The Correlation of Economic Factors and Age and Social Bracket to

Provisional Fare Rate of Tricycles in Quezon City

Chapter 1
The Problem and Its Setting

Introduction of the Study

'Under the Local Government Code, regulation of tricycles is under
the authority of LGUs and not the Land Transportation Franchising and
Regulatory Board or the national government. Therefore, LGUs may
already revise the tricycle fare matrix following established procedures,”

Fare adjustments are sometimes made when riders reach out to

us with concerns about their trips. If your fare was adjusted after a recent
trip, it may mean your rider reached out to us to request a fare review.
Common reasons for rider fare review requests are: Trip didn't start or
end on time. Wrong rider was picked. Your upfront price may change if
you add stops, update your destination, take additional time at an on-
trip stop, or the route or duration of the trip changes significantly.

The service fee is the fee drivers pay, and it varies from trip to trip. It's
the difference between what a rider pays and what a driver earns on a
trip, excluding tips, tolls, and certain fees, taxes, and surcharges.

Tricycles and Pedi cabs have been banned from traveling on national
highways for a long time now but there are those who still do not follow
the rules. Not only are they disruptions on the road, but they can also
cause accidents. This is why mayors and the police have to be stricter
with the enforcement of this ban."

Senior Citizens and persons with disabilities (PWDs), students will now
be granted a 20 percent discount on all public utility vehicles as long as
they present their school IDs. This after President Rodrigo Duterte signed
the “Student Fare Discount Act” (R.A. 11314) into law on April 17, 2019.

The Fare Calculation and Charging consists of three distinct but related
functions: calculation of the applicable fare for the journey being
undertaken. performing the transaction that will result in receipt of the
applicable fare. recording the transactions.
Statement of the Problem
This study aims to identify the relationship between economic
factors and the age and social brackets affecting the determination of
the appropriate fare rates in the tricycles in Quezon City, moreover, this
study aims to answer the following questions:
1. What are the primary economic drivers of the changing fare
rates in Quezon city?
2. Does the differing age and social status affect the purchasing
power in acquiring the services of Tricycles?
3. Other than the mentioned variables, are there any more
variables that can significantly change the fare rates in
tricycles?
4. Can these variables be a basis of a centralized Tricycle Fare
Rate Matrix in the Philippines?
Null Hypothesis
There is no significant relationship between the driving economic
factors and the differing age and social brackets of citizens and passerby
in Quezon City on the tricycle fare rate matrix.

Theoretical Framework
Law of Supply and Demand
The law of demand and supply is the backbone of a market economy.
The fundamental concept refers to the relationship between the sellers
and buyers of a particular resource. Here, a change in one of the
parameters causes a change in another. According to this theorem, when
there is a higher demand for a commodity, the need for its supply will be
high and vice versa. The equation states that the desire for a product and
its fulfilment are interdependent.

The law of demand and supply is an economic law that acts as a support
system for most economic principles. It determines people's interest in
a particular good or service.

If it has a limited supply, the value will be higher. Also, if the price of
goods is high, the ratio of people purchasing it will be lower. There are
many factors that are capable of affecting supply and demand. This can
cause the demand-supply intersection point in the graph to either
increase or decrease.
 The law of demand states that the higher the price of a product, the
demand for that product will be lower (fewer people will buy it),
provided all other factors remain constant. It counts the number of
consumers willing to buy products at different price ranges within a
specific time period. Demand for any commodity shows that the
consumer is interested in purchasing the goods and can pay for them.

The law of supply is yet another essential fundamental economic

concept. It shows the quantities sold at a specific price. Supply is the total
number of a particular good or service currently available for the
consumers. You can also equate the supply of a product with the number
of goods available within a specific price range.
 Conceptual Framework
Input Process Output

Economic driving Planning

factors on the changes
Information campaign
in fare rates Research of Related on the provisional fare
Study rates in Tricycle
Different age and social
services
brackets of the users of Data Gathering
tricycle services by
citizens and passerby in Ø Formulation of
Basis on the mandate
Quezon City Questions
of a centralized
Ø Survey
Questionnaires Tricycle Fare Rate
Other factors affecting
Ø Interviews Matrix across the
the change in fare rates
Ø Retrieval of Philippines
Questionnaire
Ø Analysis and
Evaluation of
Data
Ø Statistical
Treatment
Ø Tools Employed
Ø Computation

Interpretation of
Data gathered

Study of the
findings

Formulation of the
Conclusions and
Recommendations

Feedback

Figure 1. Conceptual Framework

 Figure 1 shows the conceptual framework of the study. The input
shows the different variables being considered in achieving the
objectives. The primary variables in this study are the economic factors
affecting the change in fare rates, different age and social brackets of
service users residing and passing by in Quezon City and other factors to
be discovered through the course of the study.
The process is planning research of related study, data gathering,
formulation of questions, survey questionnaires, interviews, retrieval of
questionnaire, analysis and evaluation of data, statistical treatment,
tools employed, computation, interpretation of data gathered, study of
the findings, formulation of the conclusions and recommendations.
The expected output to be derived from the input and the process are
the conduct on the information campaign on the provisional fare rates
in tricycle services and the creation of basis in the use of a centralized
tricycle fare rate matrix across the country.
Significance of the Study
With the expected results of the study, the researchers aim to
provide new knowledge in creating a fare rate matrix based on economic
factors and sociographic information.
The significance of the study is directed to:
Government. They will have a new basis in the creation of fare rate
matrix that is heavy in the principles of demand and supply and the
understanding of different service user groups.
Commuters. They will be provided with a profound fare rate system that
is just and suitable for the group that they belong in.
Drivers. They will be given assistance in facilitating the ever-changing
price hikes and slowdowns in resources needed in the operation of the
service.

Operational Definition of Terms

Inflation rate – It is the increase in prices over a given period. Inflation is
typically a broad measure, such as the overall increase in prices or the
increase in the cost of living in a country.

Industrial Production - It refers to the output of industrial

establishments and covers sectors such as mining, manufacturing,
electricity, gas and steam and air-conditioning. This indicator is
measured in an index based on a reference period that expresses change
in the volume of production output.
Incomes - It is the amount of money, property, and other transfers of
value received over a set period in exchange for services or products.
There is no single, standard definition: income is defined according to
the context in which the concept is used.

Population – It is a group of organisms of one species that interbreed

and live in the same place at the same time.

Energy consumption – It is the use of power or energy of a system by

making use of supply. The consumption is done in Giga Joule per year,
kilograms of oil equivalent per year (kg/a), and in Watts.

Social Status – the position that a person occupies in a social hierarchy

that is based on honor or prestige, together with the privileges,
obligations, and lifestyle that go along with it.

Age Bracket – a group of individuals who are roughly the same age.

Economic Driver – refers to a key factor that has a large influence on

some outcome of interest.
 CHAPTER 2
REVIEW OF RELATED LITERATURE AND STUDIES
Presented in this chapter are foreign and local literature and studies
gathered from online resources used by the researchers in the pursuit
of this paper in order to have a more accurate study. This will help the
researchers to have a better understanding and wider perspective on
this issue.
Related Literature
National Economic and Development Authority (NEDA) stated that
if a transport hike is implemented, a 0.3 percentage points increase on
inflation will take place as well. In economic terms, this number is high.
This is the reason why transportation fare hike is not easily approved by
the government as it will trigger further inflation of other aspects as
wage hike demand will likely happen. If this happens and approved by
the government, companies will increase the pricing of its products to
cover the additional costs of manpower. With this, transportation fare
plays a vital role in determining the market price of necessities as it
causes a domino effect to commodity pricing during fare adjustments.
LTFRB Chairperson Cheloy Velicaria-Garafil said the display of fare
matrix as a condition for fare hike is stipulated in the resolutions that
approve the fare adjustments last month.
As the fare hike starts on Monday, Oct. 3, for passenger jeepney and
other public utility vehicles (PUVs), the Land Transportation Franchising
and Regulatory Board (LTFRB) reminded commuters not to pay extra
unless there is a new fare matrix displayed inside the vehicles.
A fare matrix displayed conspicuously inside the PUVs is one of the
strict conditions in the implementation of the fare adjustment.
 Related Studies
According to (Mussel white et al., 2020; UITP, 2020), The decline
of public transport ridership is likely due to both authorities' restrictions
and travelers’ own choices. Public transport stations and vehicles are
recognized as high-risk environments for the transmission of COVID-19
due to the limited physical space available, the abundance of surfaces
that help spread the virus, and the limited testing of crew and passengers
who use the system.
As advice of (Public Health Agency of Sweden, 2020b), Evidence
from Sweden shows that bus and tram drivers were among the group of
professions with the highest risk of being infected.
Based on the studies of (Tirachini and Cats, 2020), outline a
number of urgent issues and important directions for research in order
to cope with the ongoing crisis while continuing the development
towards a sustainable transport system.
According to (Almlöf et al. 2020), analyses the propensity to stop
travelling by public transport during COVID-19 for the individual holders
of 1.8 million smart cards in Stockholm, Sweden, combined with
demographic data at the zonal level. The results show that education
level, income, age as well as workplace type are strong predictors.
Webster and Bly (2019), which were based on international
aggregate measures of fares elasticity for all journey purposes and
passenger types across all trip lengths and fares.
The realization that long-term elasticities can exceed -1 has serious
implications for the public transport industry. While the immediate
effect of a fare rise might be a temporary increase in revenue, the long-
term effect is likely to be a decrease, although if future cash flows are
discounted, operators may benefit from fare increases. Nevertheless,
attempts to counter falling revenue with fare increases alone will
eventually fail. Reversal of negative trends in public transport patronage
requires service improvements, and possibly fare reductions.
According to (Smith, Ye and Tithe ridge, 2017), Studies of travel
satisfaction, as well as commute satisfaction, has received increased
attention in recent years. Several studies have found that factors such as
commute length and mode choice have a large impact on commute
satisfaction, and especially that public transport commuters tend to be
less satisfied than other mode users.
Synthesis of State of - the Art
The related literature and studies gathered by the researcher will
be played an important role in the development of the present study,
the abovementioned related literature and studies will be associated
with the present discourse due to their supporting components and
details.
The studies conducted by Mussel white et al focusing on the
public transport stations and vehicles are recognized as high-risk
environments for the transmission of COVID-19 due to the limited
physical space available, the abundance of surfaces that help spread the
virus, and the limited testing of crew and passengers who use the
system.
According to LTFBR Chairperson Cheloy Velicaria- Garafil said the
display of fare matrix as a condition for fare hike is stipulated in the
resolutions that approve the fare adjustments last month.
As advice of (Public Health Agency of Sweden, 2020b), Evidence
from Sweden shows that bus and tram drivers were among the group of
professions with the highest risk of being infected.
 Based on the studies of (Tirachini and Cats, 2020), outline a
number of urgent issues and important directions for research in order
to cope with the ongoing crisis while continuing the development
towards a sustainable transport system.
According to (Almlöf et al. 2020), analyses the propensity to
stop travelling by public transport during COVID-19 for the individual
holders of 1.8 million smart cards in Stockholm, Sweden, combined with
demographic data at the zonal level. The results show that education
level, income, age as well as workplace type are strong predictors.
Previous studies have shown that people's satisfaction with their
commute can have an impact on their subjective well-being and general
quality of life. Public transport users tend to be less happy with their
commute than.
Public transport users tend to be less happy with their commute than
pedestrians, cyclists and car users. A relevant question then is what
explains the low satisfaction among public transport users, and what can
be done to make public transport commuting more satisfying.
It is useful for policy makers planning public transport services. Both
to make the service more satisfying for the current users, and also in
order to make public transport an attractive alternative to car use.

What affects the buying power of everyone?

According to the Association for Psychological Science (2018), higher
social class individuals can focus more on their own internal
development and growth because they have access to greater resources.
Higher-class people should be happier from an investment in an
experience since experiential purchases are more strongly tied to the self
than material ones. Conversely, people from lower socioeconomic
classes did not exhibit the same pattern; in some instances, they claimed
that both experiential and material purchases brought them to the same
level of satisfaction, while in others, they claimed that material
purchases made them happier.

CHAPTER 3
METHODOLOGY

Research Methodology and Design

Since the study will be dealing with variables that are both
subjective and measurable, the researchers opt to use a mixture of both
qualitative and quantitative research. This will allow them to extract
profound data that will be necessary in achieving the goals and
objectives of this study.
Sources of Data
The data to be used in the study will be retrieved from both online
and traditional sources of information such as web pages, articles, books,
and previous studies. Moreover, data will also be gathered from the
answers of the respondents of the study which are Filipinos who are
commuters in Quezon City, may them be residents or passerby.
Population and Sample
Since the study is undertaking two methods, quantitative and
qualitative, there will be two sets of samples for the study.
In determining the sample size for the quantitative method, the
following must be taken into consideration: a.) population size, b.)
margin of error, c.) confidence level, and d.) standard deviation.

The computation for the quantitative sample size is as follows:

Necessary Sample Size = (Z-score)2 * StdDev*(1-StdDev) / (margin of error)2

With the given formula, the following values will be used:

((1.96)2 x .5(.5)) / (.05)2
(3.8416 x .25) / .0025
.9604 / .0025
384.16

Hence, the needed respondent for the quantitative method is 385

respondents.

As for the qualitative method, the researchers will be making use of the
sample size of 25 for its respondents.

Data Gathering Instrument

In gathering the quantitative data, the researchers will be conducting a
survey in different locations in Quezon City. Equal distribution of survey
forms will be handed out in the major barangays of the city. As for the
qualitative data, the researcher will be conducting an interview with
select commuters in Quezon city, using the snowball sampling technique.

Respondents
The participants of the study will include the commuters in Quezon city.
The selection of the respondents will not be limited to gender-based
selection.

Sampling Method, Procedure and Technique

The researcher will go to the research location and get census of the
number of the possible participants and give the letter of permission to
the mayor’s office. After finalizing the questionnaire and the number of
participants, the researcher will proceed to two days data gathering. The
researcher will then be visiting the major barangays of Quezon city to
conduct the survey.

Moreover, in acquiring the qualitative data needed, the researcher will

be crafting a consent letter requesting for an interview with the selected
respondents. The respondents will be asked to sign the letter to assure
that they are giving consent for their information and insights to be used
in the study.

Statistical Treatment of Data

After gathering the data needed, it will be tabulated and be
analyzed. It will be treated as quantitative data
The researcher will use to know whether there will be difference
between the level of observance. However, it will be computed through
the use of mean.
The mean is the sum of observations divided by the number of
observations and is identified the average. Meanwhile, the standard
deviation is the most common measure of variability, measuring the
spread of the data set and the relationship of the mean to the rest of the
data points are close to the mean, indicating that the responses are
firmly uniform, then the standard deviation will be small. Conversely, if
many data are far from the mean, indicating that there is a wide variance
in the responses, then the standard deviation will be large, if all data
values are equal then the standard deviation will be zero.