Manila entrepreneur discovers he can charge multiple prices for same journey depending on whether passenger is willing to stand, sit, or hang
Manila, Philippines
A jeepney driver operating on the Manila-Makati route has invented an innovative revenue model that transforms the traditional flat-fare system into a dynamic pricing mechanism based on seating availability and passenger desperation. The driver, known only as “Driver Mike,” charges different fares depending on the specific conditions a passenger will tolerate during the ride.
“Sitting fare: thirty pesos. Standing fare: twenty pesos. Hanging from the side fare: fifteen pesos. Sitting on someone’s lap fare: thirty-five pesos,” Driver Mike explained while his jeepney carried approximately forty people in a vehicle designed for twenty. “It’s supply and demand. If there’s no seats, you pay less to stand. If you want to sit on someone’s lap, that costs extra because I have to convince them to allow it.”
The system has been enthusiastically adopted by other jeepney drivers, who have expanded the pricing model to include “clinging desperately to the roof” (five pesos), “being compressed against multiple other passengers to the point of physical pain” (twenty pesos), and “accepting that you will not reach your destination on time but will instead travel extremely slowly while slowly being asphyxiated by other passengers” (standard thirty pesos).
A passenger complained that she had paid thirty pesos for a seat but ended up standing when an elderly woman got on. Driver Mike offered her a refund of five pesos, which was the “standing fare,” thereby profiting from the seat that was now occupied by someone he had decided deserved it more.
Economic Implications and Market Expansion
The pricing model has proven so effective that jeepney drivers have begun charging different prices based on factors including: direction of travel (more expensive toward destinations more people want to go), time of day (peak hours cost more), and passenger demeanor (cheerful passengers pay more than grumpy passengers, because “happy people should subsidize grumpy people,” according to Driver Mike’s philosophy).
One particularly innovative driver in Quiapo has implemented “surge pricing” where the closer you get to your destination, the more expensive your fare becomes, on the logic that you’ve already paid to get most of the way there so you might as well pay extra for the final stretch.
A transportation economist from Ateneo University noted that this system is similar to airline pricing but less sophisticated and more violent, since jeepney passengers can’t sue for contract violations. The MMDA has indicated they’ll “probably regulate this eventually” but acknowledged that they’re currently “too busy asking people to stop driving to worry about jeepney fare structures.”
More satire at Bohiney Magazine and The London Prat.
SOURCE: bohiney.com