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Government picking Losers in Public Transport

by on February 28, 2012

Parliamentary questions where asked about the quality of the rail services and the bonuses paid to officials at the NS (Dutch Rail-services). Public dismay about the quality of public transport is not just a Dutch problem, but a problem witnessed in most European countries and the US. The problem is not regulation or lack of competition on the rail, but over regulation and the barriers to competition off the rail. The government should get out of the business of picking losers and allow each individual in society to pick their winner. This will not only allow the government to lower the taxes on fuel, but also allow individuals to find the most convinient way to transport each other.

Distance travelled in 2007 per method

Road users need to pay a lump-sum road tax and and indirect taxes though duties placed on petrol. The record price of 1.80 Euro a litre in the Netherlands has been blamed on high oil prices, yet  72 cents (40%) of every litre goes straight to the government in The Hague. By contrast public transport is subsidized.  In addition Dutch students are given a public transport pass paid for by the state, which allows them to use it for free.

The CBS (Dutch Central Agency for Statistics) 2007 statistics on personal transport show that 75% of the total  kilometres travelled in The Netherlands is by car. Compared to just 8% by train equalling the amount travel by bike and scooter. The train therefore seems unpopular even though it is heavily subsidized and train passengers do not bear the full burden of their transport choice. The government is backing a looser by subsidizing an unpopular form of transport and taxing the use of cars.

Allow people to find the best way to transport each other

The arguments for subsidizing public transport is that it enhances the mobility of students and elderly. Yet why not give students the money (or an voucher) and allow them to find the best way to transport themselves? This may mean that students set-up their own transport system based on car-pooling. Likewise entrepreneurs may see that setting up a transport company to cater for the elderly could be a good business. 

7.7 million taxis

Other members of the public may also choose to give rides to those without a car in return for compensation. Currently regulation means that only taxis can do this. The argument for the privileged position of taxi drivers is that customers should be protected from dangerous people offering them rides. Anecdotal evidence suggests that this regulation has not banished scum from the taxi-industry. Instead of creating regulation, this problem could be solved by entrepreneurs. Entrepreneurs could use brands to distinguish themselves from competition and signal quality.

With cuts looming in The Netherlands, industrial action by the public transport unions is likely to affect the country. This may be the time for entrepreneurial Dutch citizens to show how innovative they truly are. Lets hope the government will let them.

From → Extended Society

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