Would you wake up earlier for SGD50 cents a day?
SMRT off-peak travel discount appear too little a perk for most high-earning Singaporeans.
SMRT will raise the discount on its early travel scheme to 50 cents from 30 cents starting from Aug 6, aimed at reducing overcrowding and alleviating maintenance needs in the longer term,
The number of stations where commuters can get that discount by leaving the station before 7.45am will also be increased 14 from 9.
The scheme will now include those who start their journey on the Circle Line, on top of the North-South Line, East-West Line and Bukit Panjang LRT.
But are they enticing enough?
Lim Siyi, Investment Analyst, OCBC Investment Research:
Given increasing ridership levels, overcrowding is definitely becoming a serious issue that SMRT has to address. In my view, a long-term solution is naturally a change to the infrastructure i.e. to allow for a higher frequency of train runs as well as the number of trains in service to prevent huge pools of commuters from crowding the platforms. However, the downside is that such changes take time.
In the interim, this discount measure seems to be the best SMRT can do at this juncture. Unfortunately, this incentive will probably have a small, negligible impact on travelling patterns. While it will benefit existing commuters that already travel within the discount window, it is unlikely that the 50 cent discount will entice a substantial number of commuters to adjust their commute.
Brenda Lee,CFA, BNP Paribas Wealth Management Singapore
I think most of the commuters do not mind paying slightly higher fare for better quality service (i.e. more frequent train service during peak hours). The impact of the discount is insignificant.
Bernard Chin, MayBank KimEng
Our opinion: probably not, especially if you are earning an average or above-average wage1. We suggest an alternative of a fixed percentage-based discount, which we believe would give a better incentive to those living in fringe locations to switch to an earlier travel schedule.
The new discount is intended to persuade another 3–4 % of commuters to start travelling earlier. This translates to approximately 2,000 more commuters daily and a revenue loss of SGD0.25m p.a. for SMRT.
Including the existing commuters who are already travelling during this time period, we estimate the total negative impact on SMRT’s top and bottomline to be under SGD1m.