By PREMILA KUMAR, CEO, CONSUMER COUNCIL OF FIJI
The Consumer Council is pleased to note that bus electronic-ticketing is finally a reality. The system will not only benefit consumers, but also the bus industry and the Government.
E-ticketing has been introduced as one of the means of preventive revenue leakage in the bus industry and ensures there is transparency in revenue reporting by bus operators. It will allow the Government, LTA and other regulatory agencies to make more accurate assessment of an operator’s revenue /financial status. Consumers will also benefit as their taxes will not go towards subsiding the bus sector or bus fares will not go up because of poor financial performance.
The bus industry claims to lose about $7million through pilferage by mostly drivers and operators have regularly claimed that costs are spiraling while revenue is dropping. E-ticketing will ensure better revenue recording as compared to the unreliable cash system. It will bring about much needed accountability and transparency in the industry that has been lacking for decades.
The bus industry has greatly benefitted from various Government subsidies for fuel, spare parts, bus fittings and most importantly 15% VAT exemption on bus fares. Bus industry in 1996 enjoyed 7c/L fuel concession which rose to 19c/L by 1998 beside rebates given on tyres.
This has tremendously supported the bus industry for having a smooth sail over the past years. The revenue flow in the industry was well protected with a number of Government subsidies awarded to the industry. However, there was none for the travelling consumers who only were forced to dig deeper into their pockets after 65% fare increase in 2009.
While supporting the e-ticketing system, the Council is aware of concerns from some consumers in regard to the $10 price tag on the smartcard. The Council is of the view that it is about time the bus industry contributes, by providing some form of subsidy on the cards to make consumers switch from cash payment to card system. After all the industry will save $7 million every year through e-ticketing.
One card will cost $10 apart from the top up amount that will be incorporated in it depending on consumer choice. So for instance, it will mean $50 alone for the smartcards only for a family of five. It will be very hard for an average family on the lower end of socio economic scale to switch to this new system unless the smart card plus the top up is less than paying fare in cash.
The 15% VAT currently paid by travelling consumers is collected by the bus operators and it stays with them. It is time for the bus industry to return the favour by transferring this benefit to the travelling consumers who ultimately have been paying VAT all along.
Consumers will benefit from e-ticketing through carrying less cash and having credit on the card means one’s bus fare is already budgeted for.
The soft approach of issuing manual tickets, relying on education awareness and issuance of bus ticket vouchers has not really worked for the industry. It was for this reason the Orion Report on the Bus Industry Review released in 2009 strongly recommended introducing electronic-ticketing system for the bus industry.
The bus industry therefore should take a rigid step now to move towards electronic ticketing system as the Government also offered free fiscal duty on ticketing machines and ticketing machine parts in 2009 budget.
Meanwhile the Council urges Land Transport Authority to fully explain the benefits of this system and how it works to the general public. This has not been done and is causing confusion amongst consumers.