Monday, August 1, 2011

Why “Cherry-Picking” Is Good For Commuters

Date: 1 August 2011

Transport Minister Lui Tuck Yew argues that the National Solidarity Party’s proposal for more competition in bus services would lead to “cherry-picking” of lucrative routes by multiple operators and hence be negative for commuters.

Lucrative routes are lucrative because demand is high, and more commuters are packed into each bus. “Cherry-picking” by multiple operators would mean more buses along these routes leading to shorter waiting times, less congestion in the buses and hence more comfortable rides, and more competitive pricing. With greater supply, these “lucrative” routes would become less lucrative. The “cherry” could swiftly turn into a “lemon”, forcing inefficient players out, and slowly turn into the common “apple”. Such is the magical fruit kingdom that boring people like me call the free market.

Meanwhile, the licence fee for the “lucrative” routes can be used to subsidize the operation of non-profitable routes, to ensure the continuation of these services.

Greater competition can lead to more differentiated services coming into the market to serve different levels of expectations. Only by better meeting the needs of the commuters can we persuade more of them to forego private cars and opt instead for public transport, thereby relieving the growing congestion on our roads. Public transport, with its higher passenger density, is a more energy efficient and hence greener mode of transport compared to private cars. Let us encourage its development in all the ways that we can.

It is disappointing to hear the same old reply from a different Minister. The political renewal that Singaporeans want to see is not just a younger Cabinet, but newer ideas and innovative approaches to problem solving.

3 comments:

  1. Tell me I am wrong...

    That 2.8% demand could be just a ploy, maybe they are actually aiming for a 1% increase, then again, I may be wrong, like 'hata' wrote earlier...

    "By using cash, fare has been increased by 10 cent. Which mean now the minimum fare to take a bus is $1.10 instead of $1.00. This is consider 10% increase.

    By using ezlink card, from 0.71cent, now has been increase to 0.73 cent (2 cent increase).

    If you go and calculate this 2 cent increase, it is actually 2.8% increase which is the maximum increase that SMRT and SBS is asking."

    Next... 10% GST... can't be helped.

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