Competition key to sustainable bus transport system

For Singapore's public transport system to move forward, it is crucial that we find an optimal relationship between price and service quality (Make sure bus, train fare increases are tied to service improvements; March 29).

In the public bus sector, the Government's answer to this conundrum has been to increase competition.

The Bus Contracting Model, announced in 2014, has opened up the sector to new players.

The intention is that having a competitive environment will keep operators in check and incentivise them to prioritise service quality.

Since the middle of last year, we have seen two new bus players entering the scene, namely Tower Transit and Go-Ahead.

A survey released in February by the Public Transport Council found greater satisfaction by consumers with the public bus system (Commuters happier with public transport; Feb 7).

These are early fruits of the Bus Contracting Model, and it is important that more players are encouraged to enter the market. The current four are unlikely to be sufficient for the competition to be sustainable and for diversifying risks.

Such competition may come at the expense of accepting higher yet still fairly priced bids, as new operators need to be adequately incentivised to establish their ground.

Eventually, a sound public bus ecosystem will be formed, with the diversity driven by competent and reputable operators.

Passengers will benefit the most.

Innovation and service improvement are the two trump cards for any new operator. However, such improvements may come at a cost, which will often be reflected in higher fares.

A thriving competitive environment will be the foundation of a sustainable bus transport system that benefits consumers tremendously.

Lee Der-Horng (Professor)

A version of this article appeared in the print edition of The Straits Times on April 03, 2017, with the headline 'Competition key to sustainable bus transport system'. Print Edition | Subscribe