Study by NTU ranks Singapore as second in terms of fare affordability out of 12 cities

Singapore ranked second in terms of fare affordability, across 12 major cities, which is measured as the proportion of disposable household income spent on public transport for the second quintile household group, reported the Public Transport Council (PTC) on Tuesday (23 October).

The Nanyang Technological University (NTU) was commissioned by the council to conduct an international benchmarking study to understand the latest trends in public transport fares. Under the study, Singapore’s public transport fares was benchmarked against 11 other major cities in terms of concessionary fares, fare affordability, and fare revenue per passenger kilometre.  The cities include London, Beijing, Sydney, Seoul, Paris, Hong Kong, Taipei, Toronto, New York, Tokyo and San Francisco.

To allow comparability of public transport affordability across the cities, the report noted that an index illustrating the costs incurred by a typical family with two working adults and two schoolgoing/school age children as a percentage of household disposable income was developed.

Using an average travel distance of 10 kilometres, the family’s expenditure on public transport was calculated based on the lower of the cost of sixty 10-km trips (based on the average fare of a rail and bus trip) or a monthly travel pass. Sixty 10-km trips were used to represent the number of public transport trips that each member of the family would make assuming that each made 2 trips a day, for 30 days in a month (Carruthers et al., 2005).

The index’s household disposable income was based on that of the second quintile household income group as this group is most likely to depend on public transport regularly. This is in line with PTC’s monitoring of fare affordability for the second quintile household income group, the report noted.

Source: PTC report.

The report then stated that the study found that Singapore is one of the few major cities with a fully integrated fare structure, ie. commuters are not charged additional boarding fees when making transfers in comparing fares across the 12 cities. In addition, Singapore’s concessionary bus and train fares for students and seniors, adjusted to account for differences in purchasing power, were among the lowest in the study.

The report stated that there are three basic types of fare structures. A flat fare is a fixed fare regardless of distance travelled (examples include New York and Toronto). A distance-based fare is charged based on distance travelled, which for most cities is typically a step-up fare structure where fares increase incrementally for each distance range (examples include Singapore and Seoul). A zone-based fare is charged based on the number of zones crossed (examples include Paris).

According to the report, Singapore pegged its fares to the distances travelled, and charged in a granular manner (i.e. each fare band after the initial 3.2km fare band increases in denominations of 1km) in terms of charging principles. This is a fair cost structure that charges commuters according to the distances they travel.

In addition, Singapore was one of the four cities in the study that had implemented a fully integrated public transport fare structure, where no additional boarding charge is levied on commuters making transfers between bus and train. The other three cities were New York, Seoul, and Toronto.

Together, these charging principles give commuters the flexibility to choose their preferred mode and route of travel based on their lifestyle without having to worry about additional costs, the report added.

The report also stated that Singapore’s senior citizen and student concessionary fares were also among the lowest across the 12 cities compared. In fact, the eligibility age for seniors to enjoy senior citizen concessionary fares in Singapore is one of the lowest at 60 years old, allowing more commuters to benefit from the concessionary fares from an earlier age.

Another aspect benefitting the Singapore commuter is the low fare revenue collection per passenger kilometre in Singapore, the report said.

The lowest across the 12 cities compared, Singapore only yields SGD 0.11 per passenger kilometre. If we transpose Singapore’s fare rates onto the Hong Kong and London public transport system, both cities would make a loss of $713 million and $2.16 billion in fare revenue respectively.

“While this may strike a chord with public commuters, this is not necessarily sustainable for public transport operators given the rising operating costs worldwide. In order for the Singapore public transport system to be more selfsufficient, the Public Transport Council should strike a better balance between fare affordability and cost recovery,” it noted.

Editor’s note – Why has the number of cities for comparison dropped from 36 to 12 major cites and is the university sure that Singapore’s bottom 20th percentile has such a high amount for disposable income which is more than the other stated countries.One has to note one would be earning slightly less than 2,000 (inclusive of CPF).