Due to the fact that half of public transportation buses failed to operate, the public had to walk to work and arrive late, causing much frustration two weeks ago. The routine of the city was disrupted for two days. More than a thousand private buses and city buses run along 77 routes. But private bus operators held a strike and 37 routes were not available.
To find out who is responsible, the media pecked at Smart Bus program executors, the Ulaanbaatar Public Transportation Authority, private bus companies, and Ulaanbaatar Smart Card LLC. Private companies complained that they are not able to cover operational costs with income, and that their payments aren’t being transferred on time. It was confirmed that public transportation income is distributed to companies on a daily basis through Ulaanbaatar Smart Card’s Trade and Development Bank account. Capital city authorities claimed that 85 percent of the monthly compensation, 1.5 billion MNT, has been distributed.
Ulaanbaatar Mayor E.Bat-Uul issued an order to have public transportation companies investigated for causing damage to residents by striking after their payments were received. After two days of arguments between the parties, they agreed to revaluate the gap in hourly cost estimates and renegotiate, which ended the strike.
The real reason for the halt of the fare payment program, which started three months ago, is not just the failure to transfer payments and wages. It is a byproduct of the view that “state property is nobody’s property”, which allowed spending without research and estimates by public administration for public funds.
When funding becomes smart
Parliament approved Ulaanbaatar’s development strategy through 2030 two years ago. Through this plan, structural changes to public transportation were made. Zorchigch Teevriin Negtgel was formed after merging the city’s Autobus-1, Autobus-2 and Tsahilgaan Teever companies on October 1, 2014. When this merger occurred, 30 percent of public transportation was owned by the state and provinces and 70 percent was attributed to private companies. After a year, or at the beginning of this month, the ratio of attribution switched places.
Three months ago, all public transportation buses in the capital were equipped with the smart card system, which allowed the precise calculation of public transportation costs and income, and an opportunity for accurate planning by monitoring the number of passengers on each bus, their demographics, their destinations, transit, and frequency of travel.
Public transportation passengers are classified in four categories: regular, law enforcement, student, and elderly. As compensation for the fees of passengers, with the exception of the regular passenger, related ministries used to transfer 53 billion MNT from their budget in one go. The above mentioned conflict and service halt occurred because starting in 2015, the city was made responsible for the compensation of bus companies.
To make compensation payments more realistic, the Ulaanbaatar Public Transportation Authority gave two free trips a day to 115,000 elderly and disabled residents, who had to register at the Ulaanbaatar Welfare Office in person. More than 100,000 students are being given free round-trip fares on weekdays, from home to school and back, with their bus passes. The free trips were given on the basis of agreements between schools and the Ulaanbaatar Education Office. When the compensation was calculated against actual use, it was far lower than previously outlined amounts. The city had paid two billion MNT in September for compensation, which is nearly twice as low as expenses in previous years. This savings presents the opportunity to invest more in the transportation sector.
Previously, the compensation was calculated on the notion that the elderly, people living with disabilities, and students would travel by bus twice a day, which was beneficial for bus companies. But now, public transportation companies are not able to cover even their fixed costs when the cost and income of every hour and the number of passengers are calculated precisely.
These companies were not able to give wages to their employees in the past few months, since service income has not been issued with accuracy or on time. Many companies had to buy fuel by taking out loans, and their financial situation was growing worse, which pushed their employees to strike.
Aside from this, around one hundred older buses will be taken out of commission, which will prompt companies to upgrade their buses. There are around 20 public transportation companies, but the ones with the “youngest” buses, best services, and most profitability will be here to stay. The city is interested in cooperating with fewer companies. In general, public and private companies need to work alongside one another and compete to bring increased output.
Tallinn, the capital of Estonia, has made public transportation free. Passengers only have to swipe their cards upon boarding and exiting. They created this solution as bus tickets didn’t cover one third of operation cost. They used to classify passengers like Mongolia does, and monitoring and compensation was too costly.
Public transportation to become smart on its own
Currently, there are criticisms that the tendering process for the new payment system was unfair and the system that was introduced is too costly. Related monitoring organizations should investigate the matter and report their findings to the public. The introduction of the smart card system was inevitable, as there was a need to make the city’s public transportation services more sophisticated, accessible, properly scheduled with appropriate routes, and more comfortable and safe.
To make public transportation better and more profitable, before anything else, the previously introduced smart card system needs to be used in its entirety, the central monitoring system needs to work at full capacity, and the transportation network needs to be developed using the information that is being collected by the smart card system.
Public transportation capacity, route distance, and the number of passengers boarding hourly needs to be made flexible, and buses need to have lit destination signs. High standards need to be established for buses, just like planes. Bus commissioning should be determined by a vehicle’s age and mileage. Buses that were decommissioned in South Korea after eight years of use and accumulating over 600,000 km in mileage are fixed and painted to be operated for another four years in Mongolia, where there are no limits to terms of use. This, in turn, increases air pollution and negatively impacts the comfort and safety of passengers.
Bus numbers, routes, and schedules need to be available at each bus stop. Smart cards need to be available for purchase close to bus stops for foreign and domestic tourists. Nightly buses need longer routes and increased fares. Freeloading riders need to be penalized, and those who have lost their bus passes can pay high penalties that can be reimbursed after they find their cards. The smart cards need to be used fully, and there is an opportunity to make it possible for the cards to be used to purchase more products and services. If the smart cards can be installed on smart phones, that would make things much simpler.
If public transportation was reliable, timely, comfortable, and environmentally friendly, residents would choose buses over cars, which would decrease traffic and reduce air pollution. Larger stations need to have services that ensure the comfort of passengers, such as cafes and stores.
Public transportation needs smart management more than it needs smart cards.
2015.10.14