Transport Sustainability in Singapore: Nudging Private commuters towards Public transport

Anoj Ramasamy Sundar , Jude Agnello Alex
Department of Economics, National University of Singapore

Abstract. Transport demand in Singapore is increasing rapidly, however the land available for roads is limited. Reducing private traffic to improve transport sustainability has become a major goal for transport policy. The objective of the paper is to understand the car purchasing behavior of the private commuter. A short survey was conducted to understand why he prefers to own cars in the presence of existing Quota Management systems, and the socio-economic changes that would nudge him towards using public transport. Then policy suggestions are proposed to drive behavioral changes that would encourage public transport usage. Keywords: Singapore, Transport Sustainability, Traffic Reduction


As of February 2011, Singapore has 947,770 road vehicles including 586,267 cars, 148,115 two-wheelers, 26,195 taxis and 16,377 buses (LTA, 2011)1. With the total road length of 3,262 km, Singapore’s road density is 291 vehicles per km, a 33% growth from the 219 in 2001. Singapore leads in this area alongside HK2 (268, 2001) and London (187, 1998). The public transport system is being heavily upgraded in terms of more bus and train routes. However, in the past 10 years, car usage to work (as a % of all travel modes), has remained almost flat3 (~25%) with more commuters moving away from buses to trains. In terms of total daily tips made in Singapore, private cars still own 36% of all travel choices4. Like HK and London, Singapore faces an increasing demand for transport, constrained heavily by the limited land space. These high density metropolitan cities have to balance the allocation of their land among residence, industrial, transport and other realty demands. Thus sustainable transport has become a key policy objective in Singapore. In this context, Singapore has comprehensive Vehicle and Traffic Management systems in the form of quota based COE (Certificate of Entitlement) and ERP (Road Pricing). However, even with exorbitant COE prices and more ERP gantries, the demand for cars is far from being satisfied. The purpose of the paper is to first analyse the car affordability in Singapore and identify the marginal commuter for the Public Transport system, the passenger who has the propensity to afford his own vehicle and faces the choice between public and private modes. As seen from a survey conducted with 40 professionals, discussed in following sections, it is clear that the Income Effect is a dominant force during the car purchasing decision. A simple car affordability model is presented later based on responses from the sample survey respondents. Rather than focussing on the larger population, the paper looks into this marginal commuter and explores focussed policies which would encourage him to shift from private to public transport.

1 LTA Vehicle Stats 2 Hong Kong Census and Statistics Department, 2001. 3 Census of population 2010 - 4 Key Household Income Trends , 2007; Feb 2008; Occasional Paper on Income Statistics; Department of Statistics


Time Series on CPI and Inflation . only the top 51% (or less) of households can afford to outbid the competition. These are households and individuals who constantly face the decision to balance travel spend vs. the following distribution curve is quoted from Key Household Income This adjusted to 2007 prices6. more realistically.600/ we should either expect the affordability % to reduce from 23% to just top 9.600. Our study assumes that private transport owners spend ~15% of their income on travel based on the Household Expense Survey conducted in 2007/2008.pdf 6 Singapore Department of Statistics. than if the same trip is made by public transport.http://www.http://www. this does not exclude households outside this range to aspire and purchase a car. we also believe that if COE continues to rise and say doubles. the ideal Mean Monthly household income for a car owner > 9. Assuming consumers have a higher preference for a trip made by car. Interestingly.15 Million Resident households. This proportion further reduces due to the fact that a household could own more than 1 car. Department of Statistics (2008). based on the current COE prices and car travel spend behaviour.singstat.3% of households.704 (Category A) in 2007 January to $42. However. with 532 issued licenses out of 875 bids. households changing their spend behaviour and increasing average travel expense from 15% to 20% of their household income. where 51% of population has monthly household income above $5000.600 in 2011 March. and due to increasing influx of expat executives and foreigners with the means to afford the high COE. corresponds to ~$8623/month. The Household Expense Survey also found that 38% of households owned cars in 2007. average household income in 2010 Census5 was $7214/month (Median $5. The latest March (2011) COE bidding price for a category-A license was $42. Household expenditures and investments.2 The Marginal Commuter In Singapore’s context. Or. Since COE is a free-market bidding process and there are currently 586. Based on the above curve. that is roughly top 23% of the population. From the Car Affordability Study done by us (Section 5 Census of population 2010 .267 cars for 1.html 2 . Since the latest Income distribution figures for Singapore are not available. Even though COE has increased from $11. this 15% difference (between 38% and 23%) can be considered the Marginal commuters.

http://goo. only the top 23% of the population is expected to own a car. Since the majority of respondents were working sedentary professionals. Safety and Passion weren’t significant in this sample. Fuel Prices etc. to own a car. COE Arbitrage refers to using COE as a tradable investment instrument and is relatively a new concept which is expected to become more influential in the purchasing decision in future years. IT and Banking sector. 37 respondents were working professionals from FMCG. we don’t expect that the top 23% would give up their car ownership or reduce the usage. with households reallocating spend from aggregate household consumption goods towards travel. COE prices.1 Why do people prefer cars? Based on the responses we can conclude that for the sample population segment. main reasons for owning a car (or a private transport) is convenience –Personal and Family. discouraging car ownership but also a substitution effect. within the income bracket of ($5000. The purpose of the survey was to gain basic intuition around car purchasing decisions. Also.Of course. Currently. Except 3 final year undergraduate students. Below are some of the interesting observations. defined by us as the Marginal Commuter. Avg Car Prices. More research is needed in this area. Almost all respondents with kids viewed cars as indispensable modes of commute. increasing COE would not only have Negative Income effect. 7 Transport Survey by Anoj Sundar. The students were included in the mix just to gauge their 3 . 3 The Survey In the previous sections we discussed why with the current COE prices. Also. Client and Sales centric respondents chose cars due to the nature of their work. the bottom 49% cannot afford to own a car (due to capped car supply). Agnello Alex. A survey7 was conducted with 40 participants. nature of work wasn’t influential. 3. Thus this paper focuses on the 23-38% of the population. $8623) in 2007 prices. the above analysis excludes standard deviation and error estimates due to unavailability of distribution data of the various cost estimators –Income. COE is nontransferrable and can only be passed along with the car in the 2nd hand market. However. Other factors such as Status symbol. however. which included 21 car owners.

http://www. 3. Parking options also emerged as an important factor in influencing their purchase decision. the existing car owners were indifferent to Fare Reduction. were asked reasons for this decision. 8 LTA Master Plan Report. COE and price of the car stood out as key influencing factors. variable (or usage based) costs of ERP and Fuel prices did not seem to influence their purchasing decision.3 How can public transport usage be increased? Majority of the respondents wanted an increase in frequency and connectivity of trains and buses.html 4 .gov. who did not intend to buy a car in the next 2 years. As expected. the respondents were also asked to rank factors that would make them reconsider their decision. If COE continues to rise. Usage costs generally affect lower income households more than high income ones. 3. which is consistent with the Income Effect and their budget constraints. However.To determine demand elasticity of existing car owners. Service Quality Improvements or subsidised passes.lta. financing options could be another tool to regulate car ownership.2 What are the hurdles to car ownership? The 19 ERP has shown to influence the travel behaviour (LTA)8 in terms of avoiding congested routes and rescheduling trips. Except the high fixed cost of COE.

an average car owner in Singapore spends ~$1400/month which includes his EMI (Mortgage payment). the time value (Income Opportunity Cost) of the commuter is SGD25 per hour. For travelling from Changi to NUS during an off-peak period. Insurance etc.. We can also infer the below • • • • Private Transportation costs less at high speeds (lower time) Car transport is cheaper when passenger size is increased (since travel fare remains constant) Flat charges like ERP will discourage short commuters to take public transport By increasing efficiency. For an existing car owner to give up his private transport. a simple Car Expense model was constructed to understand the various fixed and variable costs incurred by a car owner. ERP was excluded since it is route and time specific. Opportunity cost of driving has to be higher than the public transport. Based on this. comfort and connectivity of public transport. According to LTA statistics the average time spent by a passenger using public transport is 1.7 times of that by car as of today. we can deduce that an average car household earns ~$9. safety etc.4 Car Affordability Study and Cost Benefit Analysis Based on the survey. derived from private transport. John Naisbitt observes that when people become affluent the first thing they do is to buy back some time. it is clear why private cars are preferred to public transport. In Megatrends. to incentivize the switch. privacy.7) * 25 + 40km * $0. and Usage expense –Petrol. Cost Incurred by public transport = Travel fare + Time/ hours * Salary/hour = 2 + 1 hour *25 = 27SGD Incremental Cost incurred by Private Cars = Time/ hours * Sal/hour + Variable Cost/km + Flat charges = (1/1.31/km + 0 = 27SGD After adding the higher utility from convenience. status. The last Household Expense Survey (2007/2008) found that car owners spend 14% of their monthly expense on transport.3. Assuming. people who are thinking to buy cars can be reduced (Utility effect) 5 . Parking etc.705/month. From here.

and attractive lightning works in mrt. Moscow metro is well known for its Baroque architecture and craftsmanship.To reduce congestion more train carriages can be added during the peak hours. Page 82-83 13 Source: http://www.4 Policy Recommendation Based on our earlier inferences. Page 132 11 Land Transport Master Plan. the major private vehicle users reside in Tanglin.2 Increasing the speed of public transport is not a viable solution because of traffic safety. Increase the frequency of feeder buses Currently the average frequency of feeder buses during peak hours is 12 minutes. shopping malls are located nearer to interchanges and bus stops. Increase premium buses to industrial estate Currently premium buses are operated to central business district13. We can make the public transport fun by creating designed shelters. 3. Urban Redevelopment Authority. policy recommendations are suggested to improve the commuter’s perception of public transport and to influence the travel behaviour of existing private commuters. Agencies like Housing and Development Board. artistic buses. new hubs for buses can be developed in these areas. Electronic maps to indicate the best possible public transport services to use to reach the 2. As per the LTA’s master plan of doubling the rail network by 2020. this can be further increased to industrial estates especially Jurong Island. Frequency has to be increased further to 8-10 minutes. library. Jurong Town Corporation and Land Transport Authority can work closely while planning new developments. Mandai and Newton12 . 2. 5. Integrate the public transport system Integrate all the modes of public transport system under one roof. place of worship. Bukit Timah. Since.1 Improving Public Transport Connectivity 1.2 Enhancing Travel Experience 1. so that planning can be made efficiently and full usage of the roads can be managed and used effectively. 4. Make travel more fun and connected Improving the facilities in the bus interchanges and mrt stations by providing air conditioning. Tuas and Business parks were more people go to work. internet kiosks and uninterrupted mobile access for the passengers. industrial estate. Disseminate service information through Technology Better monitoring and Advisory systems can be developed which can help in providing real time traffic and bus arrival information. An alternate solution is to introduce more point-to-point express buses and MRTs as in New York Include public transport in Urban planning Dependence of private transport can be greatly reduced when facilities like school. TUAS extension line. Car dependence in a public transport dominated city. 4. Page 6.html 6 . Thomson line and Eastern region line11 are being introduced. Reduce Travel Time with Express services The second most important reason people use cars instead of public transport is to save time.publictransport. Page 34-36 12 Census population 2010 report.10. 4. WIFI. 9 Survey Results 10 Sharon Cullinane and Kevin Cullinane(2003). Increase the capacity and Expand MRT lines Large number of private car users are discouraged by public transport because of congestion and lack of personal freedom9. these measures will reduce waiting time and in turn the travel time.

4. Along with a lower flat entry charge.) and Societal (congestion.5% we are reducing the number of cars by 2900.0% .5% which has to be decreased further to 1. Funds collected by these efforts can be used for public maintenance and welfare.) Promote Work from Home (AWS) schemes Alternate Work Schedules (AWS) has been successfully implemented in all major MNCs and government organizations in the world. Increase ridership by involving local businesses Trial is an important instrument to incentivize product switch. people become dependent on it virtually for all needs14. ERP charges15 will increase as the traffic on the road increases and vice-versa. Messages could be both individualistic (cheaper. pollution etc.3 Adding More Hurdles to car ownership and private commute 1. 2. Shaping urban traffic patterns through congestion charging(2008) 7 . Show and keep showing the benefits Campaign clearly the benefits of using public transport to all the passengers and encourage them to use public transport more. private commuters should be encouraged to try out the improvements.4 Taking the next step forward 1. received via sms services and also on the traffic information boards which will make passengers avoid more congested ridership vouchers.000 cars in Singapore when we reduce the COE licenses issued per year by 0. Car dependence in a public transport dominated city. Page 131-137 15 Daniel Albalate and Germa Bel. Salary/Bonus packages can be modified to provide $100 tax.destinations can be installed in interchanges and mrt stations. After improving the public transport experience. These electronic maps can also be made available as mobile services 4. This would not only reduce peak hour travel but also complement Singapore’s pro-Family policies. Congestion based ERP charging Installing more intelligent ERP system which will calculate the ERP charges on a road depending on the existing traffic and the maximum capacity it can accommodate. 3. This ERP charge can be indicated on the ERP gantries. Controlling the vehicle growth through VQS and improving the Public transport connectivity by increasing the capacity and express services are the key strategies which can induce Singapore residents to use more public transport rather than private transport. 3. Currently the quota for vehicle population growth is 1. Thus to reduce the private transport usage the best is to control the car ownership by reducing the COE licenses issued for each year. The strategy involves allowing employees to work from home. Regulate maximum number of cars depending on household size Introducing policies to curb the limit of maximum COE licenses issued per house hold and also increasing the COE price for new car for a household by a constant percentage which increases with every new car. there are approximately 580. faster. Control the vehicle growth via VQS Once a passenger buys a car/motor vehicle. connected etc. 14 Sharon Cullinane and Kevin Cullinane(2003). thus reducing travel effort and encouraging work-life balance.As of Feb 2011. 2.

htm Key Household Income Trends . 2007.singstat. However.lta. Feb 2008. 10. Hong Kong Census and Statistics Department.http://goo. Agnello Alex. Department of Statistics Car dependence in a public transport dominated city http://www. we also believe that an effective and sustainable policy is a “nudge” rather than “force’.5 Conclusion Reducing private traffic to improve transport sustainability has become a major goal for transport policy.html Census of population 2010 .com/science/journal/13619209 Shaping urban traffic patterns through congestion charging: What factors drive success or failure? 8 . 6. 6 References 1. In this paper we explored the key reasons why private transport is preferred and laid out policy strategies to drive behaviour changes and incentivize the switch. 2.html 7. These structural changes will ensure share of public transport increases. The existing Vehicle Quota System is a strong policy instrument for the government to control the cars on the Transport Survey by Anoj Sundar. which can be engineered through infrastructural 3.pdf LTA Master Plan Report.lta. 2001. 9. Hong Kong Transport better connectivity and perception LTA Vehicle Stats http://www. 4. 2010. Occasional Paper on Income http://www.

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