AF Payments Inc, the private firm which operated the contactless payment system Beep Card, has expressed interest in possible partnerships with jeepney cooperatives in the cities of Cebu and Iloilo and in the province of Bulacan. This could lead to the installation of automated fare collection systems in jeepney units in these areas and the furthering of the government’s Public Utility Vehicle Modernization Program (PUVMP).
President and chief executive officer of AF Payments, Peter Maher, said that the firm is considering the initiative as part of their planned expansion efforts outside Metro Manila next year.
“We are looking at jeepney co-ops in Bukidnon, Iloilo, and Cebu. These projects will come up and they all have to follow the franchising guidelines. We are one of the viable suppliers of fare collection systems. So, we expect that we will be given the chance to pitch to provide services,” Maher said at his firm’s year-end press briefing in Makati City on Tuesday, November 27.
Besides increasing ease of operations for jeepney drivers, the automated collection system would also help ensure that passengers pay the appropriate and accurate fares for their trip. Maher also expressed his support of the programs offered by the Landbank and Development Bank of the Philippines (LBP) to provide financial support to jeepney operators and drivers affected by the PUVMP. An estimated P1.5 billion is to be distributed to transport corporations and cooperatives to fund the modernization program through the Development Bank of the Philippine’s Program Assistance to Support Alternative Driving Approaches (PASADA). Financial assistance through PASADA would feature 5% equity for vehicle purchase, 6% interest rates, and a seven-year repayment period for beneficiaries. A maximum subsidy of P80,000 will be offered by the government to jeepyney operators to cover the equity payment. Under PASADA, a maximum of 95 percent of the cost of the vehicle, and a maximum of 75 percent of the cost of the support facilities comprise the total loan per borrower.
“We work with DBP and Landbank that have lending programs based on the modernization initiative. We are part of their offerings, so our system helps the banks to understand how the vehicles are performed from a lending point of view. So, the co-ops get to know good accuracy on automated reporting of their transactions, etc. So, it’s good for the operation of the bank. I think it is good for passengers as well who will pay accurate fares,” Maher said.
The modernization program mandates the ‘phase out’ of jeepney units older than 15 years. These are to be replaced with Euro 4 engines or units with electrically powered engines and solar panels on their roofs. Besides automated fare collection, the program would also have jeepney units equipped with closed-circuit television (CCTV) systems, GPS navigation, speed limiters to minimize road accidents, dashboard cameras, and Wi-Fi for passenger’s convenience.
Jeepney operators benefit more under the program if consolidated into cooperatives. This would allow for a better share of resources, division of operation and maintenance cost, and the maximization of profits through more efficient vehicle dispatch.
Besides their interest in expanding into the jeepney market, AF Payments is also eyeing entering the market of car park businesses. The Beep Card system could also be integrated into the proposed Metro Rail Transit Line-7 (MRT-7) and the Philippine National Railways (PNR) Bicol projects.
The Beep Card program has enjoyed great success since its launch. Recently, the system, which services the LRT1, LRT2, and MRT-3 metro train lines, as well as select bus operations, has reached its one billionth transaction. The cards can also be used to make purchases at selected retail outlets.