Transport operators went on strike this week demanding an increase in public transport prices.
Otherwise, the public is fired up against the guild and criticized for not being sensitive to the seriousness of leaving the city without mobilization.
As in many things, where the problems are not understood, for decades the issue of public transport was not treated and analyzed in the right way, creating a serious imbalance in something that is an essential public good: the mobilization of the population.
A carrier has some direct costs that involve cash, i.e. cash. Fuel, tires, spare parts, auxiliary payment, mechanics, registration, etc. There is another very important cost, which does not involve cash and which the company does not recognize: the depreciation of the unit that has to do with its replacement.
In the company, equipment is depreciated, that is, the depreciation of goods and equipment is formally included in the cost of operations, whereby the company acknowledges that it must make a reserve for replacing equipment that ends its useful life.
Traffic in Guayaquil becomes chaotic in flooded areas, with commuters unable to find buses due to traffic stoppages
There is a vicious circle in public transport: ticket prices are rising. This stimulates new units. Then the costs of everything rise and eat up the depreciation margin of the equipment. Then the costs continue to rise (tickets are frozen for many years) and there is no longer enough even for direct costs and the problem then explodes because the need for cash is not covered, and the replacement is worse. The carrier does not keep accounts, nor does it usually make a reserve for replacing equipment.
Of course, since politics and electoral interest is more difficult than reality, and more than the true welfare of the people and the progress of the country, no mayor wants to touch on that topic. And the governments, which have to increase the fuel because there is still a noose over Ecuador, are not articulating with the mayors a comprehensive program on how to approach the issue of public transport, since we already know that the tyrannies of the Mariateguista have taken to the streets to bring them down when they try to solve the problem.
The price increase is an economic necessity, and the price of diesel significantly affects the price of freight, affecting the poor, unlike heavy transport. We explained it before. If a truck transports 400 quintals of rice from the coast to the highlands, and if diesel costs $4, the economic effect, no matter how much diesel the truck consumes, would not reach one dollar per quintal. That is, a penny per pound.
But if public transportation increases by just “10 cents,” that adds up to 40 cents or about $9 a month per person for the average two buses that normally run twice a day. In a family of five, that’s $45 a month. For the poor, this is a powerful influence.
Instead of subsidizing fuel, subsidies should be directed directly to public transport in order to ensure its economic viability and the replacement of vehicles. Let’s look at the units in Guayaquil: they are already old, and today the price of new ones compared to the price of the ticket is not enough to replace them. Have you seen the new units in circulation?
The urban public transport policy must be part of the national goals that we lack so much. Without demagoguery that excludes economic reality, and that looks only at the voice of the citizen who is transported, and does not see the side of those who provide the service.
This lack of policy meant that more than two billion dollars were invested in the metro in the city of Quito, something that still does not work, and at the cost of the proposed map, will never be able to pay the debts. And then comes the question of who will pay those debts and how?
In Guayaquil, the new mayor will get that hot potato. We hope that we will find a realistic solution that will allow public transport not to collapse and to function properly. Bad public transport is not only an insult to citizens, but also an element of reduced productivity, mood and quality of life of the entire community.
If we do not separate demagoguery and populism from this topic, by politicizing rates as before, there will never be a real solution.and unless we understand that the indirect fuel subsidy must be removed and directed directly, Ecuador will not continue on the right path either. (OR)
Mario Twitchell is an accomplished author and journalist, known for his insightful and thought-provoking writing on a wide range of topics including general and opinion. He currently works as a writer at 247 news agency, where he has established himself as a respected voice in the industry.