There is greater competition, which spurs innovation, but less order and control
By Han Fook Kwang, The Straits Times, 7 Oct 2012
Singapore versus Hong Kong. Which city has done better?
Of course, we all know it's not a meaningful comparison as the two are different in important areas that have affected the way their societies have developed - Singapore is multiracial and situated in South-east Asia, very different from Hong Kong's predominantly Chinese population, now part of the People's Republic of China.
But there is one area - public transport - which has come up for comparison especially now that the Singapore system has come under public pressure to improve.
On the surface, Singapore ought to do better in public transport. It has a strong government that is acknowledged for its ability to plan well ahead into the future, supported by a competent civil service able to execute the plans usually with minimum fuss.
In mass rapid transit development, the capacity to do long-range planning is an advantage as train infrastructure requires substantial investments over long pe-riods. More so if it has to be integrated with urban and public housing development, areas in which Singapore's achievements are widely acknowledged.
The same could also be said for buses and taxis - they ought to work together with the MRT to provide a comprehensive network of transport options. A city that has strong central planning capabilities should be able to do this integration well.
On paper, then, one would expect Singapore to be up there with some of the best in the world, with the MRT, buses and taxis working together to provide commuters with an efficient, reliable and affordable way to commute to and from work daily.
In many respects, it has not done too badly.
Many foreigners, in particular, and especially if they have experienced how bad it can be in other cities, often sing the praises of the system here. Trains and buses generally work, barring the occasional breakdown, and fares are affordable to most. Transport experts have also rated the system highly.
The surprising thing though is that by all accounts it is inferior to Hong Kong's.
Hong Kong correspondent Li Xueying wrote in these pages two weeks ago about how well the city's trains and buses are run.
So well in fact that almost everyone there takes public transport, including the upper middle class - accounting for 80 per cent of daily trips there, with another 10 per cent by taxi, leaving only 10 per cent by car.
In contrast, according to the Land Transport Authority's Travel Survey 2011, public transport accounts for only 57 per cent of all trips here, with 5 per cent by taxi, and 38 per cent by car - almost four times the proportion in Hong Kong.
These numbers are all the more surprising because car ownership costs are considerably higher here than in Hong Kong.
In fact, one way of looking at the current sky-high prices of certificates of entitlement (COEs) is that it shows how much motorists are prepared to pay to avoid having to take public transport. It's not a ringing endorsement of how well the trains and buses serve people's daily needs.
So what accounts for Hong Kong's impressive numbers?
Urban transportation is a complex subject involving many different areas - travel patterns in a large city are complicated and how public transport has evolved in it depends on many factors, including history, geography and politics.
Trying to pin down one factor to explain why one system is better than another is fraught with difficulties.
But, and at the risk of over-simplifying the issue, I believe the one critical difference between the two cities is the level of competition faced by transport operators, and consequently, the choices available to commuters.
In fact, the approaches taken by the two have been markedly different.
In Hong Kong, competition is much more intense between the different providers of public transport. There are five franchised bus companies operating 620 bus routes and they face competition from up to 4,350 red and green minibuses. The red ones operate freely and are not bound by fixed routes. In addition, there is a network of trams and ferries.
The one exception is in mass rapid transit, which is built and operated by the MTR.
In contrast, only two companies - SBS Transit and SMRT - run both the MRT and public buses here, and they do not really compete for commuters as they run distinct and separate routes.
When there is meaningful competition between operators, it spurs them to do better and to constantly improve services for commuters. If they don't, commuters switch to alternative modes.
In Hong Kong, there is greater duplication of services between the MTR and the buses than in Singapore because the authorities there believe that this competition will benefit commuters, resulting in better service and more affordable fares.
As a result, there is less restructuring of bus routes that run parallel to the trains than is the case here. And commuters have many more choices available.
In her article, Ms Li cited the example of a commuter living in Sha Tin, in the New Territories, who can travel to Central in three ways: by MTR, express bus or a combination of mini-bus and ferry.
Studies have shown that the introduction of the MTR resulted in the franchised bus companies being more efficiently run because of the competition that resulted.
Such a level of competitiveness is considered almost taboo here. Wouldn't it be excessive and destructive? The spectre of what took place here in the 1960s with competing bus companies and their poorly maintained buses is often invoked to support this argument.
Mini-buses running freely all over the city to collect passengers off the streets? It seems like a recipe for mayhem and chaos. Yet it works in Hong Kong.
Singapore's preference is not competition, but order and control.
It certainly isn't by chance that the two main operators here have close links to the Government.
SMRT is a Temasek-linked company, and SBS was at one time managed by a team of seconded government officers.
In fact, this approach of dealing with only trusted parties is evident in many other areas of business and public life here and reflects the Government's desire for control and order.
A competitive regime like Hong Kong's is much harder to manage because it is messier and more unpredictable. It requires a strong regulator in touch with what's happening on the ground to make sure everyone plays by the rules and that the playing field is as level as possible.
Much easier to have just a few players, and better still if they are people you know and have worked with previously.
But the downside is that there is less incentive to improve and innovate and do better than your competitor. Even the regulator might be lulled into complacency because the operators are so familiar.
So which is the better system?
The much more free-wheeling, competitive landscape in Hong Kong, or the controlled, orderly environment that is preferred here?
As Singapore decides how best to improve public transportation, this is an issue well worth studying in greater depth.
And there is really no better place to study it than Hong Kong.
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