Public Transport: Who should own it? Who should plan it? Who should pay for it?
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Asks why governments intervene in the public transport business. And therefore, who should plan it, who should own it, and who should pay for it? I also ask, are these technical questions or political ones? These are internationally relevant but this presentation was to a Singapore audience and uses Singapore’s public transport story for most examples. Presentation for Singapore's OTC leadership institute (10 April 2014).
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Public Transport: Who should own it? Who should plan it? Who should pay for it?
- 1. PUBLIC TRANSPORT WHO SHOULD OWN IT? WHO SHOULD PLAN IT? WHO SHOULD PAY FOR IT? PAUL BARTER 10 APRIL 2014 FOR OTC INSTITUTE
- 2. OUTLINE Why does government intervene in the public transport business? So, who should plan it, who should own it, and who should pay for it? And are these technical questions or political ones? Using Singapore’s public transport story for most examples Paul Barter, Reinventing Transport
- 3. 3 SINGAPORE NEEDS SPACE- EFFICIENT TRANSPORT from Kenworthy and Laube’s UITP Millennium database Singapore: 93.5 persons per urban hectare in 1995; and 98.5 in 2005 according to Kenworthy This is NET urban density Gross density comparisons are totally useless Paul Barter, Reinventing Transport
- 4. CARS ARE EXTREMELY SPACE CONSUMING ROAD SPACE CONSUMED BY: AFULL BUS; THE SAME PEOPLE ON BICYCLES; THE SAME PEOPLE IN CARS Paul Barter, Reinventing Transport
- 5. PUBLIC TRANSPORT IS VERY SPACE-EFFICIENT Mindboggling rail capacity through Shibuya in Tokyo Paul Barter, Reinventing Transport
- 6. Source: Vukan VuchicPaul Barter, Reinventing Transport
- 7. WHY DOES GOVERNMENT INTERVENE IN THE PUBLIC TRANSPORT BUSINESS? Paul Barter, Reinventing Transport
- 8. SINGAPORE’S BUSES PRE 1935 Singapore Traction Company (STC) - private but with statutory monopoly in urban core ‘Mosquito buses’ (1910 or so to 1935) - virtually unregulated by government Paul Barter, Reinventing Transport Source: Archives and Oral History Department Singapore
- 9. Some public transport assets are: - long lived - immobile - purpose specific - expensive to replace So large sunk costs … Hence natural barriers to entry - imagine trying to build a parallel competitor Kuala Lumpur Paul Barter, Reinventing Transport
- 10. Natural Monopoly: - Due to inherent characteristics of industry (examples: water, electricity transmission and distribution) - Monopoly a problem if it also involves market power (which allows firm to raise prices without losing sales) Conditions for market power: - Barriers to entry - Lack of close substitutes Does MRT have market power from natural monopoly? How about the old mosquito buses? SBS and SMRT bus services? Paul Barter, Reinventing Transport
- 11. SO URBAN BUSES NOT A NATURAL MONOPOLY! WHEN NOT REGULATED WE GET HUNDREDS OF SMALL BUS BUSINESSES Manila Jakarta Paul Barter, Reinventing Transport
- 12. THE MAIN BUS REGULATION OPTIONS Bus regulatory options (diagram by Paul Barter) Public monopolies Proactive planning with service contracts Well- regulated Franchises Passive franchises Deregulation Government takes much responsibility Government takes little responsibility Notice that there are many ways to organize urban bus industries! Bus regulation options include deregulation (buses not a natural monopoly) The options for urban rail are more limited Paul Barter, Reinventing Transport
- 13. SINGAPORE’S BUSES PRE 1935 Singapore Traction Company (STC) - private but with statutory monopoly in urban core ‘Mosquito buses’ (1910 or so to 1935) - virtually unregulated by government Paul Barter, Reinventing Transport Source: Archives and Oral History Department Singapore Bus regulatory options (diagram by Paul Barter)
- 14. SO GOVERNMENTS OFTEN ERECT BARRIERS TO ENTRY FOR BUS SERVICES But why? Bogor Paul Barter, Reinventing Transport
- 15. MAYBE BECAUSE A PUBLIC GOOD? EXCEPT THAT PUBLIC TRANSPORT IS NOT A PUBLIC GOOD! (Easily) Excludable Yes No Subtractable (or rivalrous) Yes Private Goods Common- Pool Resources No Club Goods (or ‘toll goods’ or ‘low-congestion goods’) Public Goods Paul Barter, Reinventing Transport
- 16. STRATEGIC IMPORTANCE? Yes, too important to risk failure MRT - and a strong bus system to go with it - are both essential because 1971 Concept Plan calls for strong city centre and dense transit-based corridors Paul Barter, Reinventing Transport
- 17. MAYBE BECAUSE IT IS A BASIC NECESSITY? Yes, this is another reason (although what would happen if we had almost no public transport? – consider Hanoi for example) Politics of prices is hot when a good is a basic need But there is another very important set of reasons that governments intervene Penang Paul Barter, Reinventing Transport
- 18. PROBLEMS WITH DEREGULATED BUS INDUSTRIES Even with real competition, service is often poor and not comprehensive: - Excess service on busy corridors/busy times - Neglect of other corridors/quiet times - racing and dangerous behaviour - waiting to fill at terminals and busy stops But real competition often doesn’t last: - mafia-based barriers to entry - or dominant player in each market (UK) - still neglect unprofitable routes and times Paul Barter, Reinventing Transport
- 19. SINGAPORE’S BUSES 1935 - 1973 Ten ‘Chinese’ companies (1935-1970) – route monopolies with fare regulation but weak and little-enforced service obligations (“passive franchises”) Pirate taxis (especially in 1960s and 70s) - illegal, unregulated Three consortia (1970-1973) - merged but still under “passive franchise” Paul Barter, Reinventing Transport A Changi Bus Company Limited bus. Image credit: Yeo Hong Eng (via http://wwwyeohongeng.blogspot.sg/2012/11/buses-of-singapore-in-50s-60s-and-70s.html)
- 20. IMPORTANCE OF REGULAR, FREQUENT SERVICE Hanoi bus reforms (relative) success story Regular service (10 min headway) transformed demand for buses in city of motorcycles Hanoi Paul Barter, Reinventing Transport
- 21. IMPORTANCE OF COMPREHENSIVE SERVICE Regular service from early morning until late evening) Decent service to all parts of the metropolitan area Paul Barter, Reinventing Transport
- 22. SINGAPORE’S BUSES 1973 - 2008 1973 - : SBS regulated bus monopoly 1982 - : SBS and TIBS (now SMRT) • monopolies serving distinct regions • regulated by Government • Fare regulation (balanced) • Quality of Service Standards • PTC approved route change requests Successful for almost 4 decades But not adequate now? Paul Barter, Reinventing Transport
- 23. IMPORTANCE OF A UNIFIED NETWORK (‘INTEGRATION’) MRT very important but still needs help from buses Can’t provide a direct service for every trip Need easy and free connections/transfers Paul Barter, Reinventing Transport
- 24. SINGAPORE UNIFIED NETWORK EFFORTS Service obligations (QoS standards) Bus interchanges at MRT Common ticketing and info Free transfers (via distance-based fares) Covered walkways etc But more ambitious connective network is difficult with existing regulation approach Paul Barter, Reinventing Transport Woodlands: bus interchange directly below MRT station (Image credit: Flickr user xcode)
- 25. PUBLIC TRANSPORT SPEED VIA HIGH FREQUENCIES Good to improve public transport vehicle speeds on roads But speed for users ALSO depends on high frequency of service to reduce waiting times Paul Barter, Reinventing Transport
- 26. ‘CONNECTIVE’ VERSUS ‘DIRECT’ PUBLIC TRANSPORT NETWORKS • More frequent with SAME resources • Connections a feature not a bug • Lower travel time, despite connections • Simpler network: easily understood and remembered Connective Network achieves Based on a diagram in “Human Transit” by Jarrett WalkerPaul Barter, Reinventing Transport
- 27. SINGAPORE’S BUS NETWORK IS COMPLEX WITH NUMEROUS OVERLAPPING ROUTE SEGMENTS Difficult to convey on a map Bus congestion problem if we boost frequencies much more Paul Barter, Reinventing Transport
- 28. SEOUL’S 2004 ‘SEMI-PUBLIC’ BUS REFORMS PUBLIC CONTROL, PRIVATE PROVISION SUITS AMBITIOUS INTEGRATION Source: Kim, GC 2007 with permission Paul Barter, Reinventing Transport
- 29. SIMPLE GRID-LIKE NETWORK(VIENNAEXAMPLE) - ONE MAP CAN SHOW ALL METRO, TRAM AND BUS LINES - FEW PLACES WITH OVERLAPPING SERVICES Paul Barter, Reinventing Transport
- 30. VIENNA EXAMPLE OF REGULAR, ALL-DAY, FREQUENT SERVICE Paul Barter, Reinventing Transport
- 31. EXAMPLE: COPENHAGEN’S “A BUSES” Bus funding cut Rather than reduce frequencies, decided to simplify network New high-frequency “A-Buses” • simple routes, high brand profile, part of ‘mass transit’ • 3-5 minute headways all day (10 min very early am, very late pm) • Other routes complement/feed both A-bus and metro Paul Barter, Reinventing Transport
- 32. Simpler, connective network Bus headways need to be shorter Waiting time is huge influence on passenger trip speed Connective network forces more transfers Short headways make transfers less painful Simpler network enables shorter headways! Paul Barter, Reinventing Transport This is the unpopular bit!
- 33. SO, WHO SHOULD PLAN IT, WHO SHOULD OWN IT, WHO SHOULD PAY FOR IT? NOW WE CAN THINK ABOUT THESE QUESTIONS Paul Barter, Reinventing Transport
- 34. Singapore does seek a more ‘connective’ or integrated network (gradually) 2007 review critical of half-hearted integration So LTMP 2008 embraced integrated hub-spoke network Does this goal require changes in how the industry is organised and regulated? Paul Barter, Reinventing Transport
- 35. THE REGULATION OPTIONS EACH HAVE DIFFERENT INTEGRATION POSSIBILITIES Bus regulatory options (diagram by Paul Barter) Public monopolies Proactive planning with service contracts Well- regulated Franchises Passive franchises Deregulation Government takes much responsibility for outcomes Compatible with ambitious integration & connective network Government takes little responsibility for outcomes Incompatible with integration Paul Barter, Reinventing Transport
- 36. SINGAPORE’S BUSES SINCE 2008 AND LOOKING AHEAD Elimination of transfer penalty (distance fares) LTA took over bus line planning Towards competitive tendering? Moving to the left on the diagram (more government planning and responsibility) How far will we go and how fast? Paul Barter, Reinventing Transport
- 37. THE REGULATION OPTIONS ALSO EACH HAVE DIFFERENT COMPETITION/OWNERSHIP POSSIBILITIES Bus regulatory options (diagram by Paul Barter) Public monopolies Proactive planning with service contracts Well- regulated Franchises Passive franchises Deregulation Government takes much responsibility for outcomes Compatible with ambitious integration & connective network Government takes little responsibility for outcomes Incompatible with integration Competition “for the market” Competition “in the market” Paul Barter, Reinventing Transport Which of these two do you like better? In house with only limited outsourcing
- 38. INTERNATIONAL EXAMPLES Bus regulatory options (diagram by Paul Barter) Public monopolies Proactive planning with service contracts Well- regulated Franchises Passive franchises Deregulation Paul Barter, Reinventing Transport Most USA cities Many northern European and Australian cities Seoul 2004 Bogotá Transmilenio BRT Singapore 1935 Singapore 1973 UK outside London Santiago 1973 Sri Lanka 1990s Many developing cities HK public light buses Many developing citiesHK franchised buses
- 39. WHO SHOULD PAY FOR IT? Payments by users (fares) Taxpayers Other beneficiaries Capital versus operations … is it an important distinction here? Is the right balance among these a technical question or a political one? Source: wikimedia commons (http://upload.wikimedia.org/wikipedia/commons/6/61/Thales_ticket_barriers,_Dhoby_Ghaut_MRT_Station,_Singapore_-_20051231.jpg) Paul Barter, Reinventing Transport
- 40. SINGAPORE FUNDING AND FARE-SETTING MRT investment from general government revenue MRT operations from fares Fare setting must be both “affordable” and fund adequate operations But in most rich cities around the world, even operation costs come from a mix of taxation sources and fares Paul Barter, Reinventing Transport Originally from http://www.lta.gov.sg/projects/proj_maps_rail_l.htm
- 41. FUNDING SOURCES THAT TARGET ‘OTHER BENEFICIARIES’ (BEYONDFARES AND GENERALTAXES) Station Air Rights (Hong Kong) Land Value Capture (Hong Kong, Los Angeles, Miami, others) Road charges (such as London congestion charge) Advertising (many including Singapore) Parking fees (San Francisco and others) Parking Levies (Perth) Employee Levy (France, Portland) Fuel Taxes (many cities, including Seoul, Bogotá) Vehicle Levy (Stockholm, many Canadian cities) Paul Barter, Reinventing Transport This list is adapted from one by Todd Litman
- 42. OBJECTIVES OF FARE SETTING MAY INCLUDE … Generate revenue to pay for operations and …? Attract (the right number of) passengers in line with vision for the city And others, including: • Helping special groups (aged, people with disabilities, very low- income, etc) • Improving access to certain areas • Specific travel behaviour shifts • etc Paul Barter, Reinventing Transport
- 43. THE REGULATION OPTIONS EACH HAVE DIFFERENT FUNDING AND FARE-SETTING POSSIBILITIES Bus regulatory options (diagram by Paul Barter) Public monopolies Proactive planning with service contracts Well- regulated Franchises Passive franchises Deregulation Government takes much responsibility for outcomes Compatible with ambitious integration & connective network Government takes little responsibility for outcomes Incompatible with integration Competition for the market possible Competition in the market only Paul Barter, Reinventing Transport Taxpayer and beneficiary operational funding possible too Operational funding by fares
- 44. TOWARDS A LONDON/SCANDINAVIAN/SEOUL MODEL FOR SINGAPORE?(I WOULD LIKE TO SEE THIS) LTA plans bus lines AND schedules Procures service from operators (competitive tendering) LTA gets fare revenue and pays operators for service (LTA takes revenue risk) Compatible with setting an ambitious vision for public transport London. Photo by David Hawgood and licensed for reuse under this Creative Commons Licence Paul Barter, Reinventing Transport