TAXIS, BUSES AND MAXIS SUBSIDISE COMMUTERS

It may be difficult at this stage to convince the Erin residents, who blocked the road on Friday to protest the increase in the Siparia-Erin taxi fares, that despite the rate rise, the taxi drivers with their relatively inexpensive fares are continuing to provide them with an unwitting subsidy which helps them to cope with today’s exploding cost of living. The rapid increase in the cost of many imported food items and other materials is largely as a result of the tremendous demand in China for, say, iron and crude, which has sent the cost of crude soaring, and with it nearly everything else.

The same argument of subsidy through low fares is applicable whatever the routes, whether San Fernando to Port-of-Spain, Chaguanas to Port-of- Spain, Arima to San Juan, St. James, St. Anns, Maraval or Couva to Chaguanas. And it is these low fares charged, not only by the conventional taxis, but by maxi taxis and on buses owned and operated by the Public Transport Service Corporation that have acted as a brake on wage demands. Unfortunately, unlike that of the Public Transport Service Corporation (PTSC), it is a subsidy forced on the conventional taxis and maxi taxis. Fares on conventional taxis, maxi taxis and buses in Trinidad and Tobago are among the lowest in the world and the competition between the three arms of paid transport have allowed for a restraint on fares despite the sharp rise in the landed cost of imported vehicles — buses and motor cars — over the years.

The country’s first Prime Minister, the late Dr. Eric Williams, when Government acquired the Trinidad and Tobago Bus Service and the National Transit Corporation in 1965, consciously decided to keep the bus fares low even though it meant subsidising the cost of the service. Dr. Williams had reasoned that for the bus service to pay for itself it would have to charge substantially higher fares which in turn would lead to higher wage demands. An outgrowth of this policy was that the promise of an additional six per cent wage increase above whatever structure was agreed to between the Transport and Industrial Workers Union and the PTSC was not kept. But I have strayed.

Low bus fares meant that the owner/operators of pirate or route taxis were constrained to keep down their fares. But even as the Public Transport Service Corporation kept a lid on fares and bus passenger totals rose from 25,477,614 in 1967 to 29,781,868, or by 16 per cent, and receipts rose by 31 per cent from $3,744,562 to $4,941,450 during the same period, working expenses per bus mile increased 77.8 cents to 85.3 cents. In addition, the total expenses per bus mile jumped from 86.8 cents to 95.9 cents. This had been caused, inter alia, by a 100 per cent increase in the cost of fuel and oil and a 53 per cent increase in the cost of new tyres. To keep the cost of tyres down the PTSC pursued a policy of recapping tyres.

But though the massive increases in the cost of fuel and oil and tyres were being passed on indirectly to the taxpayers through Government subsidy of the bus service, the taxi drivers were unable to pass on the rise in costs and, ipso facto, the operating of their vehicles to passengers by way of increased fares. There would have been passenger resistance, because there was always the alternative of the bus. The PTSC’s deficit in 1966 amounted to $7,369,448. Added to this, there was the hidden subsidy of the limiting of bus workers’ wages. The subsidy per passenger, applying only the PTSC’s deficit, was marginally over 42 cents. In fact, the subsidy worked out to an average of approximately four times the cost of the lowest fare!

In 1965 the PTSC ordered 109 AEC Reliance 590 chassis mounted with metal section bodies, delivered in completely knocked down condition at a cost of $5,760,000. The cost of assembly of the units was appreciably less than that of the CKD chassis and bodies.  So that the cost of a bus worked out at less than $80,000. There were other units which cost on the road less than $40,000. Meanwhile, Govern-ment, covertly, mandated the PTSC to charge heavily subsidised fares. The subsidised San Fernando to Port-of-Spain bus fare, for example, was 66 cents. Today, with a fully assembled bus costing between $800,000 and $1.2 million the fare for the San Fernando to Port-of-Spain route, still heavily subsidised, is $4.00 and $6.00, depending on whether or not the bus is air conditioned and the number of stops it is required to make.

A modestly priced four-passenger seater taxi cost approximately $4,000 in 1967. Today, a car purchased to be used as a route taxi can cost in the region of $80,000 or more, the equivalent of 20 times as much as in 1967. The owner/operator in an effort to keep down costs very often has to “work” the vehicle beyond acceptable limits. In 1976, the PTSC ordered 432 buses, and somewhere around that period Dr. Williams, took the decision to allow for the introduction of mini buses as taxis. In order, however, to comply with the Transport Service Act No. 11 of 1965, under which the PTSC was made the sole provider of a public transport bus service, Government called them by the euphemism — maxi taxis! The idea was that the PTSC buses would set the low fares and the maxis would follow suit and the additional competition resulting would prevent conventional taxis from charging higher fares. 

I understand the position of passengers on the Siparia-Erin route, but unless the taxis are subsidised, and this is highly improbable, given, for example, the World Trade Organisation position on subsidies, and more to the point that of the International Monetary Fund, there is not much that the Government can do. Perhaps, I should explain that in order to keep within the conditions laid down by the IMF, Government since 1967 has been referring to all subsidies provided the PTSC and other Public Utilities, as loans!