Part 1- Response to Mr Narube’s article on the E-Ticketing System

14/11/2017 12:52

The Consumer Council of Fiji would like to respond to the article by Savenaca Narube on “Poor carry the cost” published in the Fiji Times on 21/10/17. From his article it is very clear that Mr. Narube is ill informed and his analysis lacks depth.

Prepaid Service & Interest

To begin with, Mr. Narube raised concern on how consumers are being made to ‘deposit’ money into their e-cards while only a portion of it will be used on any given day. The Council wishes to remind the writer that the e-transport services is neither the first nor the only prepaid service currently in the country. Consumers are already used to mobile top up, electronic banking and other electronic services that have been introduced.

One may appreciate that majority of Fiji’s population use mobile phones under prepaid mode, but not all consumers fully utilize their funds on their phone in a single day. Similarly, Sky Pacific users, broadband internet users, FEA pre-paid customers, to name a few also have to prepay for the services. How the e-ticketing system is then different from these prepaid services used by a large number of consumers? None of the pre-paid service globally pay interest to consumers. It seems that the writer is oblivious to this fact. Many countries treat security deposits as interest earning and not pre-paid service.

The Council has been making budget submission on the management of security deposits paid by consumers. Consumers pay refundable deposits to service providers such as FEA, Water Authority, phone companies and so forth. Service providers are holding on to millions of dollars of underutilized funds which are “dead money”. The Council is of the view that consumer deposits should be invested or utilized in a manner that would bring some returns to consumers, rather than being used by these companies to further their interests by utilising public funds kept as security deposits.

It is also apparent that he is unaware that Price and Incomes Board is no longer in existence.

He also raised the issue of consumers losing some of their deposits if they lose their cards, or if the card is stolen or small balances in the card is unused. This is not true. Consumers can get a refund for the unused money provided they block the card with Vodafone. Any unused money can be transferred to the new card. So, the simple arithmetic based on unrealistic assumption in the article is meaningless.

In addition, the poor and unemployed are not burdened to deposit large sums into their e-cards because the minimum top-up for the e-card is only $2 that goes well with the minimum return fare being $1.40 for stage one. Nevertheless, for those who do not wish to top-up on a daily basis, are free to top – up higher sums. In any given scenario, consumers who frequently travel by bus will have to account for their travelling expenses. It is significant to note that the top-up cards do not have any validity period unlike mobile recharge cards. The e-ticketing system, allows consumers to budget for their transportation.

Transparent System

Mr. Narube also questioned why the people must suffer in order to fix this problem of alleged stealing in the bus industry and that it’s an employer / employee issue.

The issues pertaining to the bus industry is not limited to the bus companies and its employees. It is for the simple reason that they provide public service, which affects thousands of consumers on a daily basis. Sixty five percent of Fiji’s travelling population rely on bus as it is the cheapest and the most affordable mode of transport. Hence, the bus industry is of national interest as significant number of people are dependent on it.

We agree that the burden of revenue collection rests with the bus operator and not with the Government or the consumer. Any business will put in measures to protect their income from fraud and pilferage. Fraud and pilferage is also impacting on tax revenue. But the question is why the bus industry has not taken constructive steps to address this issue if it is affecting their bottom line?

Bus industry has regularly claimed that costs (fuel, spare parts, tyres etc) were spiralling while revenue were dropping as the reason for bus fare increase. Hence, E-ticketing will bring about much needed accountability and transparency in the industry that has been lacking for decades.

Consumers will benefit directly and indirectly with this transparent system. The direct benefit will be the fair assessment of bus fares based on reliable data. And the indirect benefit for the consumers will be that their taxes will no longer go towards subsiding the bus industry because of poor financial performance due to fraud. The bus industry has greatly benefitted from various Government subsidies on fuel, spare parts, bus fittings and most importantly the 15% VAT exemption on bus fares and fuel concession of up to 19c/L besides rebates also given on tyres.

With e-ticketing, pilferage will be a thing of the past allowing bus operators to receive their fair share of income and pay taxes rightly due.

We do agree that implementation of e-ticketing system may be problematic and it caused frustration and inconvenience to consumers but these are being rectified. Next week, read more on this and the process involved in introducing e-ticketing including why government had to intervene when self-regulation did not work.