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Let market forces rule in express bus industry

Let market forces rule in express bus industry

By Y S CHAN

NADICORP Holdings Bhd executive chairman Tan Sri Dr Mohd Nadzmi Mohd Salleh has called on the government to reconsider allowing bus operators to gradually increase bus fares in order to cope with rising costs and maintain service quality.

The government had approved a fare increase of 22.6 per cent for express buses in March last year, but withdrew it before it could be implemented.

Nadzmi feels the government should increase fares gradually to support the industry, citing some of our neighbouring countries have small increases over shorter periods of time.

If express bus fares continue to be frozen, it is a matter of time before services are affected and passengers’ safety compromised if operators start cutting corners to stay afloat. They will not be able to replace their aging fleet with new buses as banks will not finance loss-making business.

But announcing just one fare increase is already a tall order for the Land Public Transport Commission (SPAD), what more with several.

The local public is likely to react with fury each time a fare increase is announced as they are not used to repeated increases. The last fare increase for express buses was done in 2008.

A more practical and long term solution is to deregulate express bus fares.

Some operators may immediately increase fares hoping for a rise in revenue, while others will get the same result from higher passenger load by maintaining or lowering fares.

Introducing real competition among the 260 operators can only make Malaysia’s express bus industry
better. Passengers will benefit when they have a choice of ultra-luxury coaches or no-frills buses.

SPAD need only to ensure there are no monopolies or cartels for price fixing that works against public interests.

A central information board can display all fares for comparison at the bus station and also available online.

Express bus services should strictly be left to market forces, with no controls or subsidies on fares, fuel and operations.

On the other hand, stage buses must be regulated to ensure they run according to schedules as many of their routes are unprofitable but provide a much-needed public service.

To ensure that fares are affordable and services sustainable, subsidies given to stage bus companies ought to be continued or increased if necessary.

As for express buses, their fares should be determined by market forces, similar to what excursion and factory buses have experienced for years.

The deregulation of school bus fares from January 2015 was a masterstroke by SPAD, which can be applied to express buses in 2016.

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