization—from a compliance exercise to a living, complex system that can adapt to commuter realities and transformative cooperative enterprising. We are hoping that our partners would truly embrace a collaborative planning and governance approach in this modernization efforts, to help bridge the gap between policies, formulas, and realities.

At SafeTravelPH, we advocate and provide tools to elevate this discussions and practice. Learn more about how we collboarate with the academe, industry, and government here.