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!