Why school bus operators want their monthly fees

Of late there were news reports about parents’ unwillingness to pay school bus operators during the movement control order period. The reason given was school bus operators do not provide transport services while schools remain closed and that since there is no service provided there is no need to pay the fee.

This is a misconception.

Many regard this school break as huge savings for school bus operators without realising or understanding their existing financial obligations.

As a school bus operator, it is disheartening to hear comments from parent groups, consumer right activists, and even ministers, proposing to deny school bus operators and drivers their rights to earn a living through the collection of monthly fees from customers. The calls for school bus operators to stop collecting fees from parents is akin to putting the school bus industry into a coffin, killing the industry and must be prevented.

Efforts by certain quarters of the public to lobby and pressure the transport ministry to issue a directive to school bus operators to stop collecting fees is absurd as it goes against the liberalisation policy introduced by the government way back in 2014. This lopsided proposal if implemented may see the school bus industry going backwards as it hinders the progress of school bus companies.

The nature of the school bus business

School buses are not touch-and-go businesses like taxis or commuter buses. It is a business based on long-term commitments, giving assurance and standing-by to take kids to school at a specific time throughout the schooling period.

Those in the business can be considered as being full-time all year round ever-ready to pick children to and from schools safely and in timely manner. Unlike most other means of transport, a typical day for a school bus driver is regular trips with regular kids at hand, and this relationship may last several years as the kids grow up from kindergarten to high school and it is unique only to the school bus business.

Traditionally, many school bus operators started off as a small family business with the owner-cum-driver setup. The business would gradually grow to include siblings in running the operations. By far, this can be said to be the most common set-up within the school bus industry today.

Nonetheless, some operations have grown to become big corporate companies employing a number of people to do the job. Gone were the days where bus drivers were mere part-timers driving children to earn extra income for living. Most are now professionals, working full-time on their own or for school bus companies.

The contract for services

Parents must realise that upon engaging a school bus operator, they are actually entering into a contract for services, normally for a period of a year. The terms of the contract for service is normally stated in the school bus pay card or enrolment forms filled by parents. Under the terms of this contract, the parent agrees to pay and school bus operator agrees to provide transport services as per agreed schedule. Among the key points in the contract is to pay the monthly bill until the end of the year.

School bus operators would normally work out their yearly budget, resources planning and scheduling based on the number of contracts for the forthcoming year. This involves a lot of preparation and detailed planning to ensure the transport of students goes smoothly and safely. They even go to the extent of reserving seats for your kids.

The need for parents to pay up

School bus operators depend solely on fees collected from parents to pay for fixed operating costs like administration staff and drivers salaries, office or depot rent, vehicle loan repayment, insurance and road taxes among others. These dues are paid monthly even when schools are closed. It will be naive to conclude school bus operators have no financial commitment during school holidays.

Furthermore, as responsible employers, school bus operators abide by government rulings, specifically the human resources ministry that all employers are to pay full workers’ salary during MCO and not force the workers to use their annual leave or unpaid leave during this period. This further justifies the need to collect all dues from parents.

Of course, there will be some cost-savings during MCO but the amount is substantially smaller than the fixed costs to be borne by operators. In most cases, whatever amount saved, the operators give back to customers through discounts.

Shortage of qualified and trained drivers in this industry warrants the utmost need for driver retention by school bus operators. It is a major cost factor for most school bus operators that must be sustained even during school off days to ensure continuity of services when school reopens later on. This factor alone among the existing overheads justify the collecting of school bus fees albeit partially is a must for school bus companies to stay in business.

Possible solutions

Needless to say, all stakeholders (parents, school bus operators, the government) to the school bus operations face financial constraints due to the Covid-19 outbreak. We believe a viable solution to this fiasco needs the contributions and sacrifices of all parties.

Government support in the form of wage subsidies, loan moratoriums or grants is most welcome although it must be reminded that such wages subsidy should at least be extended to six months to ensure continuity of the business and employment of drivers until next year.

In regards to the moratorium, it would be of immense help if this could be extended to include credit companies as well since many vehicles used by school bus operators are purchased via credit companies. It would help to ease cash-flow during this difficult time.

Additionally, if possible, the government through appointed banks should consider making interest-free micro-credit loans ‘easily and quickly’ available to registered school bus operators to help them prop-up their fast-depleting cash reserves. This is critical because a cut in cash supply may cause school bus drivers to look for other job options, which is detrimental to the industry.

We also request the government through the Ministry of Transport allow the flexibility for school bus operators to continue to request payment from customers (parents) as per their terms of the agreement. Please do not forbid school bus operators from collecting as this could be their only source to livelihood.

On the part of school bus operators, there are options to solving the problem including but not limited to:

  • School bus operators offering discounts (up to 50%) to parents
  • Deferment of monthly payments to ease parents financial burden
  • School bus operators giving temporary monthly fee waiver to those who lost their jobs.

These options are available on the table for discussion and negotiation between parents and school bus operators to strike a win-win deal to resolve this issue.

Kamal Yahya is the director of Kash Transport Services Sdn Bhd.

The views expressed are those of the author and do not necessarily reflect those of FMT.

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