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ERP (Electronic Road Pricing) is one of the method that Singapore use to control road usage. It has it own merits and I will take a look at its current state.

For a start, Singapore registered cars require a IU (in-vehicle unit) to be installed. Or any other vehicle to have an IU should they wish to drive into streets with ERP gantries. For cars without an IU, and here we are referring to foreign cars, there have several options which is to install a temp IU or to use ERP roads under the Fixed ERP Fee Scheme.

More information can be found over at LTA website (direct link to FAQ). At $10 per day, foreign cars without IU can use any ERP roads and they need only pay upon leaving the country via the 2 road based checkpoints. While LTA cited that the $10 is derived from the average ERP usage of foreign cars in Singapore, $10 to someone who need to drive in and out of the CBD several times during the course of the day sounds like a good deal.

Such parties who drive in and out of the CBD several times include and not limited to taxi drivers, traveling salesman (cannot resist writing the geeky term) and delivery drivers/riders.

If such parties can enjoy a day pass system, they could enjoy cost savings which will save business cost. Singapore after all is pro-business.

Looking at cab drivers, if there is such a system for them, it could reduce the peak hour fare for commuters. And taking out ERP rates which are currently passed onto the consumers, cab ridership could potentially go up during peak hours, which is the golden period for taxi drivers with the current 35% fare surcharge.

At the same time, cab drivers need no worry driving through ERP roads in search for fares, especially during the evening rush hours.

But having a day pass system may have its flaws. For example ERP main purpose is to control usage of road during peak hours. It is to encourage planning of trips to non-peak hours if possible. And such non-critical delivery services or non-essential trips should not be made during the peak hours. Hence any proposed day pass system for local vehicles should factor this in. A refined version is to have the day pass applicable to trips made outside of the peak hours, and this alternative day pass priced at a lower rate.

For taxi drivers, their customers have to travel during peak hours (Have to get to office DUH!) and hence a day pass scheme should help them more than anyone else. Consumer get to save on ERP rates. And taking ERP out of the equation of picking between a cab and owning a car, the usage cost of taking a public cab can be much lower than owning a car. This can motivate more drivers to take public transport.