Monday, August 07, 2006

Living with dinosaurs of transport

Transport has gone to the dogs - impending rise in the fares of buses and trains, albeit by an average of 2 cents, has set tongues wagging and pens sliding across paper (or in today's case keyboard clacking). This increase comes on the heels of a more substantial rise in the prices of taxi services just two weeks ago and gives one the feeling that cost of living is rising in Singapore, albeit on the heels of rising oil prices, something that is beyond the control of even the Singapore government. However, the LTA has seen fit to jump into the bandwagon by planning to increase the ERP charges in the name of optimizing the usage of roads, whatever that means. This will have a direct effect on raising yet again the cost of all classes of transportation, including taxis, and squeezing yet further the scarcity of taxis in certain parts of Singapore. I have the feeling that LTA sees itself as Gods of the road in Singapore, which it may very well be, but then the Gods can be crazy. It seems that mr brown has hit the nail on the head in his commentary in Today a few weeks ago. Unfortunately, that same article also cut short his column in the same paper. There are some parties who refuse to acknowledge the fact of rising cost of living.

So the island now is abuzz about transport costs, a perennial issue. People are complaining that there is no real competition, so prices rise in unison among the transport providers. Even taxis, where more operators exist, sing the same tune when it comes to pricing their taxi services. There is nothing much you can do about this if providers do not see it in their interest to compete on price. Must we accept this? Is there no other alternative?

Well, actually, there is. Private car owners can use them to ferry passengers and charge for the service. Since these private car owners do not have to pay a monthly rental fee to an operator, they can charge lower prices for their services. This will benefit consumers, as it will force erstwhile organised taxi operators to match the price or provide a premium service at prices they currently charge or go out of business. This is how a free market is supposed to work. But in Singapore, this is a pipe dream. Is the government doing all it can to improve transportation, especially cost-wise? The answer obviously is no. It is more interested in maintaining the status quo and occasionaly tweaking it because it has an interest in sustaining a system that it created (which of course must be ideal, otherwise it wouldn't have been created in the first place?).

Asking the LTA to think out of the box is like asking a dog to give up dog food - impossible. This is somewhat like the malady that a famous Harvard don called the innovation dilemma in the book of the same name.

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