Saturday, August 16, 2014

Why we need to raise MRT train ticket prices

Last Wednesday, the MRT 3 train overshot the rails in the TAFT avenue station.  This is a symptom of something deeper that is wrong.

A. The Toyota Way: Asking Why 5 Times

In his book, The Toyota Way, Jeffrey Liker said that one secret of Toyota's manufacturing success is in their method of finding the root cause of the problem by asking why five times.  Yuichi Okamoto, a former Toyota Technical Center vice president, said: "We have a very sophisticated technique for developing new products.  It is called five-why.  We ask why five times."  This asking of five why's is actually part of a seven step process that begins with the statement of the problem and ends with the implementation of standard procedures to prevent the problem from happening again.

I don't have access to all information regarding the disaster and the operational procedures of the MRT train station.  So my series of question and answers is not an accurate diagnosis of the problem, but rather a template that MRT administration may use to find the root cause of the problem.

Q. Why did the train overshoot the EDSA Taft avenue station?
A. Because the train has no brakes
Q. Why did the train has no brakes?
A. Because it experienced the technical problem after leaving Magallanes station
Q. Why did the train experienced technical problems?
A. Because there was no adequate maintenance for the trains?
Q. Why was there no adequate maintenance for the trains?
A. Because there were no sufficient funds to set aside for maintenance?
Q. Why were there no sufficient funds for maintenance?
A. Because the ticket price is not enough to cover the expenses

Asking 5 why's is a good exercise.  If Toyota is managing the MRT, it would most likely do the following:

1. Make sure that the train has brakes which has a manual option.
2. Make train-braking a routine test for trains every month or every quarter
3. Redesign the collision bumpers of each station to withstand the energy and momentum of a train running at full speed.  The bumper should have some damping mechanism in order to transfer the trains energy into heat.
4. Set aside budget for train maintenance which includes train braking and people/crew mobilization.
5. Make case studies of disaster scenarios and their standard operating procedures (kept visual at all times)
6. Increase the prices of MRT tickets.

B. Law of Supply and Demand

There is a strong demand for the MRT trains because they are cheap at Php 14 pesos per person, when their actual price should be Php 54 per person, so that the government has to shoulder the remaining Php 40.  The price of Php 14 pesos is already the price of buses plying along EDSA, or even much cheaper, with the added benefit of being faster.  If people badly needs the MRT for their convenience, then they should pay a higher ticket price for it.  The analogy is this: people at airports finds it more convenient to shop and eat there before the flight than eat outside.  The pain is greater, especially if the plane shall leave within 20 minutes.  The greater the pain to the customer, the greater the price the business can sell its goods and services.  That is why food and items in airports are expensive.  This is simply the law of supply and demand: if the supply is low and the demand is great, prices will naturally go high.  Economists call this the demand pull.

Increasing the MRT ticket prices to Php 54 may be painful for those accustomed to the convenience of the MRT.  But there are other options: buses along EDSA.  They may be slow, but they are cheap, even the aircon buses, for you can ply EDSA for usually less than Php 20.  This then is just a problem in time management for those who cannot afford the convenience of riding in trains.

Increasing MRT ticket prices to Php 54 also has other benefits:

  • There will be lesser number of people who will take the MRT.  This translate to less load to the trains, making them more efficient and less costly to maintain because the parts do not wear easily.  
  • Fewer number of people in trains will attract the rich to give up their cars and use the trains instead, especially if the trains are comfortable enough to sit and have a good chat with your seatmate.  Less private cars in EDSA means faster time for buses to ply their routes.
  • There will be more people who will take buses as public transportation along EDSA.  The waiting time will become lower for buses to fill their quota of passengers to break even.  And the income of bus drivers, conductors, and operators will increase.  The quality of the buses will improve, since the demand is great, but people will only ride the better buses.
  • Taxi drivers will have more income. The difference between a taxi (flag down of Php 40) and a train (Php 54) would become smaller.  Given the same route along EDSA, some people who don't like climbing the long stairs of MRT would prefer the convenience of a taxi instead.
C. The Fifth Discipline: Systems Thinking

As you can see, the MRT is not an isolated system.  It is part of a bigger transportation in Metro Manila.  Change the train operation system, and you will affect other parts of the transportation network--buses, jeepneys, taxis, private cars, and even motorcycles.  What we really need is systems thinking--to see things as parts of a whole network with cause and feedback processes.  As Peter M. Senge wrote in his book, The Fifth Discipline: the Art and Practice of the Learning Organization:
Systems thinking is a discipline for seeing wholes.  It is a framework for seeing interrelationships rather than things, for seeing patterns of change rather than static "snapshots." It is a set of general principles--distilled over the course of the twentieth century, spanning fields as diverse as the physical and social sciences, engineering, and management.  It is also a set of specific tools and techniques, originating in two threads: in "feedback" concepts in cybernetics and in "servo-mechanism" engineering theory dating back to nineteenth century.  During the last thirty years, these tools have been applied to help us understand a wide range of corporate, urban, regional, economic, political, ecological, and even physiological systems.  And systems thinking is a sensibility--for the subtle interconnectedness that gives living systems their unique character. (pp. 68-69)
If the trains become a profitable business due to higher ticket prices and more customers in the higher income bracket, the government can implement its other train projects connecting airports and ports in Luzon, Visayas, and Mindanao.  We won't rely more on the Ro-Ro boats to deliver vegetables.  We can rely on cargo trains to deliver goods fresh from Baguio and Davao to Manila.  The trains will connect families and friends in distant provinces, allowing people to work outside Manila yet still come in office at 8 am and leave at 4 pm.  Metro Manila will be decongested and economic growth shall spread out to the far flung villages.  This large train network will make Philippines an island nation.
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The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer
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