Tan Kin Lian's Blog: Wasteful competition

Tuesday, June 24, 2008

Wasteful competition

SMRT offers a free bus ride from Dhoby Ghaut station to Chinatown on Sundays and Public Holidays.

Why? I seems to be SMRT's way of diverting passengers from their competitor (ComfortDelgro) which operates the North East Line serving Chinatown.

Why is SMRT so wasteful, in creating unnecessary capacity? It will be better for SMRT to save this expenditure and reduce the train fares for their customers.

I hope that the Public Transport Council will disallow SMRT from raising their train fares, if they can afford to be wasteful.

6 comments:

nhyone said...: You should phrase it the other way: from Chinatown to Dhoby Ghaut station.

At first I was thinking SMRT is ferrying its passengers to NEL. Isn't that a favour to ComfortDelgro?; June 24, 2008 9:33 PM
Edwin said...: I do not think that is so. From the current public transport system, MRT and BUS operators should operate independently.

How can Train operators compete when they are only able to serve the market that is dotted along the NEL and the OLD NS-EW line?

One way for competition to happen is to have Train and Bus operators operate independent of each other.

SBS Bus transit now operates the NEL and SBS buses. There can be direct competition when bus operators are able to offer a service as an alternative to the Train system. That is what I call competition.

SBS Transit is not ready to offer greater bus services along the NEL as it would be directly cannibalizing its train services.

The way I see it, serves as a backbone of transport system in Singapore. We need a 2nd backbone, which is the buses.

Transit Link has a database of all the EZ-Link transactions. Bus transport operators should use the database to study travel patterns of passengers and offer more direct service links to their destinations.

I mentioned before, we need a transport system that operates like an airline.

Edwin; June 25, 2008 12:45 PM
siewkhim said...: Dear Kin Lian,

I don't agree that the fares will necessarily increase. Of course there will be additional expenditure. But once SMART is able to achieve its desired market share, the fares per unit passenger is likely to reduce or remains the same.

Just like insurance, the more in force policyholders you have the lower would be the policy maintenance unit cost.; June 25, 2008 4:16 PM
hongjun said...: It is almost impossible to see train and bus services to operate independently at least in Singapore. SMRT and SbsTransit are both profit-for companies and they will not give up their already invested business.

Regarding transport fares, I would be VERY surprised and shocked if transport fares are not increase at least every 2 years (or even yearly). Do you think SMRT will stop submitting proposals to up fares even though ridership has increased at record level?

hongjun; June 25, 2008 8:21 PM
Edwin said...: Loh Hon Chun you are right. It is impossible to see transport operators initiating that sort of deal.

We did not conceive that SMRT will be operating (TIBS) Buses and SBS operating Trains.

Operating a company driven by bottom lines, answerable to share holders is very different from companies that operates for a greater purpose - ie: Keeping people employed in a safe and comfortable environment, a national service for the masses... etc

If we loose focus on why you are operating an organization, there is an impossible chance for that organization to end up like NKF.

Edwin; June 26, 2008 12:46 PM
Falcon said...: I will be worried if bus and MRT fares do not increase regularly. :); June 27, 2008 3:37 PM