A lot of foreigners who come to live in the Philippines are always looking for is a business where they can make enough money so that they can live here. A lot of people who move here do not have regular streams of income at their disposal, and don’t have a lot of savings built up that they can live from. One of the businesses a lot of people talk about is the Jeepney business.
Although the business of owning a fleet of Jeepnies is kind of romanticized by many foreigners, it is a really tough business. Especially in today’s world of very high gasoline (or diesel) prices, it’s hard to make much money from Jeepneys, in my opinion. If you consider how much the Jeepney fare was at the time I moved here in 2000, it has increased, but not nearly at the rate that fuel has increased.
The business model for most people who have enough money to buy a few Jeepnies is that they buy the Jeepnies and then they rent them out to drivers. The drivers then collect a fare from each passenger who rides that day, and whatever he makes over the rental that he paid, that’s his profit for the day. Maintenance costs of the vehicle are for the Jeepney owner to take care of. If the Jeepney is not running, there will be no money for rental that day!
I have not heard for a few years, but last I heard, the driver would pay around P800 per day for rental of the Jeepney. By the time that all of the costs are deducted, it honestly doesn’t leave that much for the owner. Let’s see… what kind of costs would be involved?
- Cost of the Jeepney – maybe $10,000 or so.
- Depreciation of the Jeepney – these things are treated pretty roughly.
- Repair and Maintenance Costs – everything from Oil Changes to Engine Repairs
- Cost in time – Your time is worth money, and you will spend time chasing down people to drive, etc.
All in all, I personally don’t believe that there is a lot of money to be made in this business. It would seem that the record bears me out too, because most foreigners who get into this type of business end up going out of business within a year or so, from what I’ve seen.
A couple other things to consider on this… the locals don’t really like having a foreigner get into this particular business. They will give you strong competition to drive you out of business. Secondly, you can’t just buy a Jeepney and go out and start driving around picking up passengers. You must get approved by the government to run on a certain route. You cannot change to a different route one day just because there are no passengers – you must follow the route that you are assigned. Also, they won’t give everybody a route. If all the routes already have the maximum amount of Jeepnies, you are out of luck!
So, maybe it’s a better idea to search out a different business. Of course, your mileage may vary!
About MindanaoBob
Hi Bob, I always thought that Jeepneys, was not a good business for foreigners to get into, well Bob I think its time to g o out and kill myself hahahaha, a great start to Monday Bob, thanks for bringing that to our attention.
Oh, sure, and next you’re going to be saying my idea for a traveling balut stand wouldn’t work, either.
Negativity!
I’m with Bob. The only reason why I could see you buying one would be to buy off your wife’s family (as in, “Here you go. Don’t ask again because the answer is ‘no’”).
Hi Peter – Yeah, for some reason, it is a business that people dream about and romanticize. I am not sure why, because it is a hard business!
Hi Tom – Your reason (as a buy off for the family) is very common. Even a lot of OFW’s do that. They send the money home so their family can get a jeepney, with the feeling that once the have the jeepney, they can make money on their own, and not need further assistance. Somehow, though… it never seems to work out that way!
Another family buy-off is the sari-sari store. All they need is the money to buy the first inventory and than they can use the profits to buy more inventory. Yeah, right. However, they never account for the inventory that they eat or drink themselves and, wonder of wonders, they don’t have enough money to replace the inventory. Thus, a vicious cycle had begun.
Oh no ! next you are going to say that I will not be able to make a living in Davao as a lap dancer !!
Scott
Hi Gary – Yep! Sari Sari stores are, in my opinion another business for dreamers, and for family buy offs! And you are correct, the money is never available for re-stocking! Then they have another reason to ask for money!
Hi Scott – Welllll….. lap dancing can be quite lucrative!
Hey Boys ! I got a sure fire business plan, now we are in the money !!!
1. Peter can drive the jeepney.
2. I can be the Barker and dance about and shout to get the passengers on board.
3. Tom can be the fare collector [ and here is the clever bit ] he can also sell his bulad to the passengers at the same time.
I know the plan cannot fail but if it does we can always dig for Yamashita’s gold.
Scott
Oh thanks Scott, so I am the driver huh ? I wanted to be the shouter for bulad !
Hey Scott!!! I am quite upset. You didn’t give me any job in the venture!
I don’t think any transportation business will be good, especially if you’re leasing to drivers, unless you’re driving the vehicles yourself. The leasing drivers are not going to be as compassionate to the vehicles as the owners. I’d stay out of the transportation business unless I’m driving the vehicle or I pay someone a straight salary to do it. It’s just not very profitable.
Hi Julius – I agree. Taxis, jeepneys, tricycles… all of these are losing businesses. I know about the tricycles – I used to own 6 of them and rented them out daily. I made a small amount of money on them, but the hassle factor really made the business impractical.
I have a jeepney and a internet cafe here in the philippines. I guess I must be luckier than most. My Drivers have been the best on my jeepney and keep it running nice. They both here on there coding day and working on it. Personnaly even though I make more money in cafe than jeep I would prefer a fleet of jeepney’s if I can find more drivers like the ones i have now. My cafe takes up to much of my time. My drivers take care of everything on jeepney….
Hi Kirk – I’m happy to know that the Jeepney business has worked out well for you! I have known several expats who have gone into that business, and usually failed. I know one or two who have found some success, and now it seem that you are joining the list! Good luck to you!
Hi Bob,
What kind of buisiness can you sugest in Davao City for a foregner. My wife is from davao
we were planing to buy a multycab you know just to rent it planing for future return to davao,
but after what i read here i’m gonna think 2 times before investing that money.
Hi joe – It just depends on what your passion is, and what you enjoy. There are lots of businesses that will do well here. I have written a book called “49 Ways to earn a living in the Philippines” that might help you with the search. You can find the book here.
hello sir how r u hope you fine i am from pakistan i was also plan to buy a jeepny in davao so when i saw your website then i am upset and little disopinte i want to jeepny business so what is my perfomes in start what i do whats the frist step if i buy jeepny then can i register my name only or not and can i make clean profit like 600pesos per day clean profit like a 5000usd jeepny per each plz reply
best regard
munaf