Premium bus service SBS 564 - not so premium after all?

SBS Transit buses.
SBS Transit buses. PHOTO: ST FILE

ONE morning last week, a seemingly trivial thing happened to a dozen people when they were on their way to work.

When their bus - Premium Service 564 - pulled up at their stop in Holland Road, they expected cool relief to the muggy heat and a fairly comfortable seated journey to their respective workplaces.

But to their consternation, the driver told them that the bus could accommodate only six of them. The bus company, SBS Transit, had switched to a 30-seater instead of the usual 46-seater.

Since no standing is allowed on premium buses, half of those who were hoping to board could not. But they boarded anyway.

The driver called the control centre for assistance in what was obviously becoming an awkward situation. The voice on the other end said that those standing had to disembark.

After what seemed like a long stand-off, those standing got off the bus in a huff. The minor fracas probably left them late for work, as that premium service runs only once a day.

The alternative was a normal bus service that takes a much longer route. And taxis are hard to come by in the morning peak.

Some of the commuters who were affected were so upset that they refused to board when Service 564 pulled up the next morning.

On the surface, the whole saga seemed insignificant, unworthy of the column-centimetres devoted to it in newspapers, and the hundreds of comments made on social media. But actually, it is a bigger issue - one that exposes the perennial tension between public good and private profitability - something that has characterised our public transport system for decades.

In the bus sector, operators SBS Transit and SMRT have to meet the Public Transport Council's universal service obligation, which states that everyone should have a bus service within 400m, even if the service is unprofitable. (In reality, this is not strictly adhered to, as folk who live or work in remote parts of the island will attest.)

The two operators do not receive upfront subsidies, but are exempted from levies such as certificate of entitlement, additional registration fee and diesel duty.

They almost always get annual fare increases, but have to set aside sizeable budgets for asset replacement.

To be profitable, they have to be efficient. And in the case of Service 564, it can be argued that SBS Transit was merely being efficient.

The regulatory framework allows operators of premium bus services to decide for themselves what capacity buses to deploy.

So, obviously, they will deploy the smallest possible bus, as bigger vehicles will cost more to buy and incur higher running costs.

SBS Transit says the average occupancy of Service 564 is 35, which is why it switched to 35-seaters when its older 46-seaters were scrapped.

Now, average means there are times when there are fewer passengers, and also days when there are more.

As a matter of principle and policy, a public transport operator should in fact cater to peak demand. Average is not good enough. Because public transport commuters largely do not have a choice but to take public transport.

On the other hand, transport operators are private entities answerable to their shareholders. They have to juggle opposing objectives, often ending up with compromises that leave neither side satisfied.

Because of this obvious conflict - which has resulted in service shortfalls, from long waits to packed buses - Singapore has chosen to overhaul its bus industry.

Under its nascent government contracting scheme, transport operators compete with each other to secure the right to run a package of bus routes for a fixed period of time.

The one with the most compelling proposal that meets clearly spelt out service standards wins - provided the value of its bid is relatively competitive.

Under this operating model, the Government collects and keeps fare revenue. Free from revenue risks, operators can then focus solely on meeting service standards.

The first tender, for a route package in the west, is expected to be awarded shortly. The second tender, for routes in the north-east, has just been called.

It should not take long for the entire public bus sector to move over to this new regime. The incumbents will do so when their current operating licences expire in August next year. They will be given nine route parcels to run up till 2021. Thereafter, they will have to compete to secure future parcels.

Alas, incidents such as the one faced by Service 564 passengers may still arise. Because premium bus service is not deemed a "basic service", along with services such as Nite Owl, Parks, Chinatown Direct and Bus-Plus.

For consistency and clarity, the Government should include these so-called non-basic services in the contracting regime. In other words, if we want to resolve the public good-private profitability conflict, we should do it completely. For it would be strange, indeed, if commuters of normal bus services enjoy predictability, while premium bus customers do not.