Building on their partnership with Central Luzon’s local LTFRB, automated fare collection startup DyipPay has linked up with the Department of Transportation to digitize Region 3’s Libreng Sakay program. Should DyipPay manage to service this program, it could mean a massive spike in their user base. However, a lack of funding may just stop the startup in their tracks.
Founded in 2021 as a response to pandemic health concerns and the nationwide public utility vehicle (PUV) modernization program, DyipPay is an app-based automated fare collection system designed specifically for transportation cooperatives and the daily commuters that rely on them. Through their fare collection and e-wallet services, DyipPay aims to streamline the way Filipinos ride jeepneys and other PUVs.
To date, DyipPay has managed to gather a community of over 500 drivers across 30 transportation cooperatives. Their operations are clustered in Region 3, or Central Luzon, covering the provinces of Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales. Region 3 is the third largest region in the country by population, just trailing the National Capital Region.
Now they stand to capture even more of their market through a public sector partnership that would see them managing the rollout of Region 3’s Libreng Sakay (or Free Ride) program.
Libreng Sakay is a national government program offering fare-free public transportation for qualified individuals, specifically healthcare workers. Under this service contracting program, drivers and operators of public utility vehicles, like jeepneys, are able to provide free rides to commuters. Fare, fuel, disinfection costs, monthly amortizations, and other overhead expenses are shouldered by the national government. In this third and latest phase of the program, the government has allocated P7 billion ($134 million), more than double the P3 billion (~$57 million) budget allocated for the previous phase. Between 2020 to 2021, over 44 million riders were served through the Libreng Sakay program. This year, between April to December, that number is expected to increase to roughly 93 million.
On the ground, however, manual logs and legacy systems have made this program difficult to deploy. “Usually, the government gets ridership data from the cooperatives,” Tan said. “But the problem is, these cooperatives use pen-and-paper manifestos, collecting signatures from riders.” These manual systems present a number of issues for the national government around the accuracy of their records. “Through DyipPay, they can get the raw ridership data straight from our systems,” Tan said.
It’s a win-win scenario. The government can confidently deploy their program, while DyipPay has a compelling incentive for new users to come onboard their system: free rides. Through this partnership, DyipPay may just achieve the scale they need to become the undisputed leader among Region 3’s automated fare collection systems—a stepping stone towards nationwide growth. But by facilitating free rides on behalf of the government, DyipPay trades user growth for present revenues. “We generate some revenues from drivers, cooperatives, and riders topping up and cashing out from their [DyipPay] wallets,” Tan said. “But because this program offers free rides, we are not generating direct revenues from this partnership.”
The choice would be a no-brainer for well-funded startups with the resources to scale. As such, Tan is on a fundraising sprint, eager to pull together the capital necessary to meet this massive opportunity. “We are in early talks with some venture capitalists already,” he said. “We’re looking to raise P200 million (~$3.8 million) to fuel our operational expenses, manpower, and marketing expenses over the next two years.”
Should they manage to raise these funds, Tan says DyipPay will first be investing in pulling together a proper executive team. “So far we’ve relied on organic word-of-mouth to gain users,” Tan said. “With the right team, we can really maximize the Libreng Sakay opportunity and grow DyipPay. There are thousands of cooperatives in Region 3 alone. If we can just capture the entire fleets of the 30 cooperatives we already have on our platform, we can probably triple the number of vehicles using DyipPay.”
Beyond Libreng Sakay, DyipPay is also actively exploring blockchain applications for future iterations of their platform. “Most uses of blockchain that we see have been in gaming. We want to create more utility for our drivers—where they can earn tokens through daily operations, use them to pay for things like servicing their vehicles, or cash out by converting these tokens into pesos,” he said.
Questions regarding the application. I hope someone can answer
1. Does this app mean more expenses to the Jeepney drivers as they need to invest in having a smartphone with wifi capability and large screen. Large number of PUV drivers are still using the good old call and text cellular phones.
2. Aside from investing in a capable smartphone, PUV drivers need to also have mobile data on their phone, which is last time I checked is not free. It could cost them up to a minimum of 50 pesos for 3 days. This also translates to additional expenses for commuters as well as they need to also have good and enough mobile data during their commute
3. Will this app increase the number of snatchers/thieves in the PUVs? Because commuters have to pull out their phones from their bag or pocket to pay the fare. This might attract snatchers who will see your phone. Unlike the old fashioned way where you don’t have to bring out your phone in the Jeepney, which makes you safer from thieves
4. PUV drivers usually live by their day-to-day income from their rides. Either they buy food and other necessities for their family before going home or go home and give their hard-earned money to their spouse to do the budgeting. But with this App’s cashout process, most of the Driver’s earnings are in a form digital money which they still need to cash out first. Just imagine when the driver’s work ends in the middle of the night (or during rush hours) they still can’t go straight home and take rest, instead they need to go back to the station where they cash out from their digital wallet(which will cost them 1% service charge). Aside from this, PUV drivers also have something to spend on during their work day like buy lunch, merienda, yosi and of course fuel up their Jeepneys, how can they do all these if their money is digital?
Thank you in advance