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Covid-19: Without tourism, some debt-laden smaller private-hire bus operators cry for help

SINGAPORE — Without tourism, the previous mainstay of his business, Haresh (not his real name), faces rapidly mounting debts and said that he is counting down the days till he may have to wind up his small private bus charter company.

Mr Lexsen Zackaria Vejayan (pictured), 47, owner of Blue Diamond Limousine, one of the smaller private-hire bus operators struggling to stay afloat now that tourism has dried up during the pandemic.

Mr Lexsen Zackaria Vejayan (pictured), 47, owner of Blue Diamond Limousine, one of the smaller private-hire bus operators struggling to stay afloat now that tourism has dried up during the pandemic.

  • Calls are growing for more support to be given to the private-hire bus industry
  • Without tourism, the mainstay of their business, their debts are rising and their earnings are sluggish
  • One bus association said 10 to 15 per cent of its 50 members are on the brink of collapse
  • Enterprise Singapore said there was a S$23 million support package last year for the private bus sector

 

SINGAPORE — Without tourism, the previous mainstay of his business, Haresh (not his real name), faces rapidly mounting debts and said that he is counting down the days till he may have to wind up his small private bus charter company.

For now, the 34-year-old father of two, who declined to be named for fear that his credit rating might be downgraded, is scraping by with two contracts to ferry bank employees to work. However, the business is bleeding cash, made worse by rising diesel fuel costs.

Every month, S$14,000 goes towards loan instalments for his four 49-seater coaches; S$1,200 goes to parking fees; and about S$4,000 services other debts — he owes credit companies S$30,000 and diesel suppliers S$15,000, with both hounding him daily for repayments.

He still has to pay his three drivers and maintain his buses just to keep afloat.

To make matters worse, Haresh finds himself contending with other equally desperate bus operators undercutting market rates to win what little business is on offer in order to service debts of their own.

Some relief had come in the form of season parking fee waivers for private bus season-parking holders at government-owned car parks, but Haresh said that the queue for the limited number of lots is so long that the process is “like balloting for a BTO (Build-To-Order) flat”.

Unlike operators of private-hire cars, he cannot pivot to do deliveries as the cost from wear and tear to deliver small parcels would be too high. Besides, buses are too big to enter many car parks.

And while he has given himself six months to break into the potential market of transporting migrant workers from their dormitories to worksites — given the renewed safety concerns over them being ferried in lorries — he had not secured any contracts yet.

“I am seeing buses getting repossessed, diesel suppliers cutting off their taps for bus companies due to late payment. They don’t want to take the gamble of letting them hold the amount any longer given the situation that we are in,” Haresh added.

“We are practically in a limbo, holding on, and basically praying.”

He said that he is not seeking government handouts but would like to see diesel prices lowered.

He would also like for the smaller players to be given the chance to bid for public tenders. These are currently out of reach for people such as himself because the tenders are asking for a supply of 30 to 40 buses at a go.

FINANCIALLY STRAPPED

Calls are growing among a segment of smaller private-hire bus operators for drastic measures to keep the industry afloat as business has stayed sluggish for more than a year since the Covid-19 pandemic hit.

The Express and Excursion Bus Association said that 10 to 15 per cent of its 50 members, who together own some 2,000 buses — almost all of them previously supported by tourism — are on the brink of collapse.

Mr Sebastian Yap, its sub-committee chairman of terminal service and marketing communications, said: “These bus companies have no choice but to surrender. Never mind the principal (of their loans), they are not even able to service the interest.”

He calculated that the yearly interest for an operator servicing the loans for five coaches could exceed S$80,000. “How about those owning 10, 20 vehicles?” he asked.

“The Government is very kind. They keep the parking free. They grant licensing for free. But that kind of assistance is very small. It does not actually help the operator,” he added.

Members of his association were called upon to support the nation’s operations in the fight against Covid-19 by carrying passengers who need to go to hotels or facilities to serve their stay-home notice, but only 40 to 50 buses are mobilised for this role daily on average, he said.

“What happens to the other 1,950 buses?” he asked.

Mr Yap said that trade agency Enterprise Singapore had engaged the association a number of times, and tried to get bus operators to support the logistics industry, which had become busier during this pandemic with more delivery work. However, fewer than 1 to 2 per cent of the operators had taken up the option.

Other than the buses being unsuitable for delivery services, he said that bus drivers are mostly in their 50s. “Do you expect them to carry heavy stuff?”

GIVING UP VEHICLES, DOING FOOD DELIVERIES

Mr Lexsen Zackaria Vejayan, 47, owner of Blue Diamond Limousine, wrote to TODAY last month to highlight the plight of smaller private-hire bus operators.

He said it is unfair that taxi and private-hire car drivers are getting far greater support and attention when he and several of his fellow operators are living “hand to mouth”.

Mr Lexsen is now servicing much of the S$1,696 monthly instalment for his only remaining 13-seater mini-bus and other business costs by fulfilling Foodpanda deliveries on an electric bicycle from 9am to 7pm or 8pm daily.

He used to have a second 13-seater but he had to surrender it to the car dealer at a S$28,000 loss last December when he could promise monthly payments of just S$500 when they were supposed to be S$1,800.

Mr Peter Chee, who owns HP Coach and Limo Services, faces a similar fate.

The 47-year-old used to be busy from early morning till late at night, sending children to school before ferrying tourists around the island. In between, he would spend his time arranging jobs as he used to run two 24-seater buses.

But with 80 per cent of his revenue gone after tourism dried up, he traded his buses for a seven-seater car, which he now uses to do food deliveries — his only remaining income.

“It is not a bad time. It is a terrible time,” he said.

SUGGESTIONS ON WHAT CAN BE DONE

The Singapore School Transport Association has about 1,000 members, with 700 being one-man operators.

Its chairman Edmund Lee said that the smaller operators are more vulnerable as they tend to take up loans not from banks but directly from car dealers, which charge higher interest rates.

As for those who have managed to hang on despite a plunge in the number of engagements by schools since the pandemic halted excursions and co-curricular activities, Mr Lee said it is upsetting that many buses are just lying idle for much of the day.

As one of the measures to save the industry, the Government should consider extending the 10-year or five-year Certificate of Entitlement (COE) for free for buses. A COE is needed to own a vehicle and use it on the roads.

In contrast, the bigger operators told TODAY that they are not as badly affected. These operators are especially those specialising in serving the domestic market such as providing trunk services at university compounds and for malls, supporting the army, and transporting factory workers. 

Mr Bobby Chiew, head of human resources, workplace safety and health at Woodlands Transport, which manages more than 200 buses, said that there is not much change to business, with some “pluses and minuses”.

The pluses came when some customers, in keeping with safety precautions for Covid-19, decided to hire two buses instead of one, and change routes so that fewer people would travel together.

Mr Philip Peh, general manager of Tong Tar Transport Service, which has a fleet of 150 buses, noted that revenue had dropped by just 30 per cent because its main area of business is transporting workers. “We do everything that is in the local market, except tourism,” he said.

Mr Peh, who is also the president of the Singapore School and Private Hire Bus Owners’ Association, said that the private transport sector “would crash” though, if the smaller players were to be decimated. This is because they fulfil many ad-hoc requests that the bigger players cannot.

ENTERPRISE SINGAPORE RESPONDS

When contacted by TODAY, Enterprise Singapore acknowledged that “this is a difficult time for all businesses”, but said that a S$23 million aid package for the private bus sector was announced in March last year. This was to support around 5,000 private bus operators managing some 13,500 private buses, including coaches.

The package included a one-year road tax rebate, up to S$750 in Class 2 bus service licence fee refund or waiver, and season parking fee waivers at government-owned car parks. The parking fee waivers, which had been extended thrice, would be in effect till Sept 30.

The agency did not respond to TODAY’s question on whether more measures would be rolled out to support the affected players in the struggling private-hire bus industry.

However, it noted that bus operators may ease their cash flow by tapping the Temporary Bridging Loan programme, which provides access to working capital for business needs and had been extended till Sept 30.

The agency also said that the operators may tap the Enterprise Development Grant to upgrade their business and the Productivity Solutions Grant to adopt digital tools.

There is also a Land Transport-Industry Digital Plan that was developed for chartered bus services to help the sector transform, Enterprise Singapore said. 

This provides private bus operators with a step-by-step guide on digital solutions that operators may progressively adopt, and the grants and subsidies available to them, under the SMEs Go Digital programme.

“Private bus operators can contact 6898 1800 or email us at enquiry [at] enterprisesg.gov.sg for more information on the various programmes they can apply for (under the agency),” it added.

Related topics

Covid-19 coronavirus tourism bus transport Enterprise Singapore

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