An interesting article on Auckland’s public transport system in the Canadian newspaper –The Globe and Mail:
Auckland transit blues
Toronto’s main business lobby, the Board of Trade, recently called for the outsourcing of public transit services to private companies, part of their free advice to the next mayor on reducing the city’s deficit.
On one level, it’s an unremarkable proposal: just the latest in a chorus of business demands that governments fix their deficits by selling, contracting out or eliminating public services. But it caught my eye because I am residing temporarily in Auckland, New Zealand’s biggest city, where the transit system is the most fragmented, expensive and maddening I’ve ever used. And it’s 100-per-cent private. The gory details provide a caution for those who believe the private market always does things better.
In the 1980s and 1990s, New Zealand municipalities were forced by conservative national governments to sell off many public assets, including transit. They assumed free-market forces would cut costs and improve productivity. The reality has been the opposite. Indeed, since the 1980s, productivity has fallen far behind other OECD countries, yet costs and taxes remain relatively high. The government even had to buy back some of the privatized companies that failed entirely, such as Kiwi Rail and Air New Zealand.
Today, Auckland’s regional government contracts a dozen different private firms to supply bus, rail and ferry services. A complex network of interlocking ownership links many of these suppliers. So much for “competition.” The biggest, Infratil, is a $2-billion giant with a broad portfolio of privatized assets, including transit, electricity and airports. (That’ll surely catch the Board of Trade’s attention!)
This hodge-podge is all the worse because each company accepts only its own tickets, and not those offered by competitors. Since inter-company transfers are impossible, bus routes can be insanely circuitous. My daughter’s bus trip to school takes three long detours through different neighbourhoods, doubling what should be a five-kilometre route.
Tickets are expensive. Passengers pay according to how far they travel (and then pay again if they need a transfer). Trips of just a few stops cost as little as $1.70 – but another $1.70 is added each time the bus passes through another invisible “stage.” Travelling 40 kilometres from the city’s north to south costs $12.70 to $16.50 (depending which company is used) and takes two hours. A passenger travelling the same distance in Toronto (say, from Scarborough to Etobicoke) would pay $3 once, and require less than half the time.
City planners impose various pseudo-quantitative performance indicators on the contractors, such as sophisticated GPS systems to monitor on-time performance. But even this minimal nod to public accountability produces unintended consequences. Bus companies fear being fined for missing schedule targets, but are driven by the profit motive to ruthlessly minimize outlays on equipment and staff. The resulting pressure is intense on drivers (some of whom don’t even get paid overtime) to meet unrealistic timetables – a media exposé last year showed this often requires breaking the speed limit. Several times, we’ve watched an awaited bus race by without stopping, the driver shrugging helplessly and pointing at his watch.
That anecdote sums up perfectly the system’s irrationality. The top priority becomes ensuring that a private company reaches profit targets, not picking up people who need a ride.
Yet Aucklanders still pay for transit – three times over. Once through taxes – subsidies to private transit consume half of all property taxes collected by the regional government. Then again at the fare box. And finally a third time through inconvenience. No wonder Aucklanders take transit one-quarter as often as Torontonians.
So before you get carried away with enthusiasm for the inherent efficiency of the private sector, visit Auckland. It’s beautiful. But you’ll need to rent a car.
I think it’s often extremely useful to get a well informed “outsider’s perspective” on issues like Auckland’s transport system. Otherwise we can lose sight of the forest for the trees, as the saying goes.
Hat tip: Fare Free NZ
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Despite some inaccuracies in NZ’s taxes being high when they are in fact amongst the lowest in the OECD, I totally agree with what the main point of this article. Interestingly, TfL also took back control of the tube from a PPP. I don’t personally think privately run buses and trains per se are the problem, but rather the lack of control and lack of integration between companies.
The lack of communication between the private companies is no doubt a problem. However, I do think it is the responsibility of the government to intervene and take charge of how they supply public transit. They should be able to accept the same tickets so people are not at an inconvenience when using public transit.
Also, if we make it increasingly convenient for people to use their private cars, then they will continue to drive their cars even if public transit does improve. What the government needs to do is perhaps a higher tax on petrol or perhaps a toll on entering the city centre. The extra revenue can go into funding public transport.
There is another blog post that does agree in some part (although it only includes making driving inconvenient in the comments):
http://blog.heaps.co.nz/how-to/good-old-public-transport/
I think he may have exaggerated a bit on a few points in there:
-daily travel is effectively capped at $14 with the discovery pass- and that works for all major operators as far as I know. The only issues really are that it isn’t particularly well publicised, and you need to know at the start of the day that you will be traveling a lot.
-It takes an hour and a half to get from Papakura to Albany (with 8 minute transfer time at Britomart)- and thats 50 km. His Toronto comparison ( Scarborough to Etobicoke), is only 35 km. So the average speed in Toronto is 35km/h, and ours is 33km/hour… shocking average speed for an RTN, but comparible between the two cities.
-I have never been left behind by a bus which was meant to stop for me… and I catch between 2 and 4 buses every day.
I completely agree with him about the fragmented services- especially having seen that Sandringham Road bus route map today! And the pricing structure definately needs an overhaul- which is coming.
Cant wait till 2013-2014… wouldn’t be surprised if that 50 minutes from Britomart to Papakura reduces to 35…. a top speed of 110 is probably double what we have at the moment, and hopefully when all the works are done trains wont have to stop all over the place.
The main problem IMHO is that the planning and coordination was privatised to myriad different competing companies. I’ve got no problem with private companies being paid to operate the buses and trains, but should they have the final say on how the network operates?
“Despite some inaccuracies in NZ’s taxes being high when they are in fact amongst the lowest in the OECD”
Tell that to the people at my work. Everyone’s moaning about their high taxes. And because they are getting some small benefits from the National tax cuts, they are blind to the fact that the really rich make oodles from it.
I don’t mind high taxes if the state’s services are good. Why would you throw away good PT or something like the Accident Compensation Corporation system just to lower the taxes by another point and let everyone fend for themyselves`?
But getting back to the article – yeah, sometimes an outside voice is good. That said, we can’t be doing ALL things wrong. We just need to use the twin forces of public transport renaissance (success breeds its own success) and a growining/intensifying city work for us and get PT ingrained in our cities again. If we are lucky, peak fuel may help us there, but I’d rather not bet on it, as it is too much of a wild card in many ways.
This article needs to be pinned to the wall of everyone involved with the councils. When it comes to what not to do we have won ourself the distinction of coming first
Can we put this on a billboard somewhere around Molesworth Street in Wellington? Also maybe if we spraypaint it onto the Aotea Centre.
@Sam: The Discovery Pass is a Clayton’s fare cap (and a relatively high one at that, it’s shouldn’t be more than $10 a day if you want people out of their cars). It’s not valid on several transport modes: http://www.maxx.co.nz/information/-pricing-passes/types-of-tickets/discovery-pass.html
Some minor points:
I recall that pre- the 1991 deregulation, the system was about as fragmented as it is now, and we didn’t have anything like a Discovery Pass. We did have a system of transfer tickets on the ARC buses, but I don’t recall that it actually worked.
Sam – concur; it takes an hour and a half to get from one end of the Portland Light rail line (the main one), to the other, and the distance is about 50km as well. Even rail public transport isn’t as fast as we think it is.
That said, I think the better option would have been what is done for London Buses, with integrated ticketing and centralised planning, but competition *for* the market instead of competition *in* it. The only fly in the ointment is that the cost of it per resident is probably about double what applies elsewhere in the UK. Labour could have gone down that path with relative ease. Why didn’t they?
Ross, I thought Labour did do exactly that by enacting the Public Transport Management Act. The only problem is that Joyce is going to soon destroy it.
Perhaps Auckland Transport needs to immediately review all bus routes and lock them all in as contracted routes where they collect all the money rather than NZ Bus – yet I don’t see much of that happening. I said once before that an alternative would be for AT to set up a Bus company CCO and let that bid for all the bus routes 😉 thereby playing Joyce at his own game.
OK – have just refreshed my memory of your 21st Feb post.
Following is a letter from Annette King when she was Minister of Transport, dated October 2008; this makes clear that the bus companies would have had redress if regional councils had gone down the ‘full tendering’ route.
http://www.wgtn-chamber.co.nz/Portals/0//docs/Annette%20King%20Letter%2017%20Oct%2008.pdf
I agree with the poster who don’t really care who owns the buses/trains, in PT it is about control and that is the issue that has lead to our problems… Even the WTO, that hard right bastion, now recommends a single organisaing company control all routes with this control going to 5 year contract tender, it seems everyone gets it but Steven Joyce…
“Sam – concur; it takes an hour and a half to get from one end of the Portland Light rail line (the main one), to the other, and the distance is about 50km as well. Even rail public transport isn’t as fast as we think it is.”
So that means the Portland Light rail, which runs in a mix of on street and off street, is faster than taking a similar length heavy rail and busway RTN in Auckland. It is also over twice as fast as street level transport in Auckland, i.e. buses.
Some good points in the article, but I agree with you Sam about the travel speeds – I am a kiwi expat living in Vancouver, and to travel 40km using public transport across the metro area will usually take you about an hour and a half (unless your start and end points happened to be at the start and end of the Skytrain line – from Surrey to Downtown or vice versa – then it would be about 45 min) It is generally still way quicker to drive from point to point. Having an integrated ticketing system is great through. Auckland will get there…eventually.
A couple of comments about the tax comparisons – one thing that isn’t so apparent when comparing taxation rates in NZ to North America is the amount of tax that an average citizen is usually able to claim back here – The top tax rate in Canada is 29% (on a single income over $127,000), which is less than NZ. As an example my wife and I have a two salary household income of close to CAD$200,000 and we jointly paid $16,000 in income taxes last year – well less than 10%. We don’t do anything fancy or dodgy to achieve this (no accountant) and are able to claim back most of it on all manner of things – including public transport expenses! As a wage or salary earner in NZ unless you have lots of kids it’s pretty tough to get much back out of the IRD.
Hey All,
Transit privatization is a terrible idea. I found a video that sums it up much better than I, and it uses Auckland as an example of a failed privatization experiment. Sounds like a disaster. Here is the link:
http://www.youtube.com/watch?v=xAmnmehAy3w