How viable is public transport?
The switchover to a public transport system will take place only when the system is strengthened by inducting more low-fare but high quality services, apart from other measures, says L Venkatachalam
IN ORDER to reduce the possible negative impact of increasing fuel price on economic welfare of the people, the Union finance minister advised the public to utilise public transportation system (PTS) as an alternative means of transportation. I am one of those who frequently use the PTS of Chennai city which is supposed to have one of the best public transportation systems in the country. Since one happens to be a student of economics as well and have firsthand experience on the pros and cons of utilising both private mode of transportation as well as the PTS, let me just highlight some of the economic implications of the advise of the finance minister.
The advice on switching over to PTS is based on the assumption that the PTS is a perfect substitute for private mode of transportation. However, in many cases the PTS and the private mode of transportation are not perfect substitutes to each other. Take for example, PTS in Chennai city. There are three major modes of public transportation here: suburban trains, metropolitan buses and share autos. Suburban trains and other two modes are not substitutes to each other in many stretches in Chennai because the suburban trains ply only in certain stretches. Similarly, the share autos and the metro buses are not substitutes in many places since the share autos ply only in limited stretches.
In other words, the commuters in different stretches of the city do not have equal choices among different modes of transportation. Even within a particular mode of transportation, the choices are still not equitable. Take, for example, the metro buses operated by the Chennai Metropolitan Transport Corporation (MTC). In recent years, the MTC provides different types of services to the commuters, ranging from high-cost luxurious air-conditioned buses to relatively low cost-ordinary buses. Introduction of these services has been done in two different ways: inducting additional new, luxurious buses and converting the existing ordinary buses into the so called, high quality services. While the former brings the real product differentiation in terms of comfort, saving of time of travel, etc, the latter does not necessarily bring any real change in the quality of service (for example, the white board of an ordinary service will be converted into an yellow board or an English letter M will be written on the white board of an ordinary service in order to increase only the fare while the comfort and other qualities of the service remain more or less the same). Though the fare differs across different types of services, the overall fare across time period for all services is becoming dearer due to various indirect strategies adopted by the MTC. These strategies are helpful in generating revenue to the MTC since any official increase in the existing bus fares would generate political tensions.
Though these strategies bring additional comfort to the commuters partially, they have generated some issues in relation to equity as well. For example, the distribution of services within the total fleet at present is found to be biased towards the high fare services. Now, the choice between high fare and low fare buses available to an ordinary commuter is an economically unfavourable choice since the commuter will have the option to travel mainly in the high fare buses. In case she has strict preference to low fare services, then she will have to incur substantial amount of opportunity cost by way of waiting for longer time to travel by such a service due to the fact that the frequency of the low fare buses has come down in recent days, especially during peak hours. In other words, the inequitable fleet structure at present increases both the direct cost as well as the opportunity cost of travelling.
SO, THE advice to switch over to PTS will not be a nice advice unless or until the choice set available to the commuters both across different modes as well as within a particular mode is equitable across different groups of commuters and different areas within the city.
Another fundamental economic issue to be addressed in the wake of the above piece of advice is that at what level of fuel price, the owners of private vehicles will switch over to PTS? Simple economic principle says that costs and benefits of both private mode of travel as well as travel by the PTS will have to guide the commuters decision to opt for either of the systems. More precisely, a commuter will switch over to the PTS only if the relative cost of travel in PTS is lower than that of the private mode of travel, when there is a change in the price of fuel.
Let me take my own case. I have got a two-wheeler, which is my private mode of travel. Every day I have to travel eight kilometres up and down to work. At the fuel efficiency of 60 kilometres per litre, I can make six trips at the cost of Rs 55 (at todays petrol price in Chennai). However, if I travel by the PTS I could make approximately four trips with the same amount (@ Rs. 14 per trip). On the basis of direct cost of travel, the economics of private mode of travel still works out to be relatively cheaper. But, if I travel by low fare bus, at Rs 7 per trip, then I could make eight trips which works out better than the private mode of travel. Unfortunately, this option is ruled out because of inequitable distribution of the low-fare services, especially during peak hours.
In addition to the direct cost, there are indirect costs involved in travelling in the PTS, such as, opportunity cost of extended travel time, psychological costs due to congested travel and breakdowns, etc. Even though concessions on season tickets may reduce the burden of the direct cost, it is these indirect costs that make the PTS less preferable. Taking into account all kinds of costs, the PTS becomes more costly than the private mode of travel. Simple economics says that even with the current increase in the petrol price owners of private vehicles, like me, will not switch over to the PTS permanently. So, the advice of the finance minister will be taken seriously only when the PTS is strengthened by inducting more number of low-fare but high quality services, apart from other measures.
(The author is associate professor, Madras
Institute of Development Studies, Chennai)
Institute of Development Studies, Chennai)