Why Singapore still needs more cars

After allowing the car population to grow at 3 per cent a year since 1990, the Government halved it to 1.5 per cent in 2009. The cap has been lowered three more times since and is now at 0.25 per cent. -- PHOTO: ST FILE
After allowing the car population to grow at 3 per cent a year since 1990, the Government halved it to 1.5 per cent in 2009. The cap has been lowered three more times since and is now at 0.25 per cent. -- PHOTO: ST FILE

When the COE system was just four years old in 1994, well-respected transport and behavioural economist Anthony Chin predicted that, in time, only top earners in Singapore would be able to afford cars.

The Government dismissed his assertion and, in the two decades since, it would seem that Professor Chin - who died last year at the age of 57 after a short illness - got it wrong.

Car ownership has been rising, not falling. By 2012, 45 per cent of households owned cars - up from less than 35 per cent when the certificate of entitlement (COE) system was introduced in 1990.

But the trend is reversing. After allowing the car population to grow at 3 per cent a year since 1990, the Government halved it to 1.5 per cent in 2009. The cap has been lowered three more times since and is now at 0.25 per cent.

And last week, Senior Minister of State for Transport Josephine Teo announced in Parliament that it is likely to go to zero per cent some time "in the future".

With Singapore's population growing, what this means is that the percentage of car-owning households will start shrinking. In fact, the contraction has already started.

Currently, it is estimated that 44 per cent of households own cars - one percentage point lower than in 2012. And when the population grows to, say, 6.9 million, that figure could go down to 35 per cent.

That is assuming the number of cars remains constant. But there are signs that the car population has been dipping, even with an allowed 0.25 per cent growth.

Last month, there were 597,152 cars on the road, the lowest number in four years.

If and when zero growth kicks in some time "in the future", the shrinkage might well accelerate. Then, the late Prof Chin's pronouncement in 1994 might ring true indeed.

It is not an unexpected outcome, though. Any pricing mechanism, taken to its logical end, will always mean the less well-to-do making way for the more well-to- do. And in any land-scarce city, it is also logical that the majority relies on public transport.

The question is: Why did we allow the car population to grow at 3 per cent per annum for 18 long years before deciding that it was not sustainable?

It is much harder to persuade someone who has been driving to give up his car than to convince him he does not need a car before he went out and bought one.

So why 3 per cent? Actually, the growth rate was pegged at just below the historical growth rate of Singapore's car population in the pre-COE days before 1990.

And it was pegged well below the foreseeable growth rate that would have resulted from rising income levels.

Here's the interesting thing, though. The actual growth rate was more than 3 per cent. Between 1991 and 2010, the car population grew by an average of 4 per cent per annum.

This was largely because the Government could not get the COE supply formula right and, for many years, dished out far more certificates than the number of cars taken off the road.

It came to a point where people who would normally buy a motorcycle decided to fork out a bit more for a car instead. One could get a new budget car for well under $30,000.

The oversupply situation was so serious that even motor traders publicly called for the COE supply to be cut.

Well, at first no one listened. Then, in 2008, former transport minister Raymond Lim announced that the allowable growth rate would be halved to 1.5 per cent.

The move also came on the back of a continued decline in public-transport ridership. The decline started in 2001 and, by 2004, ridership numbers had fallen to a seven-year low.

The blame for the turn of events - which took place despite a rising population - fell squarely on fast-growing car ownership.

And, suddenly, the tide turned. COE prices began climbing, car growth slowed and public-transport ridership began to soar (fuelled doubly by Singapore's explosive population growth).

From 2005 to last year, public-transport ridership rose by a whopping 60 per cent to 6.65 million trips a day.

Here's another question: Was the system ready for that sudden and sizeable growth? Looking back, the obvious answer would be an emphatic "no".

But the Government has been working hard since 2012 to set things right - by beefing up the bus fleet with tax revenue, and by improving the reliability and capacity of the rail network.

These plans will take time to materialise. Meanwhile, ridership growth could accelerate. The Land Transport Authority expects the number of daily public-transport trips to hit 10 million by 2020 - an additional 3.35 million, or 50 per cent, in just five more years.

By then, the operation of the Downtown Line would have been in full swing and the various measures to improve capacity on all the existing rail lines would already be in place. All the 1,000 tax-funded public buses would also have been rolled out.

They would cater to 2.5 million to three million more trips a day. Which means that in the best-case scenario - where the system is working optimally and trips across the island are evenly spread out - there would still be a shortfall of 350,000 trips a day.

Which is why we will still need cars - more cars than we have today. Some people may say bicycles and car-sharing schemes will cater to some or all of these trips, but that is too idealistic a notion.

Private cars here are used more efficiently and intensively than in other cities, going by their inordinately high annual mileage. Car owners have a propensity for trip-chaining, thus accomplishing several mobility tasks in one journey.

It is unlikely car-sharing will be a close substitute to ownership, especially when everybody wants to travel at the same time in the same direction.

Yes, an island state like Singapore cannot rely on cars for most of its mobility needs. But until its public-transport system is ready to cope, nudging people out of their cars will just cause more unhappiness than the move would ordinarily have caused. In short, timing is everything.

There is another reason - quite removed from mobility but just as valid - why a zero car growth policy is ill-conceived: It has a huge stifling effect on ambition and aspirations - perhaps, even foreign investments. Transport Minister Lui Tuck Yew himself recognised this when he said just over three years ago that he would not adopt a zero-growth policy.

With the notable exception of Hong Kong, most other leading cities have higher car ownership than Singapore's 117 per 1,000 residents. New York City is at 230, Tokyo, 260; London, 345; and Seoul, 210.

Yet, drivers in these cities use the car less than Singapore drivers, and take buses and trains far more frequently.

Some are top earners, but many others are not.


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