Assesment 2 Transntiago

Microeconomía ICS2523
Pontificia Universidad Católica de Chile
Assigment 2
Subject 2: Analyze how the way the drivers are paid affect their behavior

The capital of Chile, Santiago, is the home of more than six million people spread over 1400 sq km (J.C. Muñoz. A. Gschwender/ Research in Transportation Economics 22 (2008), page 45). In a city of these proportions the transportation systemplays a major role. That’s why years ago the Chilean Government decided to modernize the latter with a new system called Transantiago. Cities like Curitiba and Bogotá were the leading examples for Chile, but no of the previous experience included the whole transportation system 6 million people. So this ambitious plan was also pioneer in Latinoamérica.
In the next few pages, this essay willanalyze the matter from the buses’ drivers’ perspective. This will be done with the objective of understanding how the drivers’ behavior is affected by the way the salaries are given before and after the big change.
Before Transantiago the transportation system absorbed taxis, taxis-colectivos, Metro and buses. This latter item was the one causing more problems. It worked as separated private diversesized companies of buses with poor or nothing regulation. Another factor that contributed to the problematic is the one we are interested in: the way the bus’ drivers were paid. At that time, their salaries depended on how much money they made on tickets. So the more passengers, the more personal income. This had several repercussions that we will describe now.
The first topic that this way ofpayment caused is the students discrimination. There is a differential fare for school and university students but they use the same amount of space so drivers wouldn’t take them in their buses because they meant a lower profit. This origin another issue: the non ticket service. It became a typical practice. The drivers didn’t give a ticket to students so they kept the money for themselves. Ofcourse this represented an important loss for the companies.
A second problem was the competition between drivers. There were real races between them to get first to the busiest stops with more users. This neglected way of driving cost, beside of frequency troubles, many accidents. Statistic says there were 120 deaths a year because of this. The competition went so far, that a new office was born: thesapos. Their job was to take the time between in an specific stop and inform the drivers this range so then could hurry or slow down the speed (J.C. Muñoz. A. Gschwender/ Research in Transportation Economics 22 (2008), page 45-46).
In the legal/economic side of the matter, the problem was that micro drivers didn’t declare their employment, so they were legally unemployed and couldn’t ask forloans in the bank This mean they had no health or death insurance, and no retirement pension. Besides, they worked an average of 14 hours a day. (J.C. Muñoz. A. Gschwender/ Research in Transportation Economics 22 (2008), page 46 & 53).
Although is not totaly involve with the way the drivers are paid, is important to notice that with this system, the public transportation was frequently victimof assaults. The drivers carried the money of the tickets all they long, so they became a temptation target of robbers. So the job of bus driver was actually very risky, and of course that was not taken in consideration in term of earnings.
When Transantiago was designed, one of the main changes was the way the driver’s salary was paid. Now, they receive a fixed amount of money monthly. This andthe fact that the ticket selling was replace for a smart card and was no longer inside the bus. Let us analyze how this different method changes the old conditions.
As the salary did not depend on the money they made, the aggression on the streets got really lower. The students were no longer discriminated because their inferior fare. The tickets were no longer an issue, because the Bip! Card...