Mr. Lui Tuck Yew mentioned that more competition within the public's transport industry could have negative implications for commuters in the long term and "cherry-picking" of lucrative routes by multiple operators could result in commuters paying higher fares. This is because SBS Transit and SMRT — run a mix of profitable and loss-making routes which they are obliged to do so under their universal service obligations.
"There is a certain amount of cross-subsidy that is taking place from the profitable routes to the non-profitable routes... if you allow cherry-picking to the profitable routes — and certainly everybody who wants to run one or two buses will want to ply on those routes — then the challenge is what happens to the non-profitable routes?"
"And in the end, would commuters end up having to pay more overall?"
The contestability of bus routes "is a very complicated issue" he added, and its impact on fares has to be studied.
- Lui Tuck YewThe point is that the Transport Ministry is the governing body. Is it that they have no control over the selection of routes. The Transport Ministry should in fact define the bus routes and then issue licenses to transport companies to operate the routes. The Transport MInistry should not allow cherry picking of the profitable routes. The Transport Ministry can set the conditions for fair play. Example, they could set a condition that out of five bus routes that a bus company runs, one must be of a non-profitable route. The Transport Ministry could also introduce incentives for bus companies that operates on the non-profitable routes. I am totally disappointed that our Transport Ministry is so helpless and useless.
With more competition, how can in the end, commuters would have to pay more overall? I really wonder whether the Minister get his logic right and did he study economics? Mr. Lui, you can tell children about your simple mushroom story but for Singaporeans who are now well educated, please do not fool us your simple and wrong logic.
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