Public Transport
Allow more competition – a laissez-faire mode of transportation environment in Singapore
The recent furore about public transport raising fares and setting of service standards highlights a starkly truth - there are no competition per se for public transportation in Singapore.
There are only two main public transport operators in Singapore. They are SBS-Transit and Singapore Mass Rapid Transit (SMRT). SBS-Transit is the major bus operator in Singapore whilst SMRT operates fewer buses.
No wonder SMRT's decision to raise fares for MRT, LRT and bus services have drawn mixed reactions from the public; some were indignant about the raise, others have resigned their fate to it.
The irony of this is SMRT has reported a 6.8 percent on-year increase in its first quarter profit for 2006! For the three months to June, it booked earnings of S$27.3 million! Revenue reached S$180.2 million from S$176.1 million.
This rather peculiar situation comes about because of little, if any, competition.
While it is true to say there are 2 ‘major’ bus companies serving the public, it is also true that they operate in different ‘turfs’; hence no direct competition. Similarly SMRT operates the North-South and East-West rail lines, whilst SBS-Transit operates the North-East line. The problem was the bus-and-rail lines were route-specific and there were no penalties if the service standards were not complied with.
Recently, the Public Transport Council (PTC) has to revise the service guidelines for public buses to help ensure they meet specific standards. PTC will monitor these standards under actual operating conditions after which up to $100,000 fines might kick in for non-compliance.
The main complaints voiced out by the bus commuters are long waiting times for buses, followed by over-crowding and long travel time to complete a bus journey.
Service standards for buses have actually been in place since 1994. Imagine the standards have in place for 12 years! PTC - until now - was powerless to do anything if the service standards were not complied with! The amendment of the PTC Act in April has given it the ‘teeth’ to enforce compliance.
However, the public transport operators cited conditions beyond their control - such as traffic congestion and bad weather which leads to delays, glitches and, of course, compromising service standards.
It is even more hilarious when both SBS-Transit and SMRT have applied for bus-and train-fare hikes amidst the bad publicity about buses’ poor service standards!
SMRT and SBS-Transit have decided to raise fares despite SMRT registering operating profits of $68.9 million in 2004 and $70 million in 2005 on its bus and MRT services! SBS-Transit enjoyed healthy operating profits, of $52.6 million (2004) and $57.15 million (2005) as well!
More than 200 years ago, Adam Smith, the Scottish philosopher and founder of economic theory, fashioned the image of the "invisible hand" to explain how myriad individual choices within a free enterprise system could lead to maximum production.
Certain activities, such as law enforcement and fire fighting, may for now need to be managed by the authorities. Not only is higher education best left to the invisible hand, but also private schools and vouchers may well be the wave of the future, from pre-school through high school.
Similarly, public transportation can be given over to the ‘invisible’ hand, as happened with Amtrak and the railroads in Britain.
The failure to recognize that a laissez-faire economy will benefit all commuters is alarming. The "laws" of supply and demand will lift public transportation to their highest and best use, without the aid of human intervention. Multiple modes of transport, with multiple private operators will serve Singapore’s commuters best. Such a model may have failed us in the 1950’s and 60’s but we are entering a different era now. An example of country with efficient and effective transport network is Hong Kong.
Public transportation there is cheap, fast, widely used and generally efficient. The bus system is extensive and I have experienced, first hand, ultra-modern Mass Transit Railway (MTR) that runs every 1 or 2 minutes even in ‘off-peak’ hours! Hong Kong’s myriad of private buses, mini-buses, trams and taxis ply the road to make Hong Kong one of the easiest cities to get around in!
Only a wide mix of transport operators that work ‘hand-in-hand’ will serves the commuters’ interest best, not to mention – ‘pockets’ best as well. And I believe no amount of enforcement rules nor fines will raise transport operators’ service standards substantially when there are but a ‘handful’ of operators in the market. Perhaps we should move on, move out, towards a ‘faster-moving’ transportation system, rather than a ‘huffing and puffing’ one!
The recent furore about public transport raising fares and setting of service standards highlights a starkly truth - there are no competition per se for public transportation in Singapore.
There are only two main public transport operators in Singapore. They are SBS-Transit and Singapore Mass Rapid Transit (SMRT). SBS-Transit is the major bus operator in Singapore whilst SMRT operates fewer buses.
No wonder SMRT's decision to raise fares for MRT, LRT and bus services have drawn mixed reactions from the public; some were indignant about the raise, others have resigned their fate to it.
The irony of this is SMRT has reported a 6.8 percent on-year increase in its first quarter profit for 2006! For the three months to June, it booked earnings of S$27.3 million! Revenue reached S$180.2 million from S$176.1 million.
This rather peculiar situation comes about because of little, if any, competition.
While it is true to say there are 2 ‘major’ bus companies serving the public, it is also true that they operate in different ‘turfs’; hence no direct competition. Similarly SMRT operates the North-South and East-West rail lines, whilst SBS-Transit operates the North-East line. The problem was the bus-and-rail lines were route-specific and there were no penalties if the service standards were not complied with.
Recently, the Public Transport Council (PTC) has to revise the service guidelines for public buses to help ensure they meet specific standards. PTC will monitor these standards under actual operating conditions after which up to $100,000 fines might kick in for non-compliance.
The main complaints voiced out by the bus commuters are long waiting times for buses, followed by over-crowding and long travel time to complete a bus journey.
Service standards for buses have actually been in place since 1994. Imagine the standards have in place for 12 years! PTC - until now - was powerless to do anything if the service standards were not complied with! The amendment of the PTC Act in April has given it the ‘teeth’ to enforce compliance.
However, the public transport operators cited conditions beyond their control - such as traffic congestion and bad weather which leads to delays, glitches and, of course, compromising service standards.
It is even more hilarious when both SBS-Transit and SMRT have applied for bus-and train-fare hikes amidst the bad publicity about buses’ poor service standards!
SMRT and SBS-Transit have decided to raise fares despite SMRT registering operating profits of $68.9 million in 2004 and $70 million in 2005 on its bus and MRT services! SBS-Transit enjoyed healthy operating profits, of $52.6 million (2004) and $57.15 million (2005) as well!
More than 200 years ago, Adam Smith, the Scottish philosopher and founder of economic theory, fashioned the image of the "invisible hand" to explain how myriad individual choices within a free enterprise system could lead to maximum production.
Certain activities, such as law enforcement and fire fighting, may for now need to be managed by the authorities. Not only is higher education best left to the invisible hand, but also private schools and vouchers may well be the wave of the future, from pre-school through high school.
Similarly, public transportation can be given over to the ‘invisible’ hand, as happened with Amtrak and the railroads in Britain.
The failure to recognize that a laissez-faire economy will benefit all commuters is alarming. The "laws" of supply and demand will lift public transportation to their highest and best use, without the aid of human intervention. Multiple modes of transport, with multiple private operators will serve Singapore’s commuters best. Such a model may have failed us in the 1950’s and 60’s but we are entering a different era now. An example of country with efficient and effective transport network is Hong Kong.
Public transportation there is cheap, fast, widely used and generally efficient. The bus system is extensive and I have experienced, first hand, ultra-modern Mass Transit Railway (MTR) that runs every 1 or 2 minutes even in ‘off-peak’ hours! Hong Kong’s myriad of private buses, mini-buses, trams and taxis ply the road to make Hong Kong one of the easiest cities to get around in!
Only a wide mix of transport operators that work ‘hand-in-hand’ will serves the commuters’ interest best, not to mention – ‘pockets’ best as well. And I believe no amount of enforcement rules nor fines will raise transport operators’ service standards substantially when there are but a ‘handful’ of operators in the market. Perhaps we should move on, move out, towards a ‘faster-moving’ transportation system, rather than a ‘huffing and puffing’ one!
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