Commentary

Why not a ‘drive less, pay less’ system?

Why not a ‘drive less, pay less’ system?
An option to solve the car ownership conundrum is to replace COEs with a permit that allows for a specified amount of vehicle usage, which can be combined with Electronic Road Pricing so commuters still pay higher prices at peak times. Photo: Bloomberg
Published: 3:58 AM, March 6, 2013
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Anyone who wants to own a car in Singapore today faces a double dilemma.

One, cars are expensive to begin with, and last week’s announced restrictions on the financing of cars as well as the tweaks to additional registration fees have increased the upfront costs.

Two, traffic jams on the roads make it challenging to go anywhere. Perhaps it is time to think differently and look at new solutions to reduce costs and jams.

A fundamental problem is that Singaporeans drive surprisingly far, averaging more kilometres than car owners almost anywhere else in the world. Singaporeans drive an average of about 19,000 km per year, far exceeding the 10,900 km in the United Kingdom or 15,000 km in Australia — even coming close to car-crazy Americans who average about 21,600 km per year.

On a tiny island like Singapore, it might seem like car owners would drive far less simply because distances between places are short and petrol prices are high. Yet, the opposite seems to be true, as many drivers want to make the most of their high-priced cars.

As one driver told me, the high cost of his car makes him feel that he should use it every chance he gets, so he drives to the office every day rather than taking the bus that stops almost at his doorstep. That type of relentless driving is a key reason for the traffic jams.

CHARGE BY THE USE

Despite the jams, more people than ever want a car and Certificate of Entitlement (COE) prices have skyrocketed. There are expectations that last week’s announcements will see COE prices fall drastically in the next round — yet the bigger upfront fees and deposit quantums mean many commuters who want a car will be priced out of the market.

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