This is a guest post from Leroy Beckett, Auckland Director for Generation Zero

Earlier this year, Auckland Transport announced that they would increase public transport fares to comply with NZTA’s farebox recovery policy, which requires 50% of operational costs to be covered by fares. This arbitrary rate results in more expensive public transport as more people are taking it, and consequently turns a public service into a commodity.

The farebox recovery policy punishes Aucklanders for doing the right thing, and is directly contrary to Auckland Transport’s aspirations to get more people taking public transport. So we launched a petition for AT to stop any further fare increases and for NZTA to review their farebox recovery policy.

Over 3000 people signed the petition in a matter of days, showing both a frustration at the increased cost and at an unfair system that punished them financially for doing what they had been incentivised to do.

Unfortunately it was not enough to stop the fare increases. But it led us to question the system that led to the increases, and if there was a better way.

The result was this, our Freeze the Fares report.

In it we explain how the farebox recovery policy commodifies public transport and hurts lower socio-economic communities. This is because the resultant fare hikes push the poorest out of public transport and back into cars. Unfortunately these people tend to be paying the most for public transport, as they are living in outer suburbs where rent is lower.

Our report further explains what methods other cities in New Zealand and around the world have taken to incentivise public transport usage, and to shift their reliance away from fares to cover operational costs.

We have also suggested similar courses of action for Auckland. It shows what is possible when public transport pricing is decided with the goal of getting people to use the services.

OUR PLAN:

DAILY FARE CAPS

FREE WEEKENDS

DISCOUNTS FOR STUDENTS AND FAMILIES.

Auckland’s public transport can take two paths. If the service continues to become more expensive, it will fail as a public service. However, if AT shifts its reliance away from fares, public transport could eventually become a primary mode of transport for all Aucklanders.

If this inspires you to take more action, you can send a message to Transport Minister Phil Twyford at the end of this page here.

If you want to find out more, you can read our short report where we outline our reasoning and details of each of the proposals here.

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64 comments

  1. As stupid as the farebox recovery policy is, it’s a bit of a red herring when it comes to this issue. Auckland has never hit the 50% target and to my knowledge NZTA has not been particularly concerned about that, especially in recent times.

    Ultimately every dollar not covered by fares needs to be paid for by Auckland Council rates and by NZTA. Well targeted fare reductions are almost certainly a good idea and the amount of extra funding might be small with the wider benefits being huge.

    But that requires the Council and NZTA to stump up more money. Not just to get rid of a policy that already seems to be ignored by everyone anyway.

    1. +1, I think AT is using it as an excuse. I don’t think any city in NZ other than Wellington has met this requirement in the last few years and the NZTA has turned a blind eye.

  2. I don’t think your claim that ‘fare hikes push the poorest out of public transport and back into cars. Unfortunately these people tend to be paying the most for public transport, as they are living in outer suburbs where rent is lower’ stacks up.

    The most recent fare increases were greatest for those travelling two zones not three or four.

    Agree with pretty much everything else you say though.

    1. Something more to add into the mix, though, is:

      People who are using PT instead of having a car will be hit not just for their commute to work, but for all the smaller trips they also do to cover errands and activities. Any adult without a car using the zones 3 to 8, with the 10 c increase, is likely to also do some 2 zone trips, with the 15 c increase. The poorest people generally have to have a car – and use it for all trips to justify its expense, OR not have a car, and be required to use PT for all trips.

      But you’ve also ignored the fare increases for tertiary students. Those increases are large, and a bit random – obviously to bring the relative fares in line with policy – but the fares increased by 20 c for 4,7 and 8 zones, with 15 c increases for 2 and 6 zones. Random, as I say, but definitely hurting the tech and uni students who live further out.

      I don’t think the statement is incorrect.

      1. That’s a fair point about student fares, I must admit I wasn’t aware of their changes as I don’t have much to do with students in my current life stage!

        I completely agree regarding making additional trips more affordable, there is no point someone using PT to get to work but having to still own a car (with all it’s sunk costs) just because extra PT trips cost too much. I think daily caps are a great idea in this regard.

      2. +1, yes, we gave up on the lots of little trips as a family after the new network came in & it was usable, as it was just too much. Four trips in one day: One Adult: $1.95+$1.95+$1.95+$1.95 then add on 3 kids say $1.05+$1.05+$1.05+$1.05+$1.05+$1.05+$1.05+$1.05+$1.05+$1.05+$1.05+$1.05, this is all one zone, try that over 2 or 3 zones!

        1. AT would of got $20.40 from us, but now we drive in that situation by and large and get nothing. We take up parking spaces & add to congestion & climate change etc etc and buses drive past usually fairly empty.
          Under this Gen Zero plan they would at least get $5 if I’m not mistaken.

        2. I wouldn’t mind children paying 50% or even 25% of a capped daily fare rather than free. I’m not too convinced by free except for real young children.

        3. And large trips too. Family of 4 from Papakura to Sylvia Park just return = over $20 (depending on ages of children).

    1. +1

      The Hon S. Joyce did a lot of damage while he was in the transport power-seat.
      And he was only ever a list MP. Never elected by anyone. One of John Key’s mates I presume.
      Now he is some sort of independent consultant, offering advice to boards of directors and chief executives.
      A huge relief when their toxic party was tossed out of office.

        1. +1, I loathe the idea that list MPs aren’t elected. List MPs are the *most* answerable to the electorate, as demonstrated by Labour only getting a handful in 2014 and NZ First getting none in 2011.

        2. “Not this rubbish again. He was elected by everyone who voted for National”

          When National was elected in 2008 no-one had any idea who would be Minister of Transport. Correct me if I’m wrong, but I’m not sure that the RoNS policy was even mentioned prior to the election, and the 50% farebox-recovery and PTOM certainly weren’t. Joyce unleashed these policies later on, after he was (or was not) elected.

        3. Dave this is a better compliant. RoNS was announced the Monday after the election, they didn’t have the courage to run on the empty and pompous little acronym…. (based on Thatcher’s failed and abandoned ‘Roads for Prosperity’ programme from the 80s)

        4. I agree with Patrick here. A vote for National was a vote for Joyce to be a key minister, but no one voted for RoNS as it hadn’t been part of the campaign.

        5. +2, he could have just as easily been parachuted into a safe National seat under the FPP system. People vote for the party not the person.

        6. You’re right. The damage Joyce did was wittingly or unwittingly sanctioned by everyone who voted National. Regardless of the electoral system. Democracy in action.

  3. Great work here Gen Zero, agree mostly…and let’s bring those damn Ferries into alignment whilst we are at it!

    Without trying to stereotype, we shouldn’t assume that lower socio-economic communities are all travelling multiple zones to work in the CBD, our really should be be pushing through Eastern Busway and LRT through Mangere to Airport working zones as quickly as possible to ensure easier and more frequent access to job zones. These work places should provide incentives for PT for their staff as they do with the ample parking provider in those lower land value work zones.

      1. At that price it would be a niche product – $150 requires 77 one-zone trips to break even for the month. But I agree, it is weird that there are no integrated monthly passes.

        1. The current bus/train pass is $215 so requires 110 one-zone trips to break even…. much more expensive than the ferry pass which is effectively one zone (or two depending on how you look at it).

          In any case, integrated fares across the lot really would be great. Oh and a pass option that doesn’t suck.

  4. If the council really wants people to use public transport they should make it free, Luxembourg public transport will be free from
    2020.

    1. Luxemborg already has an extensive network unlike ours…so, what’s your proposal for this, how would you make it work? Being as we aren’t a rich country such as Norway as you point out, how are you going to develop the network so it meets the demands of our growing population, pay for the higher frequency AND make it free, bearing in mind you’ve already said we shouldn’t even bother with trying to abate Climate change in NZ.

      1. From what I’ve gathered reading this forum fares don’t make much of a dent in the operational costs of PT networks, they’re all heavily subsidised buy local and central govt, so why should the punter pay again, when they are already paying through there taxes?

        What has climate change got to do with free public transport, I don’t care about climate change in relationship to New Zealand one little bit, it’s happening and there is nothing NZ can do to stop it, but a free bus or train would get more people out of their cars making it quicker for me in my car to get from A to B. That’s a win as far as I’m concerned.

        1. In Auckland fares cover just under half the operating costs of transit, so it is a pretty big dent.

          And sorry to break it to you, but fully subsidizing buses isn’t going to get any traffic out of your way. For that you need to restrict or price road access.

        2. Let’s wait and see what happens in Luxembourg before making assumptions you can’t back up.

        3. We don’t need to wait. The tried this in Tallin, Estonia five years ago. All public transport cards free for residents. They got more registered PT users, but traffic actually went up. People shifting from drivin g to PT were replaced by other drivers making even longer drives.

          “Dr Cats, who is based at Delft University of Technology in the Netherlands, found that the number of people in Tallinn using public transport instead of cars was up by 8%, but at the same time the average length of a car journey had gone up by 31%, which he said meant there were more, not fewer, cars on the road in the time they tested.”

          https://www.theguardian.com/cities/2016/oct/11/tallinn-experiment-estonia-public-transport-free-cities

          There have been several other cities who have tried this, they’re all since cancelled the scheme due to unsustainable costs and not achieving their traffic reduction goals.

        4. Luxembourg already has almost free PT, farebox recovery below 10%, it wont make any meaningful difference to ridership. Still probably a good idea; fares that low are likely not worth the bother of collecting…. Also the maturity of the system make it no value in comparasion to any NZ city.

    2. The price of fares is an issue for equity and individuals, but it doesn’t have a huge impact on total ridership in the long run.

      Most people who don’t take PT, don’t take it because it isn’t their best option. Too slow, to unreliable, simply doesn’t run when and where they need to go. To grow this market we need to make it their best option: more service, better frequency, better reliability, new and faster links, etc.

      Making it all free might give you a little kick at the margin, as a fraction of people might be willing to overlook all the reasons it doesn’t work well for them to save a few bucks. But if the full fare bus currently doesn’t get you to work or school or wherever reliabily, the free bus isn’t going to change that. Mostly, you just giving a windfall to all the people for whom PT does work, all the people who currently get value out of it and are willing to pay the fare.

      The main issue is to give the existing users a windfall, you need to come up with funding to practically double the existing subsidy… just to keep things the same. Free fares doesn’t create the missing services that people would need, in fact it runs a huge risk of the opposite: cut out around half the revenue overnight, and you need to cut half the current services to keep thing solvent!

      So again, just to keep things the same (let alone try and improve) with no fares you’d need to double the subsidy. In Auckland that’s something like an extra $200m a year… just to keep the same buses and trains running. But if you did have an extra $200m a year subsidy from the government, is that where you would spend it? Wouldn’t you rather spend that on better services and infrastructure? A quick back of the envelope suggests that would let us double the number of frequent service routes in the region, and run them all every ten minutes from 5am to midnight. Surely that would do more for more people.

      By all means, consider adjusting the fare schedule and farebox recovery to work better for Auckland. And look at bigger subsidies for students and children for equity reasons, and as a good loss leader (hook em while they are young!)… but wholesale free fares, I don’t think thats a good idea.

      1. You need to do both… that is reduce fares (not to free though) and increase frequency (which you’ll need anyway with the increased usage from cheaper fares). That way you reduce journey times (less waiting for a bus for example), also makes it easier to convert road space for bus/T3 lanes with increased usage.

      2. There are unused capacity during weekends and off peak. The additional ridership may not means we need to spend more subsidiaries.

        For example some bus could be almost empty during weekend. There is not much difference in cost if we heavily discount the fare.

        Also the current PT fare are not cost effective for big families during weekend with cheaper off peak parking.

        Driving a car with a family of five during weekend included parking is always cheaper than using PT.

        1. I agree with that. Clever targeting of fare discounts to times or places where you do have spare capacity is worth looking at, like GZ are talking about, just not wholesale free at the times that are already congested, don’t have capacity and people do already pay.

  5. Any data on how many councils actually make 50%? And what happens when they inevitably don’t make the target? I haven’t heard of NZTA ever being punitive

      1. No, carbon emissions is a completely different, albeit important question.

        My point is that when AT and NZTA address road congestion it is sucking capital expenditure that could be used for public transport infrastructure. For AT 200- 300 million per year. If we have PT pricing that reduces peak congestion then it is a win on many levels: less road congestion; less road spending; lower emissions: and lower fares certainly benefitting the working poor for whom transport is non discretionary.

        Of course once Auckland has the infrastructure we

    1. No, not appreciably. It might increase PT usage, but nothing with PT will get rid of congestion. If you are asking your transit to make driving better, you are asking the wrong question.

      1. “but nothing with PT will get rid of congestion”
        Really? NZTA in reporting to the Minister last November stated that the reason that the Harbour Bridge is not congested is because of the number of bus trips. Similarly the city is not congested because mode share for cars has dropped.

        The reason probably that congestion has not dropped all around Auckland is that AT and NZTA are doing things the way that they have always done them. Sure we have some new networks, but today we are embarking on the same discussion that we have for years, that PT prices are too high, and although not discussed today, the price of driving is too low.

        1. I don’t know about that advice to the minister but it sounds like it was a misinterpretation.

          The fact is the harbour bridge (or rather it’s approaches) and the Auckland city centre are throroughly congested at peak, and have been for a very long time. There is an important distinction there: modeshare for cars has dropped significantly, but not the actual number of cars. The modeshare shift has come from more PT users shifting the proportion.

          So for example, 1993 in Auckland in the morning peak two-hour period had 40,000 people arrive by car and 15,000 by PT. So car modeshare of 73%.

          Fast forward to today, we have 40,000 people arrive by car and 45,000 by PT. So car modeshare has plummeted to 47%…. but it’s still exactly the same number of cars, the roads are still full to capacity at peak and still carrying the same volume of traffic.

          Meanwhile, we are getting an extra 30,000 people into the city at the same time on the strength of transit. Yes modeshift, but only by more people being able to travel at the same time. The number of cars, and the traffic hasn’t changed.

          Exactly the same on the harbour bridge, 40% of users are now on the bus…. The bridge carries a lot more people but there isn’t one fewer car, still just as busy with traffic congestion as it was twenty years ago.

          At an academic level you could say that those extra 30k people into the city by cars instead would be more congestion, but it wouldn’t, at best it would be the same congestion for a longer period. But in reality, if you didn’t have the PT you just have 30k fewer people coming to the city centre and the same traffic congestion. Those extra people riding buses and trains don’t change the capacity of the road network. It’s still full. Generally speaking you’ll always have exactly as much peak traffic as you provide space for.

          So yeah, asking PT to reduce traffic is asking the wrong question. Ask it to move people and create great places instead.

        2. Nick, I think people sometimes look at the effects on congestion at key points on the arterials, and forget the effects on congestion on the length of arterials, and on the local roads.

          I think getting more people into PT by taking space from driving, will not change congestion at key points on the arterials for traffic. But I do think it will reduce the length of the congestion along the arterials, and on the local roads.

        3. “So yeah, asking PT to reduce traffic is asking the wrong question”
          This might well be the Auckland experience, but that is essentially because AT and NZTA do the same year after year and so things are likely to be the same.

          Mathematical principles suggest that reducing PT fares will have an impact on ridership (the last increases were predicted to decrease ridership by 800,000) and the consequence must be less traffic; unless you believe that any traffic gap at peak will be filled by transference from people driving at off peak.

          I am way more optimistic that price decreases can capture more ridership and therefore decrease car mode share. I would hope that the predicted mode share for the city of about 25% won’t simply mean that way more people are entering by train, bus or bike.

        4. Yes I’ve seen no data to suggest increasing ridership at peak decreases traffic, certainly not a strong enough relationship that it ‘must be the consequence’.

          If I may speculate, you seem to be using an assumption of fixed travel demand, ie a set number of trips that are just distributed differently between pt and driving, or perhaps across the day.

          I’m not sure I agree with that, there is some very good evidence to suggest trips are generated anew by better infrastructure/services, and that they can disappear when you remove capacity too.

          Or in other words, people travel more often and longer when it is easier to travel.

          I agree with the price to ridership relationship. I just don’t see the ridership to car traffic relationship. At least it hasn’t been observable in Auckland in living memory.

      2. Maybe not get rid of, but surely alleviate or stop from getting worse? There’s that classic image of 30 people in a bus vs 30 people in 30 cars.

  6. I reckon the 50% off should be based on age, not being a student. The kids who get low-paid, insecure jobs when they leave school, and the ones who are unemployed or disengaged from society all need access too. Indeed, these are the kids we most need to reengage. Anyone for whom home life or school life didn’t bring out the best in them needs opportunities – through hobbies or volunteer work – to start to see life in a more positive way. I think transport access is a big part of that.

    Practically speaking, it would be a huge benefit, too. No “validation” process or registering a card as a student required. You’d just have to show some ID with your age on it. And could validly lend cards to each other if someone’s forgotten their card or broken it.

  7. What’s the “farebox recovery” of cars? You pay for all your vehicle operating costs, your share of using the road, your car parking, lots of tax add-ons, AND a share of other people’s infrastructure such as PT and cycling.

    120%? 150%?

    I think only having to pay 50% is more than reasonable.

    Interestingly, the proposed Hamilton trains are likely going to have a farebox recovery of only about 10-20%, which is one of the reasons they won’t last long after the next change in government.

    Financial sustainability must take precedence over ideology for any initiative immersed in politics, or whatever you are trying to achieve with a project will not last any longer than the government administration that implements it.

    1. Actualyl it was just 52% last time I checked. Fuel tax, RUC and licensing charges cover 52% of total road capex, renewals and repair. 48% of the expenditure is funded by non-road user sources. I.e subsidized by property rates and general taxes.

      1. Oh and that is direct expenditure, doesn’t even take into account things like road policing and the healthcare costs of traffic crashes, let alone emissions, runoff pollution…

        1. Not to mention cars are private property, I don’t get Farebox recovery on any of my other belongings.

        2. That’s the point Joe, they are privately owned. Therefore their opex is 100% covered by the owner, plus they contribute to other things on top of that. Cars don’t get a 50% subsidy from other modes, like other modes do from cars.

          Infrastructure is another story. In that regard it’s all subsidised, be it rail or road.

        3. What’s the “contribute to other things on top of that” that you’re talking about? Economic activity due to access? How have you balanced that against the access it is preventing through severance, induced distance, and lack of modal options for nondrivers?

          And how does it compare with the costs imposed by driving? (Policing, climate change, air and water pollution, loss of soil carbon, health care, loss of life, congestion etc)

          Opex is 100% covered by owner. Costs most certainly aren’t.

          Europe’s detailed analysis shows that investment in PT provides a net win. Driving is a net loss, at spectacular levels. Investment in cycling and walking are bonanzas.

        4. The road network has huge opex that is paid for by public subsidy. Just look at the maintence and renewals budget. Hell, we spend almost as much on road *policing* as we do on public transport.

    2. Farebox recovery on Auckland’s rail network was 20 % in the mid-2000’s. National came in and did not can Auckland’s suburban rail, even they were aware this was an investment in growing a network that had been abandoned for so long.

      I see regional rail to the Waikato as being a very similar situation. By the time National are back in it will likely have already had improvements and potentially plans to bring in new rolling stock.

    3. This is from Stuff dated Mar 26 2019 cocerning the fare box recovery for the Hamilton – Auckland service ;-

      “Maintenance of the rail carriages earmarked for the Hamilton to Auckland passenger rail service will receive the maximum funding rate from NZTA.

      These carriages, estimated to be $981,000 per year will be funded at 75.5 per cent of the costs involved by the Agency using a targeted enhanced financial assistance rate.

      The Waikato Regional Council’s support for the project was subject to NZTA funding these costs at this rate. It comes after concerns were raised in February that NZTA would only fund the carriage maintenance at 51 per cent leading to speculation that the Council could withdraw its support for the project.

      NZTA’s board confirmed the funding at its March meeting.
      The Council’s Transport Committee chairman Cr Hugh Vercoe​ said the funding was subject to sign-off approval from NZTA’s chief executive.

      “NZTA’s board have said yes, they will pay the increased financial assistance rate. The chief executive will sign it off in the normal way.”

      That sign-off will take place once the carriages start to require maintenance once the service is up and running.

      Confirmation that the funding would be at 75.5 per cent was a relief, Vercoe said.”

      “It’s welcome news that the business case that we presented with all of the financials has been accepted by the NZTA board. I never had any doubts.”

      https://www.stuff.co.nz/waikato-times/business/111553262/nzta-confirms-maximum-funding-rate-for-hamilton-to-auckland-passenger-rail-service?cid=app-iPhone

      And that is after what was said here on Stuff dated Mar 01 2019

      https://www.stuff.co.nz/national/110920730/nzta-to-decide-on-passenger-rail-service-funding-shortfall-at-its-march-board-meeting

        1. Yes and at least something is now happening alas a we bit late though as TRON was hoping it would be up and running October this year but then again at least it’s happening

  8. After watching an episode of Chris Tarrent’s extreme Railways , he was traveling on a commuter train in Georgia and the fare was 1Larry [30p] or 60cents so AT take note and the trip was around 50miles [80k] why o why can it not happen here say during the off peak and weekends ?

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