2nd August is Fare Hike day.

http://www.channelnewsasia.com/stories/singaporelocalnews/view/291688/1/.html

SBS Transit, SMRT ask to raise bus and train fares

SINGAPORE: Both SBS Transit and SMRT have applied to the Public Transport Council to raise bus and train fares.

SBS Transit said manpower costs – its single largest cost component – have also increased by about S$12 million during the year, while SMRT said it would lose about S$11 million due to increases in GST and employer’s CPF contributions.

This year’s increment formula, which is linked to the performance of Singapore’s economy, is capped at 1.8 percent, slightly higher than last year’s 1.7 percent.

Singapore’s CPI went up 1% last year (HERE), but fares surpassed that figure at 1.7%. MAS forecasts this years inflation to be “between 0.5 percent and 1.5 percent” (HERE) and fares are set to increase yet again at a higher rate. Transport is one of our basic necessities, and however much they would like us to believe that it is a competitive market, in reality its nothing more than a duopoly as train and bus routes do not compete directly. Duplication of bus routes is not a waste of resources as some might argue, seeing as vehicles can be added or reduced to meet the demand for a particular route with a little more planning and no loss of capital. If a provider feels that having X number of buses on this route is too many, all he has to do is shift the excess to ply somewhere else. True competition would have both companies fighting over passengers, and not them being gentlemen and carefully avoiding each other’s territory. Transport providers for once would actually do something that would try to make us want to take their buses, instead of us cussing and wishing that we had our own cars while being sandwiched during rush hour crowd. Perhaps then would we not see buses with leaky air conditioning, roaches, or enough standing room (I know seating is too much to ask for). Unfortunately, this cannot be said for the MRT lines, as stations and tracks cannot be shared as simply.

With this year’s 2 point GST increase, the 1.8% fare hike would be especially hard felt. As stated in the report, they are citing increases in GST and CPF contributions as the main reason for the hike. It’s rather justifiable if they didn’t hike the fares last year when there weren’t such increases, or if their hike kept pace with CPI inflation. How about their financials? In 2006, SBStransit had a “Profit after tax was $56.1 million, an increase of 8.9% from $51.5 million” (HERE), while SMRT had a profit after tax of $135.8 million from $103.6million (31% increase) (HERE). As a private corporation i would expect their aim to be to maximize profits, which poses the dilemma of treating a social good as a market commodity. Do i really expect them to forgo earnings to keep fares low? Well no, but perhaps they should try a little harder to maximize efficiency and ridership, i.e. more buses during peak hours so people don’t get fed up and take alternate transport or more comfortable buses to convert drivers to take public transport, rather than take the easy way out.