The regional fuel tax (RFT) came into effect yesterday and will used to fund a wide range of projects over the coming decade. But it will also be interesting to see what impact it might have on how people travel. Will we see more people looking to catch public transport, walk or ride a bike?
How do fuel prices compare
From what I’ve seen, the immediate aftermath of the introduction of the RFT has seen petrol prices jump to around $2.30 per litre. This puts the cost of fuel at or close to the highest it’s been – but we’ve had fuel at similar levels before. This shows the weekly price of fuel over the last 14 years.
Over the same timeframe we’ve seen huge increases in the use of public transport and more recently cycling. But one thing that is notable is that use alternative modes of transport continued to increase strongly even when fuel prices fell.
So what impact do fuel prices actually have?
The NZTA has an ongoing research programme that looks at aspects of the transport system. Back in 2013, they published this research from titled Econometric models for public transport forecasting. It is described as:
This paper presents the findings from an econometric analysis of public transport patronage growth for a selection of New Zealand cities: Auckland, Wellington, Hamilton and Tauranga. The primary objective of the econometric analysis was to provide an explanation of historic growth patterns and, in doing so, provide up-to-date public transport elasticities for use by transport planners and policy analysts.
Here are some of the key findings.
- On the Auckland bus network, a 10% increase in real fares caused a 3% fall in patronage and a 7% increase in revenue. The impact of fare increases on the Wellington bus network varied by situation and appeared to have been distorted by the introduction of the SuperGold Card. Fare increases on the Hamilton bus network had no discernible impact on patronage.
- On the Auckland rail network, a 10% increase in real fares caused a 9% fall in patronage (during the peak) and hence only a 1% increase in revenue. Similarly, on a Wellington rail network, a 10% increase in real fares caused a 7% fall in patronage and a 3% increase in revenue.
- There was strong evidence of complex and non-linear responses to petrol prices, ie the crossing of the $2.00 nominal petrol price in 2008 was associated with a ‘jump’ in patronage.
- After controlling for the ‘threshold effects’, general petrol price moves had a modest impact on patronage in Auckland and Wellington – a 10% increase in real petrol prices caused a 0-2% increase in patronage.
The RFT equates to less than a 5% increase in the price of fuel so does that mean perhaps about a 1% increase in ridership. Or will the nature of the RFT, coming all at once and covered extensively by the media will have a similar effect to petrol passing $2 and see a lot more people reconsidering their options?
The analysis is also interesting when we think about what’s been happening with PT use – for example does it help explain why growth of the rail network has stalled over the last few months following the increase in PT fares?
One thing that is certain is that we now have a lot more, and more accurate data from when this research was undertaken. With HOP, AT and/or researchers should be able to much more easily see how usage changes in relation to things like fuel prices, fare changes and service improvements. With the case of the RFT in particular, it is coming at a time with fewer other factors driving usage so could provide a fascinating case study, especially when we think about the impact that road pricing could have.
Below are a few of the metrics we’ll be keeping an eye on.
Public Transport Ridership
As we know, ridership on PT has been growing strongly for many years and the data for May shows that trend continuing. There were the same number of working days in May-18 as May-17 and overall ridership for the month increased by 4.5% and is up 5.6% on a 12-month rolling basis. Within that:
- Bus use been leading the way this year and May continues that trend, increasing by 7.3% for the month and is up 6.5% on the 12-month measure
- That includes the Busway which increased by 11.9% for the month and is up 12.2% annually.
- Rail trips have been flat this year and in May fell by 3.2%, however the network also saw significant disruption after the derailment of a train in Britomart. Over the 12 months usage is up 4.5%.
- Ferries have also been flat this year and fell by 0.1% for the month. On a 12-month basis they’re up 0.2%.
Like PT, bike counts have also been showing good growth with levels above population growth. Auckland Transport now has 40 automated cycle counters around the region. The oldest ones have been in place since late 2010 and they’ve been adding new ones when new cycleways open. If we compare the total number of trips on all counters that were active a year ago with the same counters in May we see there was a 6.4% increase in trips. On an annual basis, those with at least two full years of data, there is 6.5% increase.
Some counters are still showing excellent growth, such as the NW Cycleway at Kingsland which is currently growing at about 15% annually and is only likely to get more popular soon when the Ian McKinnon cycleway opens up, removing the climb up to Newton Rd.
The data for the Quay St cycleway counter just west of Albert St is even available daily.
City Centre counts
For some time now, AT have been counting how people enter the city each morning and the data has been collected monthly since the beginning of 2015. Over that time, the number of people entering the city in the morning has remained relatively static but how they’ve arrived has changed noticeably. Fewer people have been arrived by car and since May last year that dropped to less than 50% of people. The graph below shows the 12-month rolling average but in March this year, the number arriving by PT was actually higher than those by car.