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No More Ceiling Rate

SPAD Deregulate School Bus Fare

 

From January next year, the government will no longer fix the maximum fare price that school bus operators can impose on parents, Land Public Transport Commission (SPAD) chairman Tan Sri Syed Hamid Albar said today.

Syed Hamid said the regulator had noted that even with the existing system, which last saw a fare hike in 2009, some school bus operators are already ignoring the ceiling rate and charging far higher fees based on their own operating costs.

“We will deregulate, we leave it to the parents and school bus operators to negotiate the fare,” he told reporters at SPAD headquarters here.

When asked about concerns that school bus operators unfettered by regulations on fare prices would impose excessive charges, Syed Hamid said many of the 15,000 operators were only out to “make a living” and not seeking “exorbitant profits”.

He expressed his confidence that operators would offer the best rate, saying that they “seem to be operators with a lot of care and conscience”, saying that he expects them to not act unreasonably or overcharge.

Syed Hamid also said that market forces of supply and demand would push those who overcharge out of business, adding that SPAD will also smoothen the process for those seeking to join the school bus industry.

More competition among school bus operators is expected, with SPAD also hoping that the estimated thousands of illegal operators will apply for proper permits with relatively simple requirements including the absence of criminal records and dangerous driving records.

In addressing worries on uncontrolled fare prices, Syed Hamid also urged parents to exercise their “consumer power” and choose cheaper rivals instead of passively accepting price hikes.

Since the 20 cents hike in fuel price last year, school bus operators who also cited increases in other costs have pressed SPAD to allow them to raise the standard maximum fare by 40 per cent. With yet another price hike in RON95 petrol and diesel earlier this week, it is uncertain how much school bus operators will further increase their fares to deal with the extra cost.

Today, Syed Hamid also said that school bus operators could further supplement their earnings by using advertisement space on their bus bodies, also saying that those with vehicles aged below 15 years old will be allowed to use them for school “excursions”.
SPAD also said today that it hopes the deregulation of fare prices will enable school bus operators to provide a safer and more comfortable ride for school children, as they will no longer be restricted by fixed prices and high costs to provide a “minimum” standard of service.

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