When will we see public transport as a public utility?

We at TRANSIT spent the weekend thinking about public transport and the public perception of public transport. We wondered why Malaysians are still stuck in the mindset that public transport is a service for the poor, which, ironically, must be provided by private companies (which does not really work), with competition to keep prices low (which does not really work) and low government interference & regulation (which does not really work).

On top of that, we would probably not be wrong in assuming that the average Malaysian supports improvements to public transport so that other people can use it … thus freeing the roads for their cars. Unfortunately, that attitude also does not really work.

(Do you sense a theme here???)

You might ask why TRANSIT has become so thoughtful this weekend. You might also ask why we haven’t made posts in such a long time but we will leave that for another post.

What inspired us was this letter by Y.S. Chan of KL which basically complains about the shift of RapidKL’s Cheras-bound bus services from the Klang Bus Stand/Jalan Sultan Mohammed bus terminal (at Pasar Seni LRT station) to the Sinar Kota bus stand.

Y.S.Chan opines that this shift is the result of “arbitary decisions” made by GLCs which are possible thanks to a lack of guidelines. Y.S. Chan also laments that direct competition from RapidKL might be the first step to putting SJ Bus out of business.

And we thought the move was just because the Klang Bus Stand was going to close as of 1 November 2011. Perhaps there is something deeper?

Bus guidelines needed (The Star)
Sunday October 23, 2011

SINCE last Saturday, something new and bizarre is taking place in the streets of Kuala Lumpur – at Jalan Tun Tan Siew Sin to be exact.

A government-linked bus company has decided to operate the Cheras route from the bus stand at Sinar Kota, which has long been used by a private bus company.

[TRANSIT: Seems like RapidKL is poaching on another company’s territory? Why should any bus company have its own “territory” anyways? Shouldn’t public spaces for public transport be in public hands?]

Cheras commuters have been happy as they can choose RapidKL buses at Central Market or SJ buses at Sinar Kota.

In a surprising move, RapidKL shifted some of their buses plying the Cheras route to Sinar Kota, with enforcement officers and auxiliary police in tow.

Such high-handed action is uncalled for as the private bus company is operating legitimately.

[TRANSIT: What is high-handed action? The shift itself? Or the enforcement officers and auxiliary police?]

It also raises the question as to what are the central roles of the Government and government-linked companies (GLCs) in business and industry.

As for public transportation, the rakyat would certainly appreciate government intervention in areas where initiative and support from the private sector are lacking.

GLCs are expected to compete fairly in the marketplace and utilise their resources wisely and not go all-out to eliminate efficient private sector players.

The Government should allow private business to thrive and nurture efficient firms. History has shown that running bus companies by government appointees has never been sustainable.

[TRANSIT: What is Y.S. Chan talking about? History has shown that private companies operating public transport in a de-regulated or unregulated environment will run the service into the ground. There are many examples worldwide, but we only need to look at KL & Penang in Malaysia!]

Entrepreneurs who are passionate about bus services run SJ successfully. They are in for the long haul and their journey includes introducing new buses with clean engines running on natural gas.

[TRANSIT: Passionate about bus services, hmmm…So do they use the pajak system? Do they pay their employees a real salary & provide them benefits? Are their drivers well-trained & uniformed?]

However, a spanner has now been thrown into the works when they are treated in a manner similar to squatters.

[TRANSIT: Public transport operators are treated as squatters because they squat on public property in front of private property. That’s why we need properly designated on-street bus stops and off-street bus hubs and staging areas.]

It will be a great loss if local expertise and capital are transferred overseas when they are much needed back home.

SJ should not be allowed to disappear into oblivion like the Toong Fong Omnibus Company Bhd that began operations in 1937, which was taken over by Intrakota until it became RapidKL after being bailed out by the Government.

Another pioneer bus company is Len Sen Omnibus Company Limited with a history dating back to 1938 and their operations had reached a level where it could be packaged and franchised to other developing countries.

As the Land Public Transport Commission (SPAD) has yet to unveil its 20-year master plan, it should include clear guidelines on the roles of GLCs and private enterprise on stage bus operations.

[TRANSIT: Look for our comments to really focus on the topic above.]

Without set policies in place, GLC appointees tend to make arbitrary decisions based on expediency, which can undermine the industry.

We should be mindful that operating a huge fleet of buses by people who do not hold a personal stake in the business can be a recipe for disaster.

However, all will be well if SPAD choose to place national interest above everything else.

[TRANSIT: Since SPAD is placing the MRT as a priority over the Public Transport Masterplan, it seems clear to us that they are placing other interests above national interests. Remember, their hands have been tied, according to Chair Syed Hamid Albar.]

Y.S. CHAN,
Kuala Lumpur.

TRANSIT Says:

Y.S. Chan is wrong about public transport and competition and GLCs, but there is something right in this letter – the lack of a clear Masterplan and clear policy for public transport. This is something that has concerned TRANSIT members and one of the reasons why TRANSIT was formed.

Indeed, some TRANSIT members have correctly noted that we have been attempting to make ad hoc “improvements” to public transport without any clear policy for over 30 years!

So before we look at the question of Malaysian government policy with respect to public transport, we have to first understand how public transport works.

First, there are two general models for public transport:

• privately focused – unregulated or deregulated and operated by private companies for profit
• publicly focused – government regulated (varying levels of regulation), with operation as a public service by publicly or privately-owned companies

Generally, history has shown us that privately-focused unregulated or deregulated models for public transport do not work very well. We have recognized that in Malaysia. And yet, we are not yet willing to make the overall shift to a publicly-focused model.

That is why Malaysia, being Malaysia, has managed to create its own “Malaysian” model for public transport – a de-regulated model with mostly private operators, with a number of government-linked companies competing with private operators to offer services.

Ladies & Gentlemen, we have the worst of both public transport worlds here in Malaysia!

And here, ladies & gentlemen, are the reasons why:

• First, we fail to understand that public transport is not a private service, but rather a public utility.
• Second, we fail to understand that public transport, by its very nature, needs regulation by the government (especially by local government) in order to work most effectively.
• And most importantly we fail to understand that the real benefits of public transport are not seen through direct competition at the micro-economic level (of individual consumers & producers) but rather at the basic macroeconomic level (of industries & economies)

Whether the service is operated by government-owned companies (like Toronto, New York and most North American cities) or contracted private companies (like London, Paris, Sydney, Melbourne & Singapore) is not very important. What matters is that most cities have embraced the model of public transport as a public utility – not as a private market or a social service.

A bit confusing? What we mean is that the benefits of public transport do not come about by saving individual bus riders money as compared to buying a car or motorcycle. The benefits of public transport come about from improved utility – things like:

• reduced congestion (which means greater productivity, reduced stress, improved health and social well-being and better economic growth);
• reduced pollution (which improves health and social well-being and increases demand in other industries – like tourism), and;
• more access to economic opportunities (which means more foreign & local investment, more innovation, social participation & economic productivity, plus a healthier society with improved social well-being).

In other words, if we could understand the role of public transport as a public utility, and then work to re-fashion public transport as a public utility, we would be on the way to a better, healthier, more vibrant society.

The problem is that we haven’t done this yet. We do not have the mindset and even when we try to make changes we do not have the clear guidelines & policy that Y.S. Chan mentioned in the letter above.

And since the government has made it clear that the MRT line is their first priority (and SPAD & Prasarana have been convinced to agree), followed by “improvements” to fix problems with existing public transport infrastructure, those holistic reforms to public transport service are not going to happen any time soon.

And that is sad, because the world is leaving us behind. Not because other cities have more MRT lines than we do (which was one of the “reasons” cited to justify the need to prioritize the MRT network), but rather, because people in other cities are coming up with innovative ideas to improve transport and improve economies and create jobs … all in one excellent & effective package.

The article below, for example, talks about an incredible opportunity for Electric Cars to create a whole new automotive industry and a whole new approach to the automobile – as a public utility rather than a privately-owned consumer good. This concept has already found its way into transport through bicycle-sharing & auto-sharing, but the Electric Car is going to break the concept wide open.

What if we saw EVs as public utilities? (The Star, 21 October 2011)

PETER GORRIE
SPECIAL TO THE STARReaders complain that I oppose electric cars.

Proof, they say, is in recent columns I wrote that focused on their costs without reference to environmental or health benefits.

“If you must return again and again to the mighty dollar, how about looking at some research that addresses the cost to our society of respiratory illness and cancer and the connection between vehicle exhaust, air pollution and disease?” one wrote this week.

“Or are you being paid to keep quiet about that?”

No cheques yet, and the truth is, I think electric cars are technological marvels — and fun.

But bigger truths are that any environmental benefit depends on the source of the electricity that propels them and, just as important, that even with clean, renewable power they’ll have no impact unless tens of millions of people drive them.

And that won’t happen if they cost substantially more than internal combustion, which is what I’ve been writing about.

While early adopters might absorb a hefty price premium, they’re blips in the market, and there’s no evidence consumers, en masse, will sacrifice financially to shift to electric vehicles.

[TRANSIT: In other words, there is no evidence that consumers will buy electric vehicles en masse. But there is evidence that consumers will happily use electric vehicles.]

Even the first Canadian to buy a Nissan Leaf told me he wouldn’t have gone through with it without the Ontario government’s $8,500 incentive.

The outlook might be brighter, though, if we expanded our approach to cars. What if, for example, we were to view them as a public utility rather than personal possessions?

The idea is already embedded in the Zipcar and AutoShare plans and BIXI bikes [TRANSIT: And the Velib bikes, the first commercially successful cycle-sharing program, which was were introduced in Paris] A new French scheme extends it to electric vehicles.

[TRANSIT: Paris, a “pioneer in all things transport” is also looking to move forward on using CargoTrams to ship freight into urban areas, with electric trucks/lorries for final distribution. Yonah Freemark comments in The Transport Politic here.]

Paris has started to test “Autolib,” in which four-seat, battery-powered vehicles called Bluecars are rented to individuals for short periods at relatively low cost.

Bluecars run on advanced lithium metal polymer batteries and are said to travel up to 250 kilometres between charges, with a top speed of 130 kilometres per hour.

Autolib participants will pay the equivalent of about $200 as an annual subscription fee and $7 per half-hour of use.

Behind Autolib is the Bolloré Group, an industrial conglomerate owned by billionaire Victor Bolloré. He aims to have 3,000 Bluecars available next summer.

(In contrast, Toronto’s AutoShare is to insert the first two electric vehicles into its fleet this fall.)

All the sharing strategies are based on the assumption that access trumps ownership for urban transportation. Why pay handsomely for a vehicle (and, then, watch its value plummet through depreciation as it spends most of its time sitting in a driveway or parking lot) when, for a minimal outlay, you could walk up the street, swipe a card and take off on your errands.

But the plans also raise questions. [TRANSIT: And skeptics. And ideas & opportunities – as does any new technology. By the way, today is the 10th anniversary of the first iPod – which was decried as being too big, too clunky & too expensive.]

— Where would the large numbers of cars be stationed if the plan succeeds?

Would carmakers embrace it? Bolloré has his own interest: His company makes the batteries and hopes Autolib will showcase them. (In addition, despite his wealth, he’s receiving substantial financial help from the governments of Paris and several suburbs.)

Other manufacturers would likely sell more electric cars with sharing than without it but their total potential market would be reduced since several drivers would use each vehicle.

— How would drivers cope with trips that are beyond electric-vehicle range? Would they buy a second vehicle – and undermine the main benefit of car sharing? Would they rent, or, more radically, accept alternatives such as improved bus or train service?

— Would our passion for car ownership cool? This is likely the highest hurdle, particularly in North America.

Autolib and other car-sharing schemes won’t solve the technical limitations of electric vehicles or, by themselves, assure mass sales.

They do, though, emphasize a good point: As we develop new technologies, we need new ways of thinking about how we use and pay for them.

TRANSIT Says:

It is a brave new world with new technologies and new approaches to how we do things. Our lives have already been changed by transformative products like the desktop computer, the mobile phone, and the most recent tablet computers, services like Google, and social tools like Facebook & Twitter. The world is rushing to embrace new technologies and the new approaches to living that these phenomenal new products are allowing us to create.