Regulating Public Transport Fares in Singapore - What Can We Afford?

Abstract

The setting of public transport fares has to strike a balance between commuters’ interests – particularly fare affordability – and the financial viability of public transport operators. Singapore adopted a formula-based approach to reviewing fares, while the fare formula itself was tweaked over the years to reflect the cost components of public transport more accurately. On the other hand, even if operating costs had risen, fare increases tended to create unhappiness among the public, especially if service levels were perceived to have deteriorated. This case study aims to provide an understanding of how Singapore managed public transport fares within the context of structural and regulatory changes in the public transport sector. It would also examine the issue of fare affordability for commuters and budget affordability for the government, as well as how public transport service standards were addressed. The case study would also look at the role of the fare review mechanism in light of recent changes in the bus and rail models.