Auckland Transport have announced the outcome of their annual review of public transport fares with the changes coming in to effect from Sunday 11 February. AT are clearly into recycling as one thing I noticed is that the fares being changed, the amounts they’re being changed by and even the press release are all almost identical to the 2017 changes. That is in that the changes target the shorter 1 & 2 zone trips as well as the 4 zone trips whilst dropping prices on the medium distance, 3 zone fare. The major exception to this is that apart from some ferry fares, the changes this time are all to the HOP prices. Almost 90% of bus and train trips are on HOP so the majority of people will be effected in some way.
As mentioned, the press release is almost identical too, highlighting the farebox recover targets plus talking about bus lanes and more double deckers. Here’s what they say:
Bus, train and ferry fares will be changing from 11 February 2018.
Auckland Transport reviews fares annually to ensure they keep pace with operating costs and the portion of costs recovered from fares.
Colin Homan, Group Manager, AT Development says Auckland Transport has a target to recover 50 percent of the cost of public transport from fares, but this is currently at 46.2 percent, with the balance subsidised by ratepayers and taxpayers.
“Over the past year AT has added a number of new services and more capacity including the roll out of new bus networks in West and East Auckland, the addition of more bus lanes to improve travel times, and the introduction of more double decker buses, bringing the total double decker fleet to 89.”
In the year to the end of December, 91.1 million trips were taken on public transport in Auckland, an increase of 7.4 percent on the year before.
The changes for bus and train fares include increases to 1-zone, 2-zone, 4-zone and 5-zone fares of between 5c and 15c and there will be decreases to 3-zone fares of 5c for adults and 8c for children.
There will also be increases of 7c to 10c for tertiary fares to ensure concession consistency across zones.
The table below shows the changes for the bus and train fares.
A quick calculation suggests that for people that use PT for their commute all year, the 1, 2 and 4 zone increases will result in paying about $23-$69 more annually.
Below are a couple of thoughts in response to the news:
Auckland Fares already some of the most expensive
As has been pointed out numerous times, including by Stu last week, PT fares in Auckland are very expensive compared to many other cities. These changes will do nothing to improve that situation. While the farebox targets do have something to do with it, AT has focused fares on competing primarily for individual commuters who would otherwise drive and have to pay for parking. This makes PT expensive for non-peak trips or for travelling in groups.
AT need better timing
Raising fares is never good for encouraging more people to use PT. However, I do accept the need to adjust them from time to time and at least the changes for the most part aren’t too severe. But I do wonder about the timing of the changes being right as we’re heading into the busiest time of the year. February and March are some of the busiest months of the year for PT use. They’re also busy times on the road and when AT are quite likely to get new customers trying services. Exactly the wrong time to have headlines about fares changing. Perhaps AT need to shift future changes to the middle of the year to get around this or perhaps even make the changes on New Year’s day, like Melbourne does (the changes would need to be announced in early December).
What’s driving the cost increases?
Ridership has been increasing strongly over the last year. As AT note, PT is up 7.4% on a year earlier and yet the farebox rate has still declined. That suggests costs have been increasing at a faster rate. Some of this will likely relate to the roll out of the new network but AT really should be clearer about what’s driving the changes.
Get back to the new network principles and stop the silly trials
Over time as AT consulted and then started rolling out the new bus network, we saw them continue to move away from the core principles behind the network in response to feedback/complaints. This has led them to retaining some expensive to operate services, such as peak only express buses. Some numbers that we’ve received from AT show that many of these have very low utilisation. That’s resource that could instead have gone to ensure that the rest of the new network could roll out properly.
On a related note, they’re also wasting money on things such as the silly Devonport shuttle trial when basics such as all day rail frequencies, continue to be ignored. AT need to look at how to refocus on how to get a frequent, reliable PT network established before getting distracted on the next tech idea and/or fad.
Is it time to rethink Farebox targets?
One of the main reasons AT give for these changes is to help get the farebox recovery ratio, the amount of costs covered by fares, over 50%. The farebox rate did briefly get over 50% in mid-2016 before simplified fares rolled out and has been in decline since then. This has mainly been driven by a reduction in bus recovery rates, some of which will be due to the impementation of the new network. As you can see in the graph below, rail has been improving quite a bit over the last few years following the impressive growth that’s been seen, although that’s starting to slow down now.
While there’s not much that can be done to affect this round of changes, we think that the new government need to take a look at how PT is funded. The 50% farebox target was an arbitrary number from the previous government that had no assessment behind it. Whilst it sounds good in theory, it’s a really blunt instrument that is likely meaning we’re not extracting the most value out of our PT system. For example, a lower recovery rate might mean we can improve services and encourage enough additional people to use PT that it more than makes up for the extra cost to tax/ratepayers overall.
We think that there could a valid case for the government to increase their contribution, thereby lowering the farebox rate, to ensure that AT can not only roll out the new network but also that it has enough frequency to be successful and gain ridership. This includes ensuring that rail has all day frequent services so it can act as the backbone of the PT network as planned.
Will the change in fares affect you’re PT usage?