The newspaper reported today that transport fares in Singapore are likely to go up again.
I wonder if the recent decision by the transport companies to raise the salaries of their drivers has any part to do with the fare increase. Perhaps the increasing costs of doing business or fuel are part of the reasons as well. As usual, there were lots of complaints from the public. And the most common one is that the operators should not be allowed to increase fares when the level of service provided is unsatisfactory. Trains still break down, although maybe slightly less often now. The trains are still as crowded. Buses waiting time is not improving, based on my experience. Put it another way, some commuters do not mind the increase as long as there is a corresponding improvement in the level of service provided by the transport companies. The transport industry in Singapore is a duopoly one. There are only two major companies providing public transports, with the private operators complimenting the network in areas of school and tour buses, company transport, shuttle bus service, private-hire service and some premium bus service on high demand routes. But such high demand routes are regulated by the government authority and on a licensed basis. This means that even if there are high demands for certain routes, the private operators are not allowed to meet the demands without a license. Of course, the authority needs to regulate and control the number of licenses issued to private operators who want to offer premium bus service on high demand routes. This will ensure that there is enough supply while preventing everyone from competing for the same routes and leaving out other less profitable routes. The segment of public transport that sees the most competition is the taxi. However, with the sheer size of the fleet of taxis under the two major companies, the private operators can't really compete with them. Many things are regulated and the two major companies have the financial backing to compete. They are like the leaders in term of size. However, because they are so big, instead of leading the competition to see who can provide better services, they lead by increasing the cost of taking taxi. And the rest of private operators just follows. Why not? If customers are still taking taxi after the fare hike, why not just do the same and make more money. And if these two companies raise the fare because of higher fuel cost or operating expenses, the smaller ones will also faced the same problem. And perhaps more severely because they do not have economies of scale. So you got an industry with very few major competitors (not exactly competitors as they are running complimentary route services) providing a basic need that people will use it everyday as they have no other choices or limited choices. And could it be the reason why the bus operators here do not see the need offer commuter the option of changing their notes to coins like in Japan? You probably have experienced paying $2 for a bus ride that costs only $1 because you do not have coins. When there is no competition, there is no need and incentive to improve.
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May 2020
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