Shouldn’t fare adjustment take into account service level?
The issue of service quality is kept separate from the fare formula. This allows the fare review mechanism to truly reflect and address the cost changes of the operators without making the fare formula too complicated. Commuters’ interest in terms of service provision will continue to be safeguarded by existing regulatory framework for bus and train services.
If operators are making profits, why is there a need for fare
Profits are necessary for all companies, including public transport operators. Profits allow the business to be sustained into the future; for investments to be made (new buses to be bought, trains to be upgraded, etc), and for service quality to be improved. Profits are what drive companies, including the operators, to be efficient and customer-focused. The PTC wants to retain the motivation for operators to continue to improve and to be efficient, because this will best serve commuters' interests in the long run.
Nonetheless, the operators are not free to charge what they think the market can bear as the fare adjustment formula protects commuters by capping fare increases. In short, the fare adjustment formula has an in-built mechanism to cap fare adjustment, to ensure that public transport operators strive to do their best, and the benefits are shared with commuters.
Are cost increases of operators
passed on to commuters?
The fare adjustment quantum is based on a price-cap formula which is pegged to macroeconomic factors. This prevents public transport operators from passing on any of the direct cost increases to commuters indiscriminately.
Are our public transport fares affordable?
Public transport fares continue to form a small proportion of monthly household income. In fact, the public transport fare affordability indicator has improved over the years. Nonetheless, for those who need additional help with public transport fares, the Government will assist through various community-led initiatives and work support schemes under the MSF/Community Development Councils and the CCC ComCare Fund.
public transport fares be reviewed every year? Wouldn’t that mean commuters
will see higher fares year to year?
The practice of making annual fare adjustments helps ensure that fare adjustments are aligned to economic conditions. It allows fare adjustments to be made in small, regular steps to moderate the impact on commuters.
While public transport fares are reviewed annually, this does not mean commuters will see higher fares every year as the fare formula could yield a positive or negative quantum. In addition, any fare adjustment is subject to the PTC’s evaluation and based on the prevailing conditions at the time of the fare review exercise and guided by the fare review mechanism. If necessary, the PTC will exercise its flexibility to vary the fare adjustment when there are circumstances that justify it, such as adverse economic conditions.
Distance Fares was introduced in 2010 to bring about a more integrated fare structure that allows commuters to make transfers without incurring additional cost, thus offering greater choice and flexibility in how they plan their journey. Under Distance Fares, commuters travelling the same distance will pay the same fare for the same type of service, whether they travel direct or make transfers.