The topic of free public transport is one that comes up every now and again and it has recently been raised by Mayoral Hopeful John Minto.

How about another hour at home with your family – every workday?

Heaven knows Aucklanders deserve a break from gridlock traffic.

I’ve lived in this city for 36 years and for the last 20 the quality of life has slowly ebbed away through traffic conditions no citizen should have to put up with. Despite the building of more motorways, express roads, adding lanes to existing roads, putting feeder lights on the motorways and all manner of expensive add-ons, the problem gets worse. With future growth we are looking at existing traffic congestion turning into hell on earth.

And there’s no end in sight. Prime Minister John Key says the Government will put $10 billion into funding for Auckland transport initiatives over the next decade but it’s really just more of the same – roads, roads and more roads with a smaller chunk for public transport in seven years’ time.

It also means we will be lumbered with wasteful spending on new roading projects which will NOT reduce traffic gridlock. Every Aucklander knows that when a new road is built it just gets you to the traffic jam faster.

The cost of just accepting it is too high. A report to the Government in March this year pointed to $1.25 billion in lost productivity every year from traffic congestion. And now Mayor Len Brown is telling us that we must find an extra $12 billion over the next 30 years to mainly fund more roading projects. His “consensus building group” is proposing petrol and diesel tax increases, congestion charges, network charges, rates increases and increased fares on buses and trains and we’ll almost certainly be lumbered with toll charges for both the second harbour crossing and the existing harbour bridge. And remember that none of this will end traffic gridlock. It doesn’t get much more stupid than that.

Isn’t it time we broke out of the dull mediocrity of policies designed for the middle of last century and looked at ending traffic gridlock in less than a year with free and frequent public transport?

Can we get an extra hour at home with our families every workday? Yes, we can, and at less than half the cost of John Key’s roads which would go on the backburner until the impact of this policy means we could plan with more certainty.

Imagine comfortable, modern, low-emission trains and buses, fitted with free wi-fi, providing free and frequent travel to all parts of the Auckland urban area.

That would get Auckland moving like never before. People will abandon their cars and enjoy faster travel to and from work. No cash, no cards – just jump on and go as far as you need to – checking your emails and the news on the internet as you go.

Everyone would benefit with the choice of either free public transport or travelling in their car on a gridlock-free roading network. Two great choices!

Sound too good to be true? It shouldn’t because it could be up and running within 12 months.

Based on present public transport usage the cost would be approximately $280 million annually (70 million public transport trips in 2012) although this would rise as Aucklanders flock to buses and trains. It would need an initial investment to increase the number of buses – approximately $400 million over three years to double bus numbers. Additional trains would come later as the inner-city link is completed and the rail system can more than double its capacity.

It would be funded from money already allocated for road building which would not be needed in the medium term – in other words no rates increases, no extra petrol or diesel taxes, no congestion charges, no fare increases, no toll roads and every Aucklander gets another hour at home with their family every workday.

It should also be seen as an economic stimulus package. Not only would it release the $1.25 billion in lost productivity each year but the extra money saved by those using public transport would be spent to give a substantial economic boost to the real Auckland economy.

The environment benefits as well. At present 56 per cent of Auckland’s greenhouse gas emissions come from cars and trucks. Public transport is far cleaner and greener and would significantly reduce Auckland’s carbon footprint. In fact this policy is probably the most important green policy New Zealand could undertake to reduce environmental harm.

I hope Aucklanders will give this proposal close scrutiny – question it carefully and support it enthusiastically when they see it stacks up. The alternative is too horrible to think about.

NEX Double Decker 7
Would our PT system be able to cope, even with double deckers everywhere?

Now there are some potential advantages to having free public transport, some are operational benefits while others less direct benefits. Let’s look at the operational benefits first

No cash handling

Handling cash can be a big issue for both bus companies and drivers. Companies obviously have to have processes and staff to reconcile all of the money and ensure that there is the right amount in the drivers cash boxes for the next day. Too little in them and staff might not have enough cash to be able to pay change – and we have seen some recent articles complaining about this. To much cash and the drivers can become a target for thieves looking to score some quick cash.

Being cash free removes these issues and means the drivers can hopefully focus on driving while the bus companies can hopefully focus on running their buses as efficiently as possible.

Faster Boarding

Many readers would have the experience of lining up to get on a bus but having to wait while someone in the queue ahead of you to fumbles around for loose change to pay their fare. This can not only be frustrating but on busy bus routes it can lead to delays as the bus gets slowed down. Not having to pay fares means that passengers can load on to a bus extremely quickly. This speeds buses up meaning that they can be more efficient and potentially allowing the same bus to complete more trips per day.

Some of the less direct benefits generally come from the fact that there is less cars on the road and can include:

  • Drastic decrease in emission of exhaust gases
  • Less noise
  • Less traffic jams
  • Better traffic safety
  • Enormous savings in energy and raw materials
  • Creation of new jobs
  • Efficient economical development
  • Considerably lower public and personal expenses
  • Empowering of social justice
  • Higher cultural dialogue
  • Creation of friendlier urban environment

However the key thing is that these benefits can be obtained simply by getting more people to use PT regardless as to whether it is free or not and as such should really be put to the side in the argument.

But of course there are also disadvantages to having free PT.

Overcrowding

Basic economics tells us that the cheaper the price of something, the more that people will use it. Removing fares from PT is likely to lead to much heavier use and while that can be a good thing, it can also have negative consequences. The primary one is that many buses/routes would simply be to crowded for many people to get on. Even putting more buses on is not likely to solve this issue leaving us with the issue of simply having shifted the congestion from our existing roads to the PT network. I suspect people are going to be much less keen to put up with consistently crowded PT services than they do with congested roads. Further because there is unlikely to be any form of ticketing system agencies like Auckland Transport will find it difficult to actually know where the capacity problems are making them difficult to address.

Costs

Leading on from the overcrowding issue, people would quickly start demanding much greater services to ease the pressure. Now that in itself isn’t a bad thing but it doesn’t come cheap. John does mention that more money would be needed to help address this but the amount suggested is simply not enough. We are likely to be talking about needing to triple – or more – our peak bus fleet and that alone would eat up the funds he suggests and that is before even talking about actually running them. To keep the number of buses moving we would also need a vastly more substantial bus priority network, just to keep the buses flowing and again that wouldn’t be cheap.

Bus Congestion

Like we found with the City Centre Future Access Study, another major issue would be bus congestion. Already this is forecast to at very high levels in and around the city centre and adding huge amounts of new buses isn’t going to help things. In fact it is much more likely to push forward the need for ever more expensive projects to increase PT capacity, much like we are seeing with roading proposals right now. While the PT advocate in me sees some positives in this, it also becomes very hypocritical.

I guess overall I think that there are some merits but that those are outweighed by the costs. There are cities that have rolled out similar schemes however as far as I’m aware almost all are much smaller in size and complexity than Auckland is. Most already have fairly well established PT systems that are much more easily able to manage the loads. Our network would need substantial investment to get to that kind of level and in the interim I suspect we would be looking at some very grumpy passengers.

Much of the benefits, including patronage increases, can come from simply getting more people to use PT and use it with HOP – which addresses most of the cash handling and faster boarding issues. That doesn’t mean that we shouldn’t address fares though and use them to target additional patronage. Addressing wider social issues – like how accessible the network is to poorer people – then that is something that could be dealt with through special fares or concessions. Similarly off peak patronage could be improved price differentials and/or group passes.

I guess I simply don’t think that now is the right time to even consider such a proposal, we need to wait until at least our PT system has matured a little and we have fixed the current problems that exist with it. But I’m keen to hear your thoughts. I’m sure there are both benefits and issues that I have missed. I’m sure you economists out there will definitely have something to say.

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52 comments

  1. It doesn’t have to be all or nothing. We could keep fares on the trains, buses that go to the central city and long, cross-town routes. We could even raise peak, CBD-bound fares – since that’s where the capacity issues are.

    But then the short feeder buses to rail stations can be made free off-peak, as sort of a quid-pro-quo for having to make the transfer to another (paid) service in the first place, and to maximise the benefits of services that probably won’t fill up even if they’re free.

    1. Or just have a zone based ticketing system where feeder buses are essentially free when transferring to rail and high frequency bus services like proposed.

  2. Time based price variations are clearly useful, as the marginal cost of extra riders off peak is free to low. So seriously discount off peak, this may very well be revenue neutral or positive as it stimulates uptake and is clearly a social good, and may take some pressure off peak loads and driving.

    HOP v cash price spread needs to be significant enough to incentivise higher to 100% uptake of the card. Clearly this would help meet a lot of the other goals above.

    Rather than supporting free fares, I question the policy of free parking at park’n’rides… charge for the park, then lower the cost of the ride… incentivise the Transit journey and not the drive.

    Main reason for opposing free fares- it would lower our ability to improve the service [less income] at the exact moment adding pressure on the existing system [stimulating demand]. Also it isn’t a very sophisticated use of pricing signals. Shouldn’t we be getting more sophisticated not less?

    1. “HOP v cash price spread needs to be significant enough to incentivise higher to 100% uptake of the card.” – I’m wondering how people would react to AT implementing a “pre-paid only” service, as Brisbane does. The “p” buses don’t accept cash fares. No card = no service. The buses run from the CBD along main routes and do seem (from my limited experience) to have a very high patronage.

      If we have a split between “P” vs “cash” of say 66% vs 33% during peak, that would incentivise uptake… Or kill public transport! 😉

      1. They really need to give away free hop cards especially in low income areas where it seems like plenty of people still use cash for short trips. If they wanted to trial free buses they could do it in south Auckland only just like the free pools which have been retained at 3 south Auckland pools

    2. The best idea I saw recently on here was someone recommending a one zone off peak fare.

      That would really incentivise off peak use which is the low hanging fruit as far as increased patronage goes.

  3. Thank you very much for critically engaging with the issue, rather than – as other forums and commentators have done – jumped straight to personal abuse of John Minto as a response.

    1. Yeah Doloras, I stopped reading pretty quickly over at the ‘other’ place. I think what it does do is highlight the fact that fares overall are too high in Auckland. Sure at peak they may be ok but the rest of the day they are too expensive, way too expensive.

      1. They’re too high at peak, never mind at off-peak. If peak fares remained static as service quality and frequency increased that might be acceptable, but right now we pay a lot and get very little.

  4. In other political news, NZ First MP Denis O’Rourke asked a transport related question in parliament yesterday and I’m pretty certain he thinks there will be light rail through the CRL. Maybe this is NZ First policy?

  5. A disadvantage of free PT is that it would make longer trips disproportionately more attractive, tending to encourage increases in the amount of travel and in sprawl.

  6. Actually AT did a trial today free trains in the evening — kidding seems they had a failure with the tagging system….

  7. The half way house is a heavily discounted fare for those that use HOP.

    Once HOP is fully implemented, the discount should raise to 25%-50%. The amount determined by some complex economic formula designed to increase patronage at a rate that the bus and ferry companies can cope with(ie. increased capital investment in buses). The new EMU should be able to handle increased patronage in the short term until the CRL is completed. The discount can be tweaked every 6 months to keep the balance right.

    Alternatively, increased discounts for off peak travel when buses/ trains run with surplus capacity. Getting people to shift their work hours will lower the amount travelling at peak time.

    1. I’m not sure on free transport, but there is a case for far lower fares to stimulate demand especially off-peak. A very large sum has been and is being invested in modern infrastructure and it just makes sense to extract maximum use. It would be interesting to see some good cost benefit analysis on free or low cost buses versus say additional roads. Others have suggested big discounts on bulk usage of the HOP card and I reckon this is the way to go.

      Probably the biggest concern for me is the changing political landscape. It is important for PT fares to be as consistent as they can be no matter which political party is in power……otherwise sudden changes in fare simply remove trust in those trying to build business cases for PT investment. The CRL business case will have been put together on the basis of a certain fare structure and has obviously now been taken seriously by political parties of the left and of the right. If you mess with the fares, you mess with the business case.

  8. I don’t free fares would be a good idea, but a half way solution is to heavily reduce fares in general.I would keep cash fares at a similar level to what they are now (maybe even raise cash fares higher for peak travel), but do the reducing at the HOP end. I would divide HOP in to two categories, one for Residents and one for visitors/tourists. Visitor/Tourist HOP fares would be about 25% cheaper, and Residents fares would be about 50% cheaper. One would have to apply for a residents HOP card with ID and proof of residency. This would ensure that only rate payers are getting the more subsidized fares as they would be the ones in the end paying for it (renters indirectly pay rates).

  9. This proposal does at least have people discussing transport fares, and there does seem to be a very strong case for a reduction in fares. It is barely cost competitive to catch PT vs using a car if you already own the car (which we know most Aucklanders do), and if you manage to add a second or third person to that car, there is no competition. Has anybody analysed the cost of our PT vs other major cities around the world? (if not, maybe AT blog would be interested?) Aside from Switzerland, I can’t think of anywhere that the cost relative to income seemed so high.

    Many people are suggesting on-peak/off-peak fares, but I think it’s also important to consider that higher peak time fares are basically punishing people for using PT at the time when it is most important for them to do so.

    Also, there needs to be discussion around how transport companies are paid and operated. Paying them per passenger per trip (as in the Gold Card scheme, I believe?) is an absolute joke. Costs don’t increase proportional to the number of passengers.

    1. A while back I did the maths against Vienna and Berlin, both of which I visited in September 2011 and made extensive use of public transport during my very brief stays, and Auckland’s public transport came out as more expensive relative to incomes against both; even relative to Auckland’s median income, which is about $300/week higher than the mean.

      Can’t remember the exact proportions – it wasn’t hugely divergent from Auckland’s median, though against the mean it was utterly damning – but what really killed it for Auckland is that public transport here is so woeful by comparison. Pay more, get less.

  10. Will nobody think of the taxi drivers? Actually, seriously – free PT would destroy the business model of taxis and throw a pile of people onto the dole. They would at least have to be considered.

    I have always thought that it would be a good idea from a wider civic society engagement viewpoint to make as much as possible free on Sundays – the museums, the art gallerys, the PT network… People could see exhibitions they otherwise couldn’t afford to get to or pay the entry fee for. Also, feree Sunday transport will allow drunken bums who have spent their grocery money in a club a way to get home that doesn’t involve a zig-zaggy stagger. Not that I would do anything like that.

    1. I think taxis need to change their business model anyway and start to tap in to the huge potential for (shared) demand responsive transport. We need some apps/ websites similar to http://www.faresharenyc.com/ that allow travellers to share taxis. Changing this model to allow travellers to state how flexible they are with their start/ leave time will gather more trade from people who might not have considered a taxi otherwise. The technology exists to do this, it’s just a matter of time before this becomes the way that we all order taxis (some comapnies e.g. Alert are doing little bits of this, but there’s no city-wide approach). Happy to explain how it should all look & work if anyone’s up for writing the code!

  11. Yeah Go ahead. What happens is the problems it creates will push for people to create creative solutions for it.. It will be cool , fun and get the city going. Sure problems will be created by us humans are great at fixing problems… take care

  12. If you increase cash fares you’ll never get people to switch to using PT. The casual user will try to catch a bus or train once, balk at the fare then associate PT transport as being far too expensive and never come back. And they’ll have a nice story about how pricey it is to tell others to dissuade them from trying it. If I were a car driver wanting to try PT for the first time I wouldn’t go buy a HOP (yes AT should give them away and drop the 25 cent top up fee), and load up some money or a monthly pass just to see how well the buses/trains worked.

    Simon

    1. Maybe have a $20 AT Hop card available for purchase on buses once they have been rolled out across the network. Get rid of the ‘no change’ and ‘where do I get one’ problem in one go. And there needs to be a serious difference in cash and AT Hop fares, 50% should be the minimum. This would discourage even the most infrequent traveller to have one.

  13. Living in Melbourne for a bit – it appeared that although most commuters prefer public transport in the week days, the weekends is time to embrace the suburban, urban memories of car use. Hence at some point they reduced Sat/Sun public transport travel to cap at $3.40 (or so) per day – it meant you could jump neighbourhood to neighbourhood, stopping at the shops you liked without spending up a storm on travel. Worked well.

  14. One thing that Minto is forgetting in his back-of-the-envelope calcs, is the resulting deficit in the fuel tax intake that will come about by less people driving. How will we afford all the extra PT then?

    1. Well the CRL isnt being funded out of any transport funds for a start – so that wont be affected. Key has said it will likely be funded out of money from the asset sales.

      It will be much more detrimental to roading projects than PT projects.

  15. If not free then at least cheap off peak fares. Say 930 to 230 and on weekends. And free hop cards. Or free off peak only with a hop card ? One disadvantage with the hop compared to the first old card- I forget its name- is that u can’t Pay for more than one person on one hop card.

  16. Actually there might be real merit in partially investigating/trialling this idea. The benefits in reducing traffic volume are undisputed, and economic savings might be achieved by deferring expensive road expansion projects if peak traffic volume can be reduced. So why not target peak traffic volumes directly by making public transport free for schoolkids and students?

    Free public transport for children and young people could provide us with a handy reduction in traffic around the two school peaks and would really help children from poor families. And for regular car drivers, everyone has seen how much faster it is to get around during school holidays, so there’s a possibility of enjoying some of that benefit all year long.

    1. Even $100 would work for most people. Say $50 for unlimited travel within two adjacent zones (nominate a “home” zone and a neighbouring “away” zone), and $100 for unlimited travel within all three (or four, I forget what’s proposed) zones. Anyone who drives is spending more than $100/month on petrol, never mind all the other costs of owning a car.

  17. I cant really say I am in favour of Minto’s scheme, but not so much for the reasons Matt ahs put forward, more just that even suggesting it makes all PT advocates look a bit nutty.

    I dont have the same concerns re overcrowding as I believe supply and demand would sort that out pretty quickly. Anyway, I suspect that there are a lot of Aucklanders who would never step foot on public transport if you paid them (e.g. the high caste members of our society who sometimes grace the blog with their presence) and a lot of others who it just wouldnt work for.

    When I lived in Prague the Metro wasnt free but at the equivalent of NZ$250 for an annual ticket (often paid for by the employer) it may as well have been. Even for the average Czech that is very cheap. For tourists buying 2 hour/30min tickets it was far more expensive.

    Interesting to see the effect on Tallin which introduced free PT in January 2013 – reportedly a 15% drop in traffic – that is pretty impressive:

    http://www.huffingtonpost.com/2013/04/04/estonias-capital-introduces-free-public-transportation_n_3014589.html

    http://www.tallinn.ee/eng/tasutauhistransport/Tallinn-Free-Public-Transport

    And other Northern European countries are looking at it:

    http://www.tallinn.ee/eng/tasutauhistransport/Experimenting-with-free-public-transport-in-Finland-deemed-worthwhile-by-the-Minister-of-Transport?&filter_otsing_uudis_rubriik_id=160

    http://www.eumayors.eu/news_en.html?id_news=460

    Note it is only for residents who must get a “green card” and prove they are residents. Non-resdients can also get a card but thye need to load money on it.

    Estonia is, with Slovenia, probably the most successful ex-Communist state so you cant just write it off as the policy of a fringe state.

  18. Why not a flat fare system of $5.00 for adults, $2.00 for Goldpass holders and $2.00 for children regardless of distance travelled on the bus network (only) for casual bus users and backed up with ‘Tap & Go’ Hop, Visa or Mastercard card or smartphone and regular Hop users get 10-15% discount.

    Tagging on once is quicker then the need to ‘tag on’ and tag off.

    No tickets, quicker bus loadings, almost the same as free travel.

    The flat fare system can be use on the trains backed up with ‘Tap & Go’ Hop, Hop, Visa or Mastercard card and smartphones.

    Using ‘Tap & Go’ payment technology and the flat fare system for buses and possibility trains, will increase passenger numbers, as it make it easier, as there is no need to work if you have enough money for a bus fare, also it easier to remember.

    Has anybody worked out what is the average bus fare in Auckland?

    1. That is basically the system in Chch – except that after you tag you have unlimited transfers and travel for two hours. You still need to tag but no fare is charged and there are no zones.

    2. $5 is pretty steep. That’s nearly a four-stage journey under the current system. Good value if you’re further out, but get within about 15km straight-line from your destination and you’re starting to talk about a very, very expensive journey. 15% is much, much too low as a discount, too. 50% or more.

      1. A flat fare system is more cost effective for the bus operators.

        Cash only passengers drop their money in a secure collection machine on boarding, so the bus driver does have worry about change and issuing tickets.

        Students and Goldcard Holders will have to show their Student ID or Goldcard for a $2.00 travel when dropping their cash in the collection machine on boarding the bus.

        Bus operators (and possibility the transport train operator) will gain on short trips and may loss on longer trips, as bus or train operating costs for a ‘Point to Point’ travel still remains the same, so there will be gains on short travel and loss on long travel which should cancel each other out.

        Public transport fares are got to be simple both for the casual and frequent user.

        By having a flat fare system, it is easier to remember for all users.

        Secondly, it encourages more people to use PT. It is called ‘Convenience’ transport.

        If a user only travels 2-4 times a month, then $5.00 for adult is affordable but if the user travels 10 or mores times a month, a Hop card would be a cheaper option hence a ‘frequent’ user discount.

        Also, by only ‘Tagging on’ once as oppose’ tag on/tag off’ which adds delay to a bus/train timetable, will speed disembarkation from a bus/train.

        With most Visa/Mastercard credit/debit cards and smartphones that are ‘Tap N Go’ capable, it will encourage more people to use PT.

        So keep it simple, more people on PT less cars on the motorways.

        By the way, if any of you have a Air NZ Onesmart Mastercard debit card, you will get Airpoint Dollars whilst travelling on Auckland PT network ;-).

  19. yep I`m with George, I mean, come on folks “free” you know “Nada, Zerosky!” Hell if it saves you some money, damn I`m all for it hard John.

  20. Just saw this by Jarret Walker:
    http://www.humantransit.org/2013/07/the-vagrancy-argument-against-free-fares.html

    Seems to pretty much back up what Matt was saying, the main problem would be a huge uplift in patronage that the system couldnt handle. It is a good ppoint that he makes about Tallinn – you can only get free PT is you are a resdient and apply for the free card. Tourists, non-residents and casual users who cant be bothered to apply still pay fares – so that deals with the vagrancy issue really.

    I think offering a very cheap annual fare for the whole Auckland metropolitan area (say $1,500 for the year) and allowing employers to offer this as a benefit to employees (just like free parking) would be a great middle way.

    This works well in London and Prague where I have experienced it.

    1. “offering a very cheap annual fare for the whole Auckland metropolitan area (say $1,500 for the year)” not very cheap to my wallet!

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