Thursday, October 29, 2015

Another Win for Public Transport!

Just got this fresh news! The Circle line is finally going to be a circle!


Now I no longer need to explain to foreign friends why the circle line is called so, but it isn't a circle. Okay, but that will only finally happen in 2025, but it's happening eventually!

With LTA stamping out car population growth (0.25% annual growth) and with high likelihood of completely stagnant car population (0% growth rates have been called for) and also actual declining car populations (go see the LTA stats and nerd out), you need to be quite highly delusional to expect that private cars would ever be a low-cost transport option in Singapore.

In fact, I wouldn't be surprised if more aggressive car-curbing measures come into play very soon, especially a form of "ABSD" for households with multiple cars. However, instead of cutting back on the taxes paid by the household for the first car, they would layer on additional layers of taxes for additional cars. In my view, that seems like a fair way to go about doing it. But then again, who knows?

I personally believe that expansion and investment into public transport and infrastructure is something that is highly beneficial to most people. In a sense, it is a form of transfer since rich people don't take public transport, while that is the main mode of transportation for the rest of the population. I like to think of it that expensive COEs are subsidizing my public transport experience. Of course the link is not so direct, but I guess that's how it is in a nutshell.

A large number of people would like to complain (only the 30% can do this) how shit and horrible our public transport system is. Obviously, they've never taken the tube in London or the subway in NYC. All they can do is compare with the MTR in HK, which in my personal opinion, I didn't find it substantially better than our train system. In fact, I still think that our metro experience is much better.

Moneysmart did an excellent write up about the real cost to own a car, but in 2011. While moneysmart estimated the real cost of driving a car to be approximately $1855, since then COE prices seem to have peaked in 2013, but have settled slightly higher than then, dragging up the total cost of a car along with it. I would imagine a better estimate to be $2000 a month.

(Btw, I have to pat myself on the back when I wrote my COE article back in May predicting the price drop in COE, along with the correct rationale - demand shock caused by the realalization of how unaffordable cars are right now, NOT a price drop caused by supply increase. If you look at the LTA statistics, the total car market is actually decreasing, not increasing. Another big consideration that I knew and forgot to mention is the stricter rules of car financing now as well. Although more COE is being added compared to the past recent years, more cars are de-registering and many of these owners are unwilling to buy a new car because of the large upfront payment and expensive monthly repayments.) 

If private cars continue to be astronomically priced, having a dense and efficient public transport system will benefit those who don't have a problem taking it. While some people have to budget $2000 a month for the upkeep of their cars, I can comfortably go out all and set the maximum budget of my transportation to be $120 (includes the extra cost of leisure time transportation as well, which the car cost does not include), which is the price of the monthly adult travel concession card. Of course the convenience of having a car at your beck and call at all times of the day is gone, but I think that I am willing to forgo and pocket the $1880 worth of convenience. That's very expensive convenience in my opinion.

Even if I decided to call cabs or take Uber most of the time, my monthly bill on that would be easily $1000 cheaper. Mixing up the public transport + taxi/alternatives option (23% of you are probably lost about what I'm talking about now), I will have a lot of flexibility with my transport options and can look at save at least $1000 monthly on transportation, if not, much much more.

At the end of the day, I think this will benefit the average Singaporean. I am looking forward for more train lines to open so it's easier to get around and explore the island. It's no coincidence that the immediate areas surrounding MRT stations are much more vibrant and bustling compared to other areas.

I'm still waiting for the day that we get driverless trains and 24/7 MRT service. Call me an optimist, but I see that happening in the not so distant future.

4 comments:

  1. Sorry for off-topic again, but any thoughts on Jumbo IPO? Looks interesting, their finances look quite solid. Thanks

    ReplyDelete
    Replies
    1. Hi Anon,

      Just hitting you back with a quick reply since I've been rather busy. I don't know if I have time over the weekend to check it out and post, but it does look promising. It might be the first IPO that I get!

      Delete
  2. Personally, I'm looking forward to the day we have a fleet of driverless taxis zipping around the island, that you can call on your smartphone a la Uber. If there are enough of them, personal cars could become obsolete as the driverless taxis can be cheaper and just as convenient/fast. This would also free up much-needed space as we would no longer need so many carparks where people's cars just sit idle for most of the day.

    ReplyDelete
    Replies
    1. Hi J,

      I like your imagination!

      I didn't think so far though. In my mind driverless cars would still be owned by individuals, but during idle time (perhaps working hours and night time) they can be sent to work in a pool as driverless taxis, helping to defray cost!

      I think it's definitely going to happen within the next 20 years though!

      Delete

Observe the house rules.