Yesterday the Green Party announced a policy of providing tertiary students and those undertaking apprenticeships with free public transport during off-peak periods. The details of the policy are:

  1. All tertiary students and apprentices will get free off-peak travel on buses, trains, and ferries with a Student Green Card. All students attending universities, wānanga, polytechnics and Private Training Establishments, as well as those training through New Zealand Apprenticeships, will be eligible for the Green Card.
  2. This will benefit up to 325,000 tertiary students, as well as approximately 28,000 people training under the New Zealand Apprenticeship scheme.
  3. Off-peak travel will be free between the hours of 9am and 3pm, and from 6.30pm until the end of service on weekdays. It also covers all weekends and public holidays.
  4. The Student Green Card will cost between $20 million-30 million per year. The costings are based on an increase in trips of 30 percent in response to the free travel on the Green Card, and would cost the Crown between $1.70-$2.20 per passenger trip. This will be funded by re-prioritised spending from the National Land Transport Fund.

All up this sounds like a university student version of a Super Gold card.

We’ve been skeptical of free public transport in the past because of its impact on costs, bus overcrowding and whether making PT free is the most effective way of increasing patronage (compared to, for example, spending that money on improving the system for everyone).

Like the Super Gold card the Greens policy reduces some of these problems by only applying in the off-peak period, when (theoretically at least, may not apply to some routes in Auckland) there is available spare capacity. Another advantage of the policy is that it’s to be funded out of the National Land Transport Fund rather than from general taxation, which means it’s money that most likely would have gone to building motorways that we don’t need.

However, it’s still an important question to ask whether this is the best way to spend $20-30 million a year to achieve the outcomes the Greens seem to be after: reducing the cost burden of transport on low income people and boosting public transport use. I tend to find myself agreeing with this tweet from Stephen Davis:

From a transport perspective, making particular trips free is unlikely to be the best way of boosting the use of a system. As Jarrett Walker notes, what we’re actually talking about is a trade-off between a fare cut (which some people benefit from) and a boost in service (which all people would benefit from):

If you want transit to be mainly for low-income people who have a low value of time, cut fares, as this is an improvement  targeted to benefit only the cost-sensitive.  By not improving service, this choice may also lead to an increased “stigma” around transit as it is perceived, with increasing accuracy, as a low-quality experience that is of no relevance to people who have choices.

If you want transit to be useful to a broad spectrum of the population, increase service.

From a cost burden perspective, it’s not that clear this is the best targeted policy either. We know from census data and other analysis (like John’s excellent post yesterday or Peter’s from a few weeks ago) that if we’re looking at reducing the financial burden of transport we should be trying to make public transport more attractive and affordable for people living in the south and west – probably people travelling to low-paid jobs rather than students who have pretty good transport options a lot of the time (especially if they’re studying in the city centre).

There are also a few slightly weird quirks in the policy:

  • Why should High School students have to pay to catch the bus on weekends but not university students?
  • Will there be huge pressure on exact 9am services or services just before 3pm in the afternoon?
  • What will the policy to do attendance levels for 9am lectures?
  • How do we stop operators ripping off the system, like it seems they sometimes have with the Super Gold Card in the past?

Overall, the policy is not terrible. There are good advantages of getting people used to catching PT at a time in their lives when they’re looking at moving out of home, potentially purchasing vehicles and making other key decisions that set in life-time travel patterns. However, on balance I just think there are probably better ways of achieving the goals the policy is aiming for. How about $20 million a year in scholarships for poorer students to attend University? How about a few million on bus lanes? How about making off-peak fares a bit cheaper (but not free) for everyone?

Share this

73 comments

  1. Good, balanced post – certainly reinforces that this blog isn’t a mouthpiece for the Green Party.

    Overall I am probably more positive towards the policy, mainly because it’s a much better spend than unnecessary new motorways. I also remember how much of my measly income I spent on PT as a student.

    1. It would be great to have a higher ambition for these policies and related spending than ‘not nearly as bad as some truly terrible spending’

  2. The government plans to spend $1.6bn on new roads in 2015/16 and even more in subsequent years. That sort of money would pay for the other improvements suggested here, as well as the free fares. Indeed, with all fares less than $400m a year, it’d also pay for all fares. Fares are a disincentive to using public transport. Not only is petrol often cheaper, but they slow bus boarding, lead to unruly behaviour and cost a lot to collect eg Hopcard cost $110m.

    1. Yes I shook my head hearing John Key berating the Greens for this policy, with words to the effect they were spending money ($20-$30 million) NZ doesn’t have. However when it comes to frittering billions of dollars on motorways it appears Key has a bottomless pit of cash.

      I don’t think the Greens fare policy is a bad thing and it can only encourage future PT use.

      1. That’s just politics. Anything ‘we’ do is a wise investment for the future. Anything ‘they’ do is frittering away money. ‘We’ and ‘they’ completely interchangeable between parties.

  3. Gotta say I completely disagree with this analysis. From a transport perspective it may be correct that maintaining the status quo and building out service is better for PT overall. However, targeting off-peak services(which are low utilization) by trying to attract the (one of the) most cost-sensitive demographics – which also happens to be the demographic most unlikely to need 9-5 type time-bound travel, is an excellent step towards a balanced transport policy.

    Infrastructure is clearly a huge component of the solution when it comes to PT, but it isn’t universally the solution. Students have been particularly hard-hit by the suspension of student allowances for postgrads, cuts in services at universities, etc. While the scholarship idea is a nice one, encouraging a demographic that would otherwise limit where they travel to get around and be part of the broader city’s culture can only be a good thing.

    You do make a key point that fares should be cheaper for everyone – and that is a notable point across the country. But that doesn’t mean creating solutions for students isn’t in the public interest. It is possible to overthink PT provision and focus too heavily on infrastructure in lieu of other sensible policy.

    That isn’t to say it is perfect or by any means that I don’t agree with some parts of it, but I think on balance it is far better than “not terrible.”

    The idea that the only goal of transport policy is to get people out of cars(rather than to support cost-effective mobility – which in most cases gets people out of cars) is a bit one-dimensional.

    1. Tom says it well here. Because it gives more funded seats to operators in off-peak hours (when the marginal cost of another body is near zero), it actually helps them become more sustainable, under current operating models. It will encourage consistent frequent services throughout the day, which will be good for everybody.

      Students are a group with time-constrained travel needs who can’t substitute or trade-down. They’re squeezed. Targeted, middle class welfare? Sure, for many. But it’s also lower class welfare for those without additional income sources who might be pushed out of training and upskilling. That’s a large benefit to both those people and to wider society.

    2. Thanks for your comments Tom. Having lower costs will enable students to take advantage of their potential time-flexibility (that is, the ability to travel outside of peak times) to pursue job opportunities and to ease the cost of living. Many students actually live quite a distance from their tertiary institution, particularly in Auckland. I know a lot of students who only come in for classes and don’t get the chance to participate in the ‘optional’ parts of the tertiary experience, such as seminars and other events that will assist with their learning. Also, many students don’t have cars (or only have them because PT cost is too high or service is not good enough). Letting students know that they have made a positive choice by choosing PT over a private car is a good thing, and will encourage them to consider PT as a valid transport option once they’ve finished their study.
      Of course this needs to be supported by service improvements and, hopefully, lower off-peak fares as a standard thing for everone. But I do think it’ll help to instill a culture of PT being normal and affordable, which should persist into the future.

    3. Hi Tom, couple of points:

      1. Is 9am off-peak? In Auckland I had full buses sail past at that time. Hence Matt’s emphasis on service improvements being a better option.
      2. Given a certain budget (there always will be a budget constraint of some form) then making fares cheaper for one group necessarily makes them more expensive for everyone else. So the question we need to ask is: Are we prepared to charge everyone else more in order to give cheaper fares to tertiary students?
      3. I agree that students are income constrained, as are many groups in society. The two questions we need to ask are: 1) are students the most income constrained and price sensitive sector of NZ society and 2) is cheaper public transport the most appropriate way to improve their lot?

      On balance, I think this is a bad policy from the Green Party. Mainly because:
      1) it’s likely to exacerbate crowding, not make it better
      2) it increases fares for everyone else, many of whom are more price-sensitive (i.e. in need) than students
      3) it doesn’t benefit tertiary students who walk/cycle to uni. In fact it may encourage them to stop walking/cycling and instead catch PT
      4) it primarily benefits tertiary students in Auckland and Wellington much more so than other centres

      In saying that the policy is not terrible and not really that expensive. It could also be improved, e.g. 1) define off-peak more carefully, 2) charge tertiary students full fare during peak periods, and 3) expand to other price sensitive groups. I’d also like to stop this crap of introducing “new cards” for all sorts of discounts. That’s a sure way to high admin costs. Better to implement through existing ticketing systems, e.g. HOP, where possible.

      1. Hi Stu. I think we’ve found two points of common ground: It isn’t a terrible policy – and instead of introducing all kinds of new cards there should be one discount card with defined features. The fiddling should be done around who it applies to. I also think its politically, rather than transport-wise, problematic to call it the green card. It will then immediately be a target for elimination upon a change of government if it is wrapped up in the party color. And charging full fare during peak periods.

        I think I’m undecided on defining off-peak more carefully because I am unsure what your proposition is for this more careful definition. Same with other price sensitive groups – other price sensitive groups may not have as much flexibility, as in a realistic of a shot of using PT for all necessary travel. Low-income families, for example, might actually find it far more cost-effective to own a vehicle to get around if they are trip chaining for multiple destinations of family members. Students are: highly mobile(the provision of PT will play a choice in where they live on an annual basis), highly price sensitive, and largely don’t have factors like children to consider when choosing primary travel mode.

        I think we disagree on:
        1. Exacerbate crowding? On balance most likely not. It only affects trips that board after 9am. Maybe you’ve seen specific buses pass by at 9am that are full but that is pretty anecdotal and it doesn’t include any evaluation of whether that relates to students. I’m flipping through some info about uni-bound debarkment and 8-9a is absolutely jampacked. 9-10a is by and large a ghost town. Encouraging the shift across the 9a line might require the cooperation of the university for scheduling purposes but will in fact create more capacity for fare-paying passengers in the peak, while creating a better business case for frequent off-peak service. Tokyo – when they reached infrastructure capacity limits ages ago – started engaging in timeshifting of corporate starts. That is an extreme measure but employing it in a unique case – like that of students – as a temporary fix while capacity steps up to meet demand is quite a good interim solution.

        2. This is only the case if you view the recovery rate as fixed, which is not true. The current recovery rate is a political construct.

        3. No, it doesn’t. And yes it might encourage them to stop walking or cycling. But planning for a multi-modal transport system with a lot of options, which people can then choose, rather than forcing them to do one because of economic challenges, is a better outcome. Walking and cycling is nice, but happy customers getting to actualize what it is they want to do is better. Panning a policy because it will reduce active transport by providing more options – despite making a better business case for infrastructure investment – doesn’t hold water with me. More importantly, public transport enables active transport and vice versa. If you want people to use active, they have to have an alternative for rainy/miserable/windy days.

        4.Certainly true, but as shown by the case at Massey, perhaps it will create more opportunity to improve PT in other Centres.

        I’ll pose one more point:

        Increasing off peak ridership is a key outcome of any national transport policy. It will create further reasons to increase frequency for off-peak services that are currently extremely poor(at least in Wellington). This will make it possible for more people to view it as their primary mode of transport for all trips, not just the Journey to Work. Sometimes the tail wags the dog in that PT analysis focuses too much on the peak because the best data is available there, but the poor off-peak service is by far the biggest impediment to making PT the primary travel option at the moment(at least in Wellington).

        1. Yeah, it’s a shit policy. But you know, the Greens can do no wrong. Nevermind they have no understanding of how tinkering with the market completely changes peoples’ behavior. Oh well, peace, animals, environment, hugs… Green.

        2. And it’s worth pointing out the numbers are complete and utter bullshit. $30 million? Good luck with that.

    4. > While the scholarship idea is a nice one, encouraging a demographic that would otherwise limit where they travel to get around and be part of the broader city’s culture can only be a good thing.

      Are students more likely than anyone else to be isolated from broader culture? I’d think that with all the opportunities that come on-campus they’d be better placed than non-students in a similar position.

      1. Don’t you want that vibrant campus culture to contribute to the broader city and vice versa? Isolating students to campus culture only would be pretty unfortunate. This is part of the reason Wellington is so awesome to live in.

        1. As another option, we could spend the $30 million / year moving the University of Canterbury into central Christchurch. Having the Universities was part of what saved Auckland’s central city, and being right there is way better than being far away but having a free bus. It’d be good for the university, and good for Christchurch to have another anchor downtown.

      2. I’m sitting on the fence with this one. However, I would note that students are generally the only demographic in NZ which are required to “borrow to live”. Superannuates and those on other welfare payments, don’t have to pay back their benefits. After 5 1/2 years of study, transport to/from uni, jobs, entertainment made up a not insignificant component of my student loan and a reduction in that cost would have been appreciated.

        1. Pushing this further to the view across the economy, I wonder what the annual economic impact of the foregone interest is on the portion of student loans that resulted from transport costs? As there is no interest accrued on that balance, whatever money is paid today may even be offset by the costs accrued over the lifetime of the loan. Interest-free student loans are a key policy that do a lot for creating a knowledge workforce, but if that interest-free money is just then getting cycled into the transport system, the accrued loss elsewhere in the economy might diminish the benefit of that payment.

          This would result in the fare paid today being a wash economically, so would actually create a pretty strong argument for making fares free.

          Probably missing something there though.

        2. To the extent that students should get more financial support, there’s no reason why that should be in kind, in the form of free public transport. Better to have it in cash, which you could choose to spend on public transport or something else instead.

        3. Based on my experience of being a student and seeing other students, I would say you are much better giving a discount then giving cash.

        4. Care to elaborate as to why? If you compare free PT to equivalent cash:

          * People who would have used PT anyway see no difference.
          * People who wouldn’t use PT either way lose out big: they get nothing, instead of cash.
          * People who would use the free PT, but wouldn’t pay for it if they had the cash instead, lose out a bit less: they get free PT, but would have preferred to have spent the money on something else.

          The only point in favour of free PT over cash is that in some circumstances it can cost less to provide – for the riders who only start using PT because it’s free. When they’re using capacity on “coverage” services that would have run anyway, but with fewer people on board. But then, why not spread that benefit around – simply discount off-peak fares for everyone instead of targeting students specifically?

        5. > * People who wouldn’t use PT either way lose out big: they get nothing, instead of cash.

          (Although technically, that’s not a cost of the policy either: they don’t use the free PT so the government doesn’t have to pay for it. It’s unfair, perhaps, but not wasteful).

        6. As a recent student I can assure you the likelihood of the cash budget going to discretionaries like booze or burgers out is far higher than a provisioned need. The provision of a free transport card would decrease demand for those needless items as a result of the more limited budget, creating a more efficient budgetary process for students. To use your taxonomy though:

          1. People who would have used PT anyway incur a cost to the economy, but secure a benefit in a less burdened budget – and benefit the system by choosing to take off-peak services. This then create additional capacity within the peak without further investment (given that major capacity improvement is stalled in both Wellington due to the Basin and Auckland due to the CRL delay… not a bad plan) plus adding to the business case for off-peak services.

          2. People who wouldn’t use PT either way don’t incur any cost in either situation, because they never step on a bus or train(the fares are NLTF funded). Giving them cash would incur a cost.

          3. People who would use the free PT but wouldn’t pay clearly see some benefit in the PT or they wouldn’t use it. It has higher utility than the other free options or they wouldn’t use it, and saves money if they are driving currently. They’re generating off-peak income(via NLTF) for service providers with no marginal cost to the provider, bettering the business case for off peak service as well as taking up less space on the roads by not driving(not that there is much benefit except carbon-wise to that in the off-peak). They’re focusing more on their studies instead of worrying if they can afford the next WOF. And they’re probably considering locating along public transport corridors improving the integration of land use and transport.

          Considering how inexpensive the policy is to provide…. not so bad. And considering it is so targeted, as well as not likely to be redirected into discretionary goods – also a win.

        7. > As a recent student I can assure you the likelihood of the cash budget going to discretionaries like booze or burgers out is far higher than a provisioned need. The provision of a free transport card would decrease demand for those needless items as a result of the more limited budget, creating a more efficient budgetary process for students.
          > considering it is so targeted, as well as not likely to be redirected into discretionary goods – also a win.

          Putting it as politely as possible: it’s none of your business what other people spend their money on, or to categorise other people’s lives into what they “need” and “don’t need”. Particularly if you’re going to fly in the face of most of this country’s cultural values by describing alcohol as “needless” 🙂

          If I may descend into naked partisanship for a moment: that paternalistic and bullying attitude affects a lot of political parties, but the Greens are one of the worst offenders. It’s an attitude that gives rise to exactly this sort of policy: arbitrary subsidies based on what they see as “worthy”, arbitrary taxes on things of which they disapprove.

          > People who wouldn’t use PT either way don’t incur any cost in either situation, because they never step on a bus or train(the fares are NLTF funded). Giving them cash would incur a cost.

          Yes, sorry, that was a bit unclear when I first wrote it. I’m comparing “free PT” to “other ways to assist students”, not “free PT” to “status quo”.

          The effect of the policy is just a wealth transfer to students. It’s kind of weird to do that from the NLTF, but that’s a separate issue. It’s also kind of out of scope for this blog to argue whether students should get extra support at all, or not – I’m just comparing this policy to alternatives that would do the same thing.

          > People who would use the free PT but wouldn’t pay clearly see some benefit in the PT or they wouldn’t use it.

          Yes, but they get less value than they would from whatever they would have spent the money on otherwise… since if they didn’t, they would have spent the cash on using PT in the first place! (and that would put them in group 1). The loss they face is the difference between those two values.

          > They’re generating off-peak income(via NLTF) for service providers with no marginal cost to the provider

          They’re not generating income. That extra money comes from the NLTF, as well – the government is free to spend it on PT, or not, regardless of this policy.

        8. Steve D: I agree with you in principle (cash is better in most cases) but completely disagree that “the Greens are one of the worst offenders”. After all, the Green’s haven’t suggested that cash is bad for these reasons, and I suspect they’d argue strongly against that. Rather, they’ve noticed that there’s excess capacity in PT (for which the marginal cost is small) and thus see this as a cheaper way to assist. At least, that’s what Julie Anne Genter has suggested.

          As for paternalistic bullying attitudes far as I can tell they’re no worse than any of the parties. In terms of civil liberties, they tend to be better in a bunch of areas such as drugs, but I’d agree that they perhaps could be seen as bullying others in that they’re much more keen on higher taxes to offset a stronger social safety net.

          Other Examples: National with food cards for beneficiaries – can’t have them buying smokes and alcohol and other bad stuff as they’re want to do. Hell, even the pretend libertarians (Act) have no problem on restricting stuff (e.g. voting) if it involves people in prison. So much for civil liberties!

          🙂

        9. @lefty:

          Full disclosure: I’m a member of the Labour Party, and you may now have a field day. (Yes, the paternalistic attitude is alive and well in Labour, too).

          > they’ve noticed that there’s excess capacity in PT (for which the marginal cost is small) and thus see this as a cheaper way to assist.

          The flip side of that is that the benefit is small, too. If people aren’t using off-peak services already, it’s either because they’re not particularly well done (bad routes or low frequency), or provide something that’s not useful to people.

          > Other Examples: National with food cards for beneficiaries

          I did say “one of the worst”, and National’s beneficiary card is maybe the purest recent example. I wouldn’t say there’s anything the Greens want that’s worse than that. But there’s a very distinctive way the attitude creeps into every aspect of detailed Green policy-making, long lists of Things We Like and Things We Don’t that doesn’t happen to the same degree with other parties’ policy. (Part of which is that the Greens actually have very detailed policy, but the point remains).

  4. A good post that highlights the issues positive and negative with the policy well.

    I suspect you’ll find (JAG was hinting on twitter) that this is a drop in the bucket compared to their primary transport policy which will come out in due course. My guess is this will include significant investment in PT, thus partially addressing the “why not spend it on buslanes/improved service” angle.

    However, I’m in general agreement with you. One presumes that the idea of going with uni students and apprentice is they’re basically targeting those that typically are for the first time living away from home (generalisation, obv.) and thus have transport needs that high school students in general don’t have (particularly as highschool students are in school from 9 to 3, where the policy applies.)

    It seems like a compromise policy. Peak services wouldn’t cope and if free for students, service for others would suffer. Keeping it off-peak only (apparently 70% of student PT use is off-peak) it’s way to take advantage of capacity while providing benefit to young people who are scarce for money. As long as it was decently negotiated cost-wise (as opposed to SuperGold), this might be a slightly more efficient way to spend that money than giving cash to students, though the ‘might’ would mean if it was my decision, I’d give them the cash instead and let them make the call as to what to spend it on.

    Certainly the free bus service in Palmerston North has had a positive influence on the city (though that applies to Massey/UCOL staff as well). Less cars on the road (significantly less driving to Massey and UCOL which is in the city centre) so there’s less congestion than there once was (not that there was ever much compared to Wellington + Auckland ofc!) That’s paid for by Massey and UCOL (costs around 1M/annum, bulk funded), so partially student fees one presumes for the student chunks. Across 35k students at Massey, though, it’s pretty cheap per student.

    That funding model works in Palmy, and I don’t see why it wouldn’t work in Auckland as well?

    1. > I suspect you’ll find (JAG was hinting on twitter) that this is a drop in the bucket compared to their primary transport policy which will come out in due course.

      Well, just like with Labour’s trucks-in-the-fast-lane policy from a while back, we can only talk about the things that have been announced, even if you suspect there is better to come.

      But more generally, this policy stands alone: it doesn’t have to be implemented in order to do anything else, and we should judge it on its own merits. Whatever other policies you might have, there’s always going to be alternative uses for the money.

      1. Agreed Steve, that it can and should be evaluated on it’s merits. However, if one of your arguments is “but that 30 million could fund a bunch of buslanes” and the Green’s go and fund buslanes to the tune of $300 million as well, then this is cherry on the pie stuff.

        i.e. we can critique it now, but need to revisit it once everything has been revealed (assuming JAG wasn’t bluffing ofc!)

        1. > However, if one of your arguments is “but that 30 million could fund a bunch of buslanes” and the Green’s go and fund buslanes to the tune of $300 million as well, then this is cherry on the pie stuff.

          Trust me on this: we will never run out of alternative uses for scarce resources, even if we limit ourselves to transport projects. If you justify spending $30m on this, you’re saying not just that it’s better than something else, but that it’s better than everything else you don’t end up funding, and also better than not collecting that money in taxes in the first place.

          My point is that we won’t have to revisit this: no matter what other policies the Greens announce, you’re still judging “the other policies and this one” versus “the other policies but not this one”, and that’s not really going to change based on what the other policies are.

        2. Thanks Steve – that was helpful for my understanding. I agree with you, but bear with me here, as I dig the hole a little deeper, to aid my understanding more than anything else! 🙂

          Consider that there is a list of things to spend $30m on in the transport + student support arenas. We could order said list (by either objective or subjective measures) from best use of funds to worst use of funds. Assume that in said list, this particular policy is ranked number 238. We can critique it now against the 237 other better proposals and deem it’s not as good.

          Then, if it turns out that the rest of the policies also take care of the first 236 uses of that money, all of a sudden number 237 is looking like the most attractive next thing to do, assuming, ofcourse, that “don’t collect the money in the first place” is lower than number 237.

          Clearly this is a silly example – the point is that policy merits or otherwise are relative, not absolute, and in the presence of other policy being implemented, the ranking might change. I think this is the same point you’re making, but you’re assuming (and I think you’re correct to do so) that there’s enough other options that we can ignore this effect completely (effectively making the 237 very large, thus other policy has little impact).

        3. > (effectively making the 237 very large, thus other policy has little impact).

          Yeah, pretty much. Even limiting ourselves to transport or student support policies I think there’s an essentially infinite dollar value of things higher up the list, including simply raising the student allowance or widening eligibility for it.

        4. Yeah – agreed in general that if their target is improving student welfare, that directly giving cash will likely have better, more equitable outcomes.

      2. “their primary transport policy which will come out in due course” – Green transport policy has long been at https://www.greens.org.nz/policy/transport-policy. It says, “Revise the targets and timetables set by the Government Policy Statement on Transport Funding to . . . Increase the supply of reliable and affordable passenger transport”. Those priority revisions are likely to be paid for from the $1.6bn, rising to $2bn a year, planned to be allocated to new roads at a time when traffic levels are stagnant. Out of that a student green card is “a drop in the bucket”.

  5. Students are already getting a pretty good deal on PT and are relatively well looked after in terms of price offerings. Once they cease being a student however, the pricing system for adults is such a disincentive that they go back to using cars. Its the adult PT price offers and incentives that need the attention – to be far more attractive during both weekday off-peak periods and on weekends.

      1. Students get a discount on the Cable Car in Wellington, although that’s fair enough since the cable car company bribed Victoria to set up on the hill in the first place.

    1. I mostly agree with you Rob but providing cheap monthly passes for students, but restricting it to off-peak would make it difficult for many of them and there’s no need to impose this limit.

      Cost is a huge factor – I know for myself that it is quite a bit cheaper to drive than use PT and this is with just me in the car and I’m only coming from Devonport. For many students on tight budgets it must also be cheaper to drive, especially if they can share a car. The number of students driving to University (and to high schools) is surely evidence that public transport is not cheap or convenient enough, yes?

  6. Anyone who isn’t bound to conventional working hours may find it cheaper to enrol in a paper at Uni once a semester to get the Green Card than pay standard adult fares.

    1. Possibly – costs for a single paper are usually in the vicinity of $500. That’d maybe get you 26 weeks if you’re lucky (actual semester is 20 weeks including breaks + exam period). Fairly borderline just for offpeak trips.

      But sure, maybe they’d also consider turning up to the courses as well every now and then? I don’t see the downside 🙂

      1. Years back I enrolled in a single course to get a student ID and discounts. I did it 3 about 3 years in a row and just enrolled in the cheapest course at Waikato Polytech. Usually it was a 1-day course (which I never attended) for around $40 plus in some cases I had to pay a bit extra for my student ID. The policy says “wānanga, polytechnics and Private Training Establishments” so perhaps an evening class in Film appreciation will qualify.

        1. When I was at Auckland Uni you had to provide evidence that you were a full-time student to be able to claim to tertiary discounts on PT (via the supply of the maxx sticker on yoour student ID). May not be the case now however.

  7. Paul Mees points out in “Transport for Suburbia” that free PT is not generally a good idea. Better is to discount the fares of target groups and thus get the users into the mode of PT use long term. Discounting fares has been covered before but I am now firmly convinced that this is the way to go and make the single fare or cash user nearer the level of full cost recovery. (I also believe that the use of special fares for those trying to dodge paying is the way to go perhaps at the full recovery rate.)
    SO while their heart is in the right place I feel it would be beneficial to revisit the principal and heavily discount the HOP or other cities versions of it to those who are in education or apprenticeships than to make the travel free.

  8. Good idea, but not quite complete I believe. What would I do?
    TARGETS:
    School students and tertiary students are the 2 groups to target for conversion to PT. IF we can convert these 2 feeder groups the future of PT will be incredibly bright. It is playing the long game. Ask Big Tobacco, McDs or Coke – seems to work a treat for them!
    TIMING:
    Open it up to the PM peak also – why? Because 10-20% of buses are not utilised in the PM peak with this being spread from 3-6pm as opposed to the morning concentration from 7.45-8.30am. There is also capacity on trains and ferries. This also aligns it with the SuperGold times and is easier to understand. AT will need to set up the Thales system to handle different pricing at different times of the day (currently cannot do this easily).
    OTHER OPTIONS: $1 flat fare for school students irrespective of distance.
    Free travel of weekends for school and tertiary students (same as SuperGold)

  9. I’ve mentioned the “U-Pass” scheme they run in Vancouver before, but I think its probably appropriate to mention it again as an alternative way of providing public transport services to students. Tertiary educational institutions vote on whether to participate in the U-Pass scheme. If they vote to participate, all students are obligated to purchase a monthly transit pass. Because participation is universal, the monthly rate is much lower than it would otherwise be: currently $36.75 per month for unlimited travel in Vancouver, compared with $52 per month for concession priced passes, and $91 (1 zone) – $170 (3 zones) per month for full price adult fares. Not sure whether one solution is better than the other, but its an interesting option. It doesn’t encourage off-peak travel like the Greens plan does, but it’s not “free” transit.

    1. Max Robitzsch mentioned on twitter that Germany had a similar system, although it was nationwide. But in terms of the effects, it’s going to be the same as if it was “free”. Your cost still doesn’t depend on how much you use PT or how far you go.

    2. This could be seen as similar to the Massey/Ucol scheme. It was student initiated, but they don’t get an annual vote on it, and the cost is obfuscated in the general fees for internal students (non-course related costs). It’s pretty cheap per-student.

  10. Does anyone know how super gold card pricing works? Cost of $1.70 – $2.20 seems low unless most students live city fringe. Will AT have to contribute?

    Good election bribe for students. Saving say $50 per week for 30 weeks of the year is a $1500 saving. More so if you head back to Shadows after 6.30 and catch the late bus home again.

    I also foresee a lot of lazy students catching buses down symond street from the dorms at the top.

  11. Hi Patrick,

    A $1 flat fare encourages PT and doesn’t penalise students travelling longer distances. Positive! A huge amount of peak vehicle requirements is due to the high proportion of Stage 1 & 2 usage (especially in buses, less so in trains). By having a flat fare it fills a lot of unutilised capacity. The beauty is the outright simplicity of this approach. In Perth they have a flat fare of 50c irrespective of distance for students.

    I do like the idea of having people pay a fare so that they value the service. This also limits the fare shock they might experience when they graduate and have to pay full adult fares.

  12. If you were being theoretically correct you would offer a discount during the peak periods as that is when the positive externality is highest. ie getting one more person out of a car has a huge benefit to the rest of the car users. At that time buses have an economy of scale so decreasing marginal costs while cars have an increasing marginal cost due to the road capacity effect.

  13. Green party analysts who love to pore over 100s of pages of policy docs just glanced at this, shrugged and said tl;dr

    For them it’s a good sound bite and mobilises a large voter group with green sentiments. That is all

  14. Now that I read through the policy document, I think the $30 million figure is complete bullshit anyway. Based on the Green numbers, if 67% of 350,000 students spend an average of $35/week on public transport, at 40 weeks per year that comes to $330 million a year that students spend on PT fares. (Even that sounds a bit low – but I couldn’t find a nationwide figure for the total amount spent on public transport fares, or what fraction of PT users are students).

    If even half of that travel is off-peak, that’s $160 million in lost fares alone, not $30 million. Then add the additional cost from extra trips and people shifting from the peak to off-peak…

    1. Apprentices will not be using that much, the vast majority of students outside of Auckland won’t, and half of that cost is already paid by council/Government.

      1. > Apprentices will not be using that much

        That’s entirely possible, but it doesn’t change the numbers that much: 325,000 of those eligible are university and polytech students, and only 28,000 are apprentices. Even if no apprentice ever uses public transport today, that only takes us to $306 million instead of $330 million.

        > the vast majority of students outside of Auckland won’t

        These are the numbers the Green Party put in their own policy document and press release, so I’ll charitably assume it’s also the numbers they are using for their costings. Their figures were an average of $35.40/wk nationally, and $40.50 just for Auckland.

        > half of that cost is already paid by council/Government.

        No, those figures are just what students spend on fares. The subsidies are on top of that (but they’d be the same either way, so not relevant to this analysis).

        1. Taking $300 million out of annual revenue out of public transport business cases is going to blow some of them out of the water. The Greens’ policy on business cases isn’t very consistent. On one hand they say that transport projects should be prioritised on cost-benefit ratio, but on the other hand they’ve announced they will build the CRL regardless of its poor cost-benefit ratio. It’ll be interesting to see if they decide that some projects are no longer justified, or whether they just jump through bigger hoops to disguise pork.

          (Note that I don’t have much problem with pork. Making promises at election time is just politics. Just don’t pretend you’re opposed to pork one moment while promising it the next.)

        2. > $300 million

          To be completely fair, $300 million is the total students spend on fares, including peak travel. Only off-peak travel would be free.

          > out of public transport business cases is going to blow some of them out of the water.

          That really just depends on how you do the business case. Gold Card travel subsidies count as fare-paying ridership in the farebox recovery ratio at the moment, so student travel probably would as well.

          In any case, under current policy settings, how much would it matter even if student travel did lower benefit-cost ratios? The NLTP system dedicates a fixed chunk of money to PT services as an activity class, and then decides which ones are the most valuable in a relative sense. Even if every project gets (say) a 20% worse BCR, it doesn’t change which ones get funded, or how much is spent on PT.

          It would change PT projects relative to each other, though – sucks to be Dunedin or Palmerston North!

        3. As an apprentice of the 1950’s era I resented the subsidies provided to the Uni students and and there substantial salaries when they were permitted to “PRACTICE” their chosen profession. It smacked to me of privilege and I see the same in this. There are few ways that an apprentice could use the proposed green card limited to off peak travel. I reiterate that for m,e the proposal should be to discount the Hop (or the other city equivalents) for all their travel. I understand that the U-pass was designed around a more rural university and that they provided some of the subsidy as well as there lecture schedule around the peak travel times. There is no mention of this sort of arrangement. If the Green policy is successful in providing an anywhere to everywhere pulse type PT system then I feel that the discounted system is a better way of achieving their goal of much higher patronage and use of the HOP card type systems.

    2. $30 million over 350k students would mean that each student would get a little less than $2 worth of free travel each week. No way! Maybe $30 million was just the cost of students popping over to Waiheke at the weekend?

    3. “I couldn’t find a nationwide figure for the total amount spent on public transport fares”
      http://www.transport.govt.nz/ourwork/tmif/accesstothetransportsystem/am023/ says farebox recovery is about 46%. http://ipond.nzta.govt.nz/reporting/performance/workspace/ihtml/OpenDoc?DocInstanceID=1&DocUUID=00000147386dac1d-0000-9c31-0a120385&DocVersion=1&isSmartcut=true shows total public transport spending a little over $500m. So the total collected in fares is probably just under $500m. Tertiary students don’t make up 3/5 of passengers, so your $300m figure must be quite a way out.

      1. > So the total collected in fares is probably just under $500m

        Nice find, that changes things a bit. I was just going by the figures used by the policy itself.

        Still, that suggests that the $35/wk for 67% of 350,000 students figures are wrong, though. Obi’s description is a pretty good way of putting it: $30 million across 350,000 is less than $2/week each person saves.

        1. $7 a day average for off-peak fares would be high, but that’s the total spend. The policy is about off-peak fares, so not all of the $7 will be saved by most students. Peak fares from students should drop, but that will reduce the extra cost of providing for increasing numbers at peak times and the new passengers (from the continuing growth in use) will be paying fares. Very few off-peak services will need increasing, so that cost should be low, just using empty seats. As 54% of costs already come from subsidy, the extra ‘fares’ from Green Cards will reduce the amount of that subsidy; the left hand paying the right hand, with not much net variation in the amount paid by government. Take all these factors into account, bear in mind that the Gold Card only costs $18m, and then $20-30m for the Green Card seems a reasonable estimate.

        2. > $7 a day average for off-peak fares would be high, but that’s the total spend.

          Yes, and I can’t find an estimate for what fraction of student travel is off-peak, beyond VUWSA’s Rick Zwaan being quoted that only a third of Vic students travelled during the peak. But even the conservative estimate I made of 50% travel continuing to be in the peak, you’re still looking at the difference between $17 per week and $2 per week.

          > Peak fares from students should drop, but that will reduce the extra cost of providing for increasing numbers at peak times

          Only if you cut peak-time services in response, which the Greens are (luckily) not planning on doing. In fact they’re planning on doing the opposite.

          > and the new passengers (from the continuing growth in use) will be paying fares.

          Yes, growth in the use of off-peak services will be low cost unless they manage to fill up. On the other hand, making that assumption also means admitting there will be no external benefit from all this extra ridership: if the extra ridership is just using existing capacity, it doesn’t improve access for anyone. It just makes an existing option available at lower cost to a select group of people. No-one who isn’t a student benefits in any way, and students only benefit as far as they are making trips they would have made before but couldn’t have afforded.

          But I was just talking about the cost that comes from losing fares paid by students already using public transport. You can claim that students will be lots better off because they will be able to make additional (low-value) trips, but you can’t say students will be better off financially by more than the cost of the policy.

          > As 54% of costs already come from subsidy, the extra ‘fares’ from Green Cards will reduce the amount of that subsidy; the left hand paying the right hand, with not much net variation in the amount paid by government.

          It will increase the amount paid by government by at least the amount students no longer pay in fares, plus anything extra needed to fund any extra services run in response to the increased demand. And the existing 54% “subsidy” is irrelevant: it’s the same under either scenario.

          > bear in mind that the Gold Card only costs $18m, and then $20-30m for the Green Card seems a reasonable estimate.

          I’m willing to believe that about the cost, but it means that the financial benefits are way less than what the Greens quoted and/or go to a much smaller group of people.

        3. You don’t seem to have taken account of the benefit of switching some student travel from peak to off-peak. It leaves more room for other fare-paying passengers (up 7.6% in 4 years – http://www.transport.govt.nz/ourwork/tmif/transport-volume/tv020/) without the need to increase peak services as much. Peak services are expensive, so getting the extra fares to make up for the loss of student fares, without having to increase services, gives benefits to everyone.

        4. How much is that going to happen, though? What fraction of students are, right now, travelling in during the peak, that are able to shift to later? At least when I was a student pretty much no-one would have shown up before about 10am unless they had a reason to – like their first lecture was before 10am, or were getting a lift with someone in a car.

          There’s also other options to shift the peak, like the government just directing universities and polytechs to start and end classes later in the day. Or the more straightforward discount of having lower (but not zero) off-peak fares for everyone.

          > Peak services are expensive, so getting the extra fares to make up for the loss of student fares, without having to increase services, gives benefits to everyone.

          You’re not getting any extra fares, you’re just replacing the fares you already had, and that’s charitably assuming you can somehow completely replace all that shifted patronage without increasing services.

  15. During the school holidays, the North Western motorway flows through much better. So if all tertiary students would take the PT system, there would be less need to invest in more tarmac lanes.
    It is really a cost? I think it would save quite a bit of money as well developing roads.
    And yes, if students become accustomed to PT, because they are the most likely demographic that can be influenced by monetary incentives, they could end up being the long term PT users.

  16. If students were to get a physical ‘green card’ / smart card – why not set all fares at $1 per trip.
    This $1 could be collected back by AT / councils (quarterly?) to spend on increased service improvement.
    Cheap (for student) and better (for public) service.
    Win – win??

  17. In Freiburg in Germany all enrolled students had free transport included in their student fees (and then subsidised via the student support budget). But, unlike NZ, the law requires the passenger to have the right “ticket” and the fines for fare ‘dodging’ are relatively high (Euro100). NZ law requires the transport company to ensure that each passenger has the correct ticket, and thus requires the waste of much money on “ticket gates” etc, and slow loading.

    The German law also meant that most of the ‘commuting population’ buy an annual or monthly ticket. A monthly ticket allows you to take another adult and 2 children on the buses, trams and trains for free on weekends. Fare-box revenue has dropped from around 50% subsidised (as in NZ?) to less than 25% subsidised over 10 years. The “every-one has a ticket” mentality also facilitates faster all-door loading and speeds travel schedules. Random mufti-inspectors are used to keep people honest.

Leave a Reply

Your email address will not be published. Required fields are marked *