Kuala Lumpur, 31 October 2014 – The Land Public Transport Commission’s (SPAD) decision to let school bus operators negotiate bus fares with parents is a progressive step forward in ensuring the costs are decided by market mechanisms. Unfortunately, for reasons unknown SPAD has not adopted the same attitude towards express bus operators.

The Federation of Malaysian School Bus Operators should take the same stance too. They should let school bus operators decide whether they need to increase the fare or stick to the same price as the drivers know first-hand the costs involved in running the services. By giving bus operators the freedom to decide, a more competitive environment can be nurtured. A competitive environment will ultimately benefit parents because operators will then have compete to provide the best price for the highest quality and safety.

If this approach is to be successful, SPAD and the Federation should not intervene if there are bus operators who increase the bus fares steeply as a result of this decision. Parents should be the ones deciding whether the increases are reasonable or not. If parents are not happy, they should opt for a different provider.

However, SPAD and the Federation should work harder to ensure that parents have alternative choices. If there are regulations that limit the number of bus operators in one area, such regulations should be removed. And as a regulator SPAD should step in immediately if cartel practices are being used by operators in deciding fares and coverage.

Parents too should realise that they will not get a good deal if they ask for SPAD or operators associations to fix prices. They will only get the best price, quality and safety if they demand choice and competition in the open market.

Finally, we urge SPAD and other related regulators to be consistent in the approach that they take. If they are applying market mechanism to fares of school buses, the same should be applied across the board including for services such as express bus. Otherwise, they risk being perceived as an agency led by haphazard individuals who do not have a clear direction.

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