Premium buses hit road bump

Premium services charge a fixed fare of about $4 or $5 and guarantee a seat. Operators say the rollout of more City Direct services will affect their business, which is already seeing fewer passengers.
Premium services charge a fixed fare of about $4 or $5 and guarantee a seat. Operators say the rollout of more City Direct services will affect their business, which is already seeing fewer passengers.ST FILE PHOTO

LTA's City Direct services run express routes to the city and charge less

Premium bus services - which guarantee a seat at a fixed fare of around $4 or $5 - are losing some of their shine to City Direct services.

The Government launched City Direct services - which ply one-way express routes from housing estates to the city - about two years ago. Today, there are around 20 such services, which charge less but do not guarantee seats.

Premium bus services are run by private operators who collect fare revenue, while City Direct operators are contracted by the Land Transport Authority (LTA) at fixed tendered sums, with routes and timings planned by LTA.

In response to queries from The Straits Times, LTA said 44 premium bus services had ceased between Jan 1, 2014 and Aug 31 this year. Of these, 27 were taken over by other operators, while 17 were not replaced.

"During the same period, there were 12 new premium bus services," an LTA spokesman said, bringing the total to 99, down from 104 in 2013.

EXPERT OPINION

The two services are effectively substitute services.

I don't think commuters see the two as different from each other.

SIM UNIVERSITY SENIOR LECTURER PARK BYUNG JOON, who is not surprised that City Direct seems to be cannibalising premium bus service routes.

Operators reckon the shrinkage will be more noticeable when more City Direct services are rolled out.

Last week, the LTA announced two new City Direct services, and said extra trips will also be added to nine of the 20 existing services.

Xingsheng Transport Services operations executive Ben Chan said: "If the Government continues to grow the City Direct services, we'll see demand for premium services fall further." Fares for City Direct services, he said, were much lower, at less than $3.

Operators said the number of riders on premium services has also been falling.

Bus Hub managing director V. Anilan said passengers on his premium bus services have "more than halved in the last one year".

He has given up one route and will give up another by year's end.

Even the big boys are not spared.

ComfortDelGro said it currently operates 13 premium bus services - eight by SBS Transit and five by ComfortDelGro Bus. "This is less than half what we operated a year ago," a spokesman said.

SIM University senior lecturer Park Byung Joon said he is not surprised that City Direct seems to be cannibalising premium bus service routes. "The two services are effectively substitute services," he said. "I don't think commuters see the two as different from each other."

  • 44

    Number of premium bus services that had ceased between Jan 1, 2014 and Aug 31 this year. Of these, 27 were taken over by other operators, while 17 were not replaced.

     $4-5

    The fixed fare on premium bus services - which guarantee a seat - compared to less than $3 on City Direct services.

Commuter and bus spotter Ben Chua said: "Standing is now allowed, so I really don't see how premium these services are."

The 25-year-old administrative assistant said reliability and capacity of the premium services were also patchy. He cited Service 556 as an example. "They downsized the buses from double-deckers to coaches. Then they just withdrew it completely from June 20."

Premium bus services have been around since the 1990s, but became popular recently. Between 2008 and 2013, the number of services more than doubled from 42 to 104.

But with City Direct services, their future is less certain.

Mr Anilan said: "Even if it is not their intention, LTA has in effect been cannibalising premium bus services built by private operators over many years, with the introduction of City Direct services.

"There is conflict of interest when LTA is both authority and operator because in reality, for City Direct, LTA is the de facto operator."

The LTA spokesman said: "The provision of premium bus services is dependent on market demand and commercial considerations. This means that the bus operators do their own market research and establish their own business case."

A version of this article appeared in the print edition of The Straits Times on October 11, 2016, with the headline 'Premium buses hit bump'. Print Edition | Subscribe