Tuesday, July 25, 2006

Reverse gear

Cost of Transportation - http://web.naesp.org/Peak hour surcharge, surcharge for taking a taxi at Changi Airport and Singapore Expo (and God knows where else), midnight surcharge, ERP surcharges, taxi booking surcharge, and God knows what else will be invented. Now Singapore is not only known as a Fine city, it will also gain a reputation as a Surcharge city, going by the half a million tourists expected every year.

Let's not consider foreign guests. For some time now, whenever I travel on a taxi, I can never be sure that whatever I see on the taxi meter at the end of a trip is what I should pay the cabby. So, except for familiar routes I take at familiar times, I almost always have to ask the taxi driver how much I owe him, for fear of embarrassing myself for being ignorant of such simple thing as surcharges.

So when Nelson Quah, a Today reader, suggested to do away from all surcharges (except the Changi Airport one - I wonder why?), I couldn't agree more. Instead, taxi companies should adjust their fares to a level that encourages cabbies to pick one and all at all times of the day anywhere on this island. It should take a leaf out of the government's approach to GST and COEs - no exceptions, in order to keep the administration of these taxes straightforward and easy to implement. People then know exactly the cost they will incur for their actions. This will help commuters make rational decisions which will enable the market to reach equlibrium and cut off all the complaints that is now almost an issue throughout the year, and especially after the General Elections, at example of which is mr brown.

But this will probably not happen soon, as we seem to have a oligopoly situation in taxi services right now. Big businesses will not want to jeopardise their 'shareholder value' - at least not when their is no real competitor in this market. Ditto for bus services. As SMRT raises its transport fares, don't bet against SBS Transit not doing the same.

There are very few things that Singapore would fail at doing. It a country 'that works', as they say. But as far as market competition in the transport sector leading to competitive prices, it has failed abjectly. A world-class transportation it may become, but at uncompetitive prices.

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