Economics of Land Transport in Singapore - Managing Traffic Congestion in Singapore

Summary

The video explores how Singapore manages traffic congestion in a land-scarce environment. With 12% of its land taken up by roads and a growing number of vehicles, the government uses measures like taxes, the Additional Registration Fee (ARF), and the Vehicle Quota System (VQS) to regulate car ownership. However, car usage, not ownership, is the core issue. To address this, Singapore introduced the Electronic Road Pricing (ERP) system, a targeted, pay-as-you-drive approach that charges motorists based on road usage. Coupled with a robust public transport system, these strategies help reduce congestion and ensure smoother traffic flow.

Takeaways

• 🚦 Singapore has a limited land area, with 12% taken up by roads, totaling over 3,300 kilometers.
• 🚗 The number of vehicles on Singapore's roads exceeds 900,000 and continues to rise.
• 🌐 The increasing demand for road space leads to traffic congestion, causing negative externalities such as increased travel time and reduced productivity.
• 💸 Congestion leads to higher business costs, increased fuel consumption, and environmental issues like noise and air pollution.
• 💵 The Additional Registration Fee (ARF) was introduced to make car ownership less attractive by increasing upfront costs.
• 🚫 The Vehicle Quota System (VQS) was implemented to control the growth of the vehicle population by capping the number of new cars each month.
• 🛂 The Certificate of Entitlement (COE) is required for purchasing a car under the VQS, and its price is determined by market demand.
• 🚦 The Area Licensing Scheme (ALS) was the world's first road pricing scheme, requiring drivers to display a paper license to enter restricted zones.
• 💳 The Electronic Road Pricing (ERP) system was introduced to manage traffic flow by charging motorists based on time, location, and traffic conditions.
• 🚍 The ERP system encourages drivers to adjust their driving behavior, such as taking alternative routes or using public transport, to avoid congestion charges.
• 🌿 An efficient public transport system is crucial as an alternative to private car usage to ensure the success of traffic control policies.

Q & A

What percentage of Singapore's land area is taken up by roads?

Up to 12% of Singapore's land area is taken up by roads.

How many kilometers of roads are there in Singapore?

There are over 3,300 kilometers of roads in Singapore.

What is the total number of vehicles on Singapore's roads?

There are over 900,000 vehicles on Singapore's roads, and this number is rising.

What is a negative externality in the context of traffic congestion?

A negative externality is the adverse effect or cost on third parties who are not directly involved in the activity that causes the effect, such as longer traveling times and disruption to planned activities due to traffic congestion.

How does traffic congestion affect individuals and businesses?

Traffic congestion leads to longer traveling times, disruption of planned activities, reduced productivity, increased business costs, higher fuel costs, and negative environmental impacts such as noise and air pollution.

What is the Additional Registration Fee (ARF) and how does it affect car ownership in Singapore?

The ARF is a fee based on a percentage of a car's open market value, payable upon the registration of a vehicle. It increases the cost of car ownership, making cars less attractive to consumers.

What is the Vehicle Quota System (VQS) and how does it control the number of new cars on the road?

The VQS is a quota system that caps the number of new cars added to roads each month. Buyers must bid and pay for a Certificate of Entitlement (COE) before purchasing a car, and the number of COEs available is limited by the quota.

How does the Certificate of Entitlement (COE) work in the context of the Vehicle Quota System?

The COE gives the right to purchase a car, and without it, one cannot own a car. The price of the COE depends on demand, and it allows for control over the growth of the total vehicle population.

What is the Area Licensing Scheme (ALS) and how does it manage traffic flow?

The ALS is a road pricing scheme that requires drivers to display a paper license to enter a restricted zone. It was the world's first road pricing scheme and aimed to manage traffic flow by discouraging driving in certain areas.

What is the Electronic Road Pricing (ERP) system and how does it differ from the ALS?

The ERP system is an automated electronic road pricing system that charges motorists every time they drive on a priced road. It is more versatile than the ALS, with charges varying according to time, location, and traffic flow, and it encourages drivers to adjust their driving behavior.

How does the ERP system influence driving behavior and traffic flow?

The ERP system encourages drivers to consider driving at non-peak hours, take alternative routes, switch to public transport, or even forgo the trip. It charges drivers based on the external costs they impose on others, leading to a more efficient market outcome with less car usage and smoother traffic flow.

Why is it important to have alternative modes of transport when discouraging car ownership and usage?

Having alternative modes of transport is essential to ensure that people have viable substitutes to switch to, which is necessary for the effectiveness of traffic control policies. An efficient and effective public transport system serves as a major pull factor, convincing people that they are making the right choice.