Want better transport? Pay for it

[CityFarmer]

Ok, so like it or not, we are caught in a situation where buses and trains are too crowded during peak hours. Besides giving feedback and asking for improvement, what we could do now is to ask ourselves what we can do in the meantime to improve the situation in our own personal life.

One of my friend decided to wake up much earlier and take the train.
Also the gap can be used to exercise and have breakfast.
Of course, bedtime needs to be adjusted as well.

Many people I know decided to cycle or ride a motorbike as it is seldom caught in a jam
and is more affordable.(rainy days is a problem though)

The company I work for decided to adjust working hours, while we are slightly
out of sync with rest of Singapore, we pretty much still get all the work done.

So, while the public transport tries to improve itself, it does not help to be unhappy and grumble about it.
Take active steps to adapt to the situation and make it better for you.

I concur, but we are the minority here. Any more buddies in this group?

[CityFarmer]

I don't see how more competitors will be able to make it better for us.
They are in it to make a profit. Operating cost in Singapore is high. The more stringent the government enforces the minimum standard, the higher the cost of running it. Also if many players are in it, there wont be economies of scale(which is important to keep costs in check), which will further up prices.

One important point is missing here. The new framework enables a service-base business model. With a much smaller capex, economies of scale has lesser play. Competition can drive for more innovation, thus better quality of service

[specuvestor]

agree especially the part on "We demand profits" and "Economic efficiency".

unless shareholder like ourselves decided to run a not-for-profit organisation, then there will be a need to pack more and more to generate more effective use of limited assets in the company.

P.S. Last time, I was also very peck-chek about the MRT, until I decided to become their shareholder. Then, like what Gerald Ee says,
my mindset changed completely.
Don't belief me? Just buy tons of transport company shares and you'll hope that they become hyper-active.

P.P.S Just to clarify, I'm definitely against the train breakdown and a few buses (same number) arrived at the bus stop at the same time.
This is different from economic efficiency.
This is outright incompetence and not acceptable at all!

That's my point in the rhetorical question on SGX below. You cannot serve 2 masters. Best you can do is try to craft an optimal route between these 2 conflicting objectives. You cannot try to maximise one over the other, which some forumers seemed to have a habit of doing. Their world is a binary world. If the real world is binary, a lot of issues would have been easily resolved because there is an easy answer.

And in the transport case profit maximisation was becoming the mantra under the Emeritus Senior Minister (whatever that means) Goh era which became the root of many issues we face now because one objective is favored over the other rather than strike a balance. Their idea of all public services have to be self-funding is a fallacy by extrapolating the right idea from public services should be efficient. Efficiency and profit maximisation is correlated but not the same thing.

I think here is a investment forum that with a group of people who has a sense of capitalism.

If you can lie down on the MRT seat, the business model doesn't make sense economically. If a service provider try to satisfy your standard, it will soon being punished by the market, regardless of if it is listed company or not.

Actually doing only things make sense economically is the key factor behind the victory of capitalism against communist.

Fully believe on capitalism is the basic behind Singapore's success but today there are many people are trying to deviate from it to delight the demanding voters. It is a risky path to go.

Have you ever wondered why the woodstock for capitalists Buffett supports death tax, donations, equal opportunities and philanthropies?

I'm guessing you are probably young to have the mindset that "capitalism is the basic behind Singapore's success" We were social capitalist in the first 25 years of our independence. So much so that China came to study our model. There are many LKY, Goh Keng Swee books around that you can read up and understand more before jumping to conclusion.

So what is listed stock exchange SGX model? Why do people bother to gripe and complain when OPMI are marginalised? Isn't that how capitalism of survival of the fittest supposed to work? SGX's mission is to maximise trading value and economical sense for their shareholders... no? Or is SGX different for what reason?

[tanjm]

I hear a lot (not just this thread) about how the profit motive is undermining the service we get.

The evidence belies this. I looked quickly at SBS transit full year 2013 results. Their net profit after tax is 11.2 million. Their net assets are 344 million. This produces a return on net invested capital (equity) of only 3.2%. This is extremely low. As a profit oriented investor, I would steer clear of the company. It is obvious they are not making enough money to cover the cost of capital.

These capital intensive businesses probably have very little room to innovate or improve services without cutting further into their already thin bottom line.

This latest move to sequester the capital (buses and such) would make the transport companies asset light and improve their financials. The government decides on how to subsidize the infrastructure and bus companies become a bit more nimble and (hopefully) offer better service without sacrificing efficiency.

One thing that people haven't discusses is how the Govt would take over the infrastructure and how they'd compensate the bus companies.

[freedom]

I can't believe that many "investors" in this forum are preaching non-profit kinda of corporations here. Without profit, why would there be any investment in the first place?

No public companies should be run as non-profit driven. If non-profit driven is the idea, please don't ever ask capital from private investors. The government can fund whatever its non-profit driven ideas, but please stay away from private investors.

The market and private investors have shunned companies lack of satisfied return, the government does not need any more proof for it.

[specuvestor]

Without profit, why would there be any investment in the first place?

In the pte world there are angel investing, start up investing, seed investing etc

Then there is also the "old pre-mandate-change" Temasek with POSB and DBS, and other GLCs... and AStar and Biopolis now. We have moved from unprofitable micropolis HDD manufacturing to unprofitable biomedical, yet policy looks right to me. Imagine if nobody wanted to start a telco in Singapore because it is not profitable with racial riots and high earning British moving out...

All these were not profitable ventures in the beginning. And some are not even profit oriented per se but they spawned a whole eco-system of jobs and profits. Chartered and STATS are in this category

Like LHL remarked many years ago, transport is the bloodstream of an economy. To squeeze profit out of a transport system is missing the big picture vs rest of the body. Imagine if SGX just focus on profit maximisation. There are also many companies listed that seeked capital yet are not profit maximised, not to mention loss, in the first place eg S-chips

Like I said, if things are so binary, either profit or non profit, then solutions are easy.

[GPD]

Frankly, there is a need to grumble to "inform" somebody up there that there is a serious issue at ground level. If everybody change their attitude and keep mum, nobody up there will bother. Sometime, even if the problems are known, they may just sit on it as they are low priority things until the public kicks their butt. It is already obvious that those people up there are already so comfortable that they absolute cannot comprehend how frustrating it is for those that face it on a daily basis. There is also a need to keep grumbling to keep them on their toe.

In fact we are doing them a favour. They don't need to install expensive problem detectors. We do this job for them. Free-of-charge!

The one that needs a change of attitude is the one that has three seats telling those that have no seat to change their attitude!

[freedom]

Don't tell me that you are naive enough to believe that the angel investing, start up investing, seed investing are philanthropic donations. If you tell them, the whole purpose of your business is non-profit driven, see how many angels will support your cause, aside from philanthropic source.

Investors who are investing in Amazon are not looking at near team profit, but if Amazon tells them it will NEVER make a profit, see how many investors will be left. The same applies to all your examples of so called "non-profit" driven private investments. The investors are just not looking at near term profit, it does not mean that they are not looking at profit at all.

If Temasek continues to invest into such not-for-profit ventures, the MPs should question the management of Temasek. The money is not for Temasek to squander.

Or maybe let me re-phrase, if every company is not aiming for profit, do you think there is going to be a profession called investment?

[specuvestor]

Don't tell me that you are naive enough to believe that the angel investing, start up investing, seed investing are philanthropic donations. If you tell them, the whole purpose of your business is non-profit driven, see how many angels will support your cause, aside from philanthropic source.

Investors who are investing in Amazon are not looking at near team profit, but if Amazon tells them it will NEVER make a profit, see how many investors will be left. The same applies to all your examples of so called "non-profit" driven private investments. The investors are just not looking at near term profit, it does not mean that they are not looking at profit at all.

If Temasek continues to invest into such not-for-profit ventures, the MPs should question the management of Temasek. The money is not for Temasek to squander.

Or maybe let me re-phrase, if every company is not aiming for profit, do you think there is going to be a profession called investment?

Don't tell me you are naive enough to believe that all listed companies are "solely" profit driven. If this axiom is true we wouldn't even need watch-dogs. Even if they are "profitable" some retain profits to benefit certain stakeholders. I happen to be in the investment profession so I probably can say that not all companies are aiming for profit, hence caveat emptor. In fact during the dot com days VCs anlayse companies based on cash-burn rate and not "profit" per se.

You keep looking at matters as binary: either all or nothing, profit vs non-profit, socialism vs capitalism, there vs now, me vs you... there is no continuum in your analysis. Even when analysing a company there is hardly ever a binary "must buy" or "must sell" stock. Reason is simple: For every pro there is usually an associated con. Missing the big picture is often the reason why value investors get stuck in value traps or even frauds.

Your Amazon example explains what I was saying: It is about your timeline, your objective, your stakeholders, etc. Amazon had been having lousy ROI since the dot com days and it is open secret that their objective is not making money, for NOW. So why people still invest in it? Because they believe mindshare and market share is still most important now. So when will they finally have ROI above their WACC? Your guess is as good as mine but their strategy is different because their objective is different. Google is another example of innovations that does not focus on profits per se... from digitising books to email to maps

Similarly government objectives and policies looks at the entirety rather than a small part of the economy. If they lose money in certain parts for example transport and infrastructure but entice other businesses and eco-systems to set up in Singapore, that's where they get their payback. That's hardly called squandering. It's the same idea from non-profitable Education to Defence. Objection to a policy just because it by itself is non-profitable is myopic.

ESM Goh has done a good job brain-washing the younger generations, just as he done on asset enhancements and rising property values. People should revisit his policies and think hard whether they make long term sense or just a smoke-bomb.

[newborn1000]

Don't tell me that you are naive enough to believe that the angel investing, start up investing, seed investing are philanthropic donations. If you tell them, the whole purpose of your business is non-profit driven, see how many angels will support your cause, aside from philanthropic source.

Investors who are investing in Amazon are not looking at near team profit, but if Amazon tells them it will NEVER make a profit, see how many investors will be left. The same applies to all your examples of so called "non-profit" driven private investments. The investors are just not looking at near term profit, it does not mean that they are not looking at profit at all.

If Temasek continues to invest into such not-for-profit ventures, the MPs should question the management of Temasek. The money is not for Temasek to squander.

Or maybe let me re-phrase, if every company is not aiming for profit, do you think there is going to be a profession called investment?

Don't tell me you are naive enough to believe that all listed companies are "solely" profit driven. If this axiom is true we wouldn't even need watch-dogs. Even if they are "profitable" some retain profits to benefit certain stakeholders. I happen to be in the investment profession so I probably can say that not all companies are aiming for profit, hence caveat emptor. In fact during the dot com days VCs anlayse companies based on cash-burn rate and not "profit" per se.

You keep looking at matters as binary: either all or nothing, profit vs non-profit, socialism vs capitalism, there vs now, me vs you... there is no continuum in your analysis. Even when analysing a company there is hardly ever a binary "must buy" or "must sell" stock. Reason is simple: For every pro there is usually an associated con. Missing the big picture is often the reason why value investors get stuck in value traps or even frauds.

Your Amazon example explains what I was saying: It is about your timeline, your objective, your stakeholders, etc. Amazon had been having lousy ROI since the dot com days and it is open secret that their objective is not making money, for NOW. So why people still invest in it? Because they believe mindshare and market share is still most important now. So when will they finally have ROI above their WACC? Your guess is as good as mine but their strategy is different because their objective is different. Google is another example of innovations that does not focus on profits per se... from digitising books to email to maps

Similarly government objectives and policies looks at the entirety rather than a small part of the economy. If they lose money in certain parts for example transport and infrastructure but entice other businesses and eco-systems to set up in Singapore, that's where they get their payback. That's hardly called squandering. It's the same idea from non-profitable Education to Defence. Objection to a policy just because it by itself is non-profitable is myopic.

ESM Goh has done a good job brain-washing the younger generations, just as he done on asset enhancements and rising property values. People should revisit his policies and think hard whether they make long term sense or just a smoke-bomb.

I like the high quality of your posts