The draft Government Policy Statement clearly indicates that the Government are keen on encouraging more people to use public transport. In the release for the GPS they state this about the 46% increase in funding for PT:
- This will support an expansion in public transport networks.
- This will support an increase in operating subsidies for public transport and some public transport capital improvements
While Back in February, Transport minister Phil Twyford recently provided this insight into their thinking:
What if Govt policy said to Councils please maximise shift from single-occupant cars to public transport/walking & cycling…you reduce PT fares and increase services to drive the shift and we’ll support by increasing subsidies?
— Phil Twyford (@PhilTwyford) February 17, 2018
He notes an intention to potentially both lower fares and improve services. Of course even with a 46% increase in funding not everything can be achieved and so with a fixed budget there is always a choice between the two. Jarrett Walker explains this trade-off really well:
The high-level answer is pretty simple.
- 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.
Cutting fares is good for lower-income people, while increasing service is good for almost everyone, including many low-income people.
Improving services should definitely be the first focus for any extra money the government wants to invest into public transport operations. The much promised “new network” is already compromised by pathetic weekend rail frequencies and funding shortfalls that mean routes initially promised to be run as “frequents” (operating at least every 15 minutes, 7am-7pm every day) won’t meet that definition.
Once the core of the new network is in place, AT need to work towards having more frequent routes, and having more frequent frequent routes. By that I mean we need a larger number of frequent routes and we should be aiming to improve the minimum frequency from every 15 minutes to every 10.
That said, if Auckland’s fares were unusually high and a major cause of our relatively low level of public transport use, then potentially reducing fares could be the way to go. I benchmarked Auckland against a number of other cities about a year ago and that showed our fares are comparatively quite high:
In recent years we have introduced zone-based fares, which I has made us a little more competitive with other cities and has brought the cost of “cross-town” trips down considerably. As an example, if you avoid the city you can now travel from Pt Chevalier to St Heliers for under $2 on a Hop Card because it’s all in the same zone, whereas a few years ago this trip would have set you back at least three times this cost.
Overall I probably lean towards the same position as Jarrett – let’s spend the money on improving services rather than dropping fares. However, there are some clear opportunities for targeted fare discounts that could make sense. These include:
- Off-peak discounts — Off-peak travel is more price sensitive, has much lower marginal operating costs, and there is usually spare capacity. On the down-side,
- off-peak travel doesn’t generate large congestion reduction benefits;
- it would cover a surprisingly large proportion of journeys undertaken on the network, so could be expensive; and
- some people travelling during off-peak periods, such as visitors, are not price-sensitive.
- Bulk discounts — Pre-purchased annual passes in places like Switzerland are extremely popular, and help people/companies minimise transaction costs and qualify for a discount by committing to PT in advance. Even with monthly passes, which AT have been trying to price people off, I’ve noticed a big difference in my usage and perception of PT when I have one compared to when I don’t i.e. I’m more inclined to want to use PT if I have a pass. Having good pass options could also become a real alternative to a company car or parking space (as long as fringe benefit tax anomalies were worked through).
- Concessions — It seems like are some inconsistencies in how we provide concessions, with current concessions mainly focusing on age and whether you’re studying. In particular, there is currently no concession for those on welfare. It certainly seems odd that wealthy pensioners can get free public transport to wine and dine on Waiheke Island, whereas struggling parents rushing between jobs in South Auckland have to pay full fares.
Over the next few years, as we build City Rail Link, Light-Rail and a number of key busway corridors, I think our public transport system will come under huge pressure as demand continues to grow but the system’s capacity is still in the process of being expanded. There may well be a strong case for encouraging more people to “time shift” out of the peaks, and providing an off-peak discount could be a useful incentive for this – even as a short-term measure.
So perhaps the answer is “a bit of both”. Mainly focus on improving services and growing the frequent PT network, but also look to apply targeted fare discounts – particularly if this helps to “smooth demand” and avoid severe overcrowding.