Every weekend we dig into the archives. This post by Matt was originally published in July 2013.

The topic of free public transport is one that comes up every now and again and it has recently been raised by Mayoral Hopeful John Minto.

How about another hour at home with your family – every workday?

Heaven knows Aucklanders deserve a break from gridlock traffic.

I’ve lived in this city for 36 years and for the last 20 the quality of life has slowly ebbed away through traffic conditions no citizen should have to put up with. Despite the building of more motorways, express roads, adding lanes to existing roads, putting feeder lights on the motorways and all manner of expensive add-ons, the problem gets worse. With future growth we are looking at existing traffic congestion turning into hell on earth.

And there’s no end in sight. Prime Minister John Key says the Government will put $10 billion into funding for Auckland transport initiatives over the next decade but it’s really just more of the same – roads, roads and more roads with a smaller chunk for public transport in seven years’ time.

It also means we will be lumbered with wasteful spending on new roading projects which will NOT reduce traffic gridlock. Every Aucklander knows that when a new road is built it just gets you to the traffic jam faster.

The cost of just accepting it is too high. A report to the Government in March this year pointed to $1.25 billion in lost productivity every year from traffic congestion. And now Mayor Len Brown is telling us that we must find an extra $12 billion over the next 30 years to mainly fund more roading projects. His “consensus building group” is proposing petrol and diesel tax increases, congestion charges, network charges, rates increases and increased fares on buses and trains and we’ll almost certainly be lumbered with toll charges for both the second harbour crossing and the existing harbour bridge. And remember that none of this will end traffic gridlock. It doesn’t get much more stupid than that.

Isn’t it time we broke out of the dull mediocrity of policies designed for the middle of last century and looked at ending traffic gridlock in less than a year with free and frequent public transport?

Can we get an extra hour at home with our families every workday? Yes, we can, and at less than half the cost of John Key’s roads which would go on the backburner until the impact of this policy means we could plan with more certainty.

Imagine comfortable, modern, low-emission trains and buses, fitted with free wi-fi, providing free and frequent travel to all parts of the Auckland urban area.

That would get Auckland moving like never before. People will abandon their cars and enjoy faster travel to and from work. No cash, no cards – just jump on and go as far as you need to – checking your emails and the news on the internet as you go.

Everyone would benefit with the choice of either free public transport or travelling in their car on a gridlock-free roading network. Two great choices!

Sound too good to be true? It shouldn’t because it could be up and running within 12 months.

Based on present public transport usage the cost would be approximately $280 million annually (70 million public transport trips in 2012) although this would rise as Aucklanders flock to buses and trains. It would need an initial investment to increase the number of buses – approximately $400 million over three years to double bus numbers. Additional trains would come later as the inner-city link is completed and the rail system can more than double its capacity.

It would be funded from money already allocated for road building which would not be needed in the medium term – in other words no rates increases, no extra petrol or diesel taxes, no congestion charges, no fare increases, no toll roads and every Aucklander gets another hour at home with their family every workday.

It should also be seen as an economic stimulus package. Not only would it release the $1.25 billion in lost productivity each year but the extra money saved by those using public transport would be spent to give a substantial economic boost to the real Auckland economy.

The environment benefits as well. At present 56 per cent of Auckland’s greenhouse gas emissions come from cars and trucks. Public transport is far cleaner and greener and would significantly reduce Auckland’s carbon footprint. In fact this policy is probably the most important green policy New Zealand could undertake to reduce environmental harm.

I hope Aucklanders will give this proposal close scrutiny – question it carefully and support it enthusiastically when they see it stacks up. The alternative is too horrible to think about.

NEX Double Decker 7
Would our PT system be able to cope, even with double deckers everywhere?

Now there are some potential advantages to having free public transport, some are operational benefits while others less direct benefits. Let’s look at the operational benefits first

No cash handling

Handling cash can be a big issue for both bus companies and drivers. Companies obviously have to have processes and staff to reconcile all of the money and ensure that there is the right amount in the drivers cash boxes for the next day. Too little in them and staff might not have enough cash to be able to pay change – and we have seen some recent articles complaining about this. To much cash and the drivers can become a target for thieves looking to score some quick cash.

Being cash free removes these issues and means the drivers can hopefully focus on driving while the bus companies can hopefully focus on running their buses as efficiently as possible.

Faster Boarding

Many readers would have the experience of lining up to get on a bus but having to wait while someone in the queue ahead of you to fumbles around for loose change to pay their fare. This can not only be frustrating but on busy bus routes it can lead to delays as the bus gets slowed down. Not having to pay fares means that passengers can load on to a bus extremely quickly. This speeds buses up meaning that they can be more efficient and potentially allowing the same bus to complete more trips per day.

Some of the less direct benefits generally come from the fact that there is less cars on the road and can include:

  • Drastic decrease in emission of exhaust gases
  • Less noise
  • Less traffic jams
  • Better traffic safety
  • Enormous savings in energy and raw materials
  • Creation of new jobs
  • Efficient economical development
  • Considerably lower public and personal expenses
  • Empowering of social justice
  • Higher cultural dialogue
  • Creation of friendlier urban environment

However the key thing is that these benefits can be obtained simply by getting more people to use PT regardless as to whether it is free or not and as such should really be put to the side in the argument.

But of course there are also disadvantages to having free PT.

Overcrowding

Basic economics tells us that the cheaper the price of something, the more that people will use it. Removing fares from PT is likely to lead to much heavier use and while that can be a good thing, it can also have negative consequences. The primary one is that many buses/routes would simply be to crowded for many people to get on. Even putting more buses on is not likely to solve this issue leaving us with the issue of simply having shifted the congestion from our existing roads to the PT network. I suspect people are going to be much less keen to put up with consistently crowded PT services than they do with congested roads. Further because there is unlikely to be any form of ticketing system agencies like Auckland Transport will find it difficult to actually know where the capacity problems are making them difficult to address.

Costs

Leading on from the overcrowding issue, people would quickly start demanding much greater services to ease the pressure. Now that in itself isn’t a bad thing but it doesn’t come cheap. John does mention that more money would be needed to help address this but the amount suggested is simply not enough. We are likely to be talking about needing to triple – or more – our peak bus fleet and that alone would eat up the funds he suggests and that is before even talking about actually running them. To keep the number of buses moving we would also need a vastly more substantial bus priority network, just to keep the buses flowing and again that wouldn’t be cheap.

Bus Congestion

Like we found with the City Centre Future Access Study, another major issue would be bus congestion. Already this is forecast to at very high levels in and around the city centre and adding huge amounts of new buses isn’t going to help things. In fact it is much more likely to push forward the need for ever more expensive projects to increase PT capacity, much like we are seeing with roading proposals right now. While the PT advocate in me sees some positives in this, it also becomes very hypocritical.

I guess overall I think that there are some merits but that those are outweighed by the costs. There are cities that have rolled out similar schemes however as far as I’m aware almost all are much smaller in size and complexity than Auckland is. Most already have fairly well established PT systems that are much more easily able to manage the loads. Our network would need substantial investment to get to that kind of level and in the interim I suspect we would be looking at some very grumpy passengers.

Much of the benefits, including patronage increases, can come from simply getting more people to use PT and use it with HOP – which addresses most of the cash handling and faster boarding issues. That doesn’t mean that we shouldn’t address fares though and use them to target additional patronage. Addressing wider social issues – like how accessible the network is to poorer people – then that is something that could be dealt with through special fares or concessions. Similarly off peak patronage could be improved price differentials and/or group passes.

I guess I simply don’t think that now is the right time to even consider such a proposal, we need to wait until at least our PT system has matured a little and we have fixed the current problems that exist with it. But I’m keen to hear your thoughts. I’m sure there are both benefits and issues that I have missed. I’m sure you economists out there will definitely have something to say.

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5 comments

  1. Free fares in one fell swoop would be a big step. But incrementally to start reducing fares and perhaps eliminating them for some classes of passengers at some times of day is to my mind a no-brainer. What about filling up some of those empty evening buses by offering free fares, for example? That might make a significant change in our use of PT for social activities, which in my estimation is very low at present.

    Free fares for kids, students etc are also steps along the way to an eventual all-free network. But I doubt it will happen all at once. I’d love to see a proper analysis of the likely impact on PT use AND car use, costs and benefits to society etc – has this ever been done for Auckland?

  2. Free fares aren’t free. They are a subsidy that has to be paid for from increased taxes or cutting services elsewhere. Is this the best use of limited money?

    This is a distortion in the market that induces perverse behaviour and is the opposite of what we need to make best use of our limited resources.
    If it is free, it is a signal that it has no value, so no one will value it. People that don’t value it will abuse it and people that value it may not be able to even use it and end up taking their money elsewhere.

    It is far better for us to reveal all the hidden subsidies going to private cars so people understand the true price of private vehicles. Removing those subsidies will make other modes more attractive and drive people to alternative modes.

    Now, if you had free off-peak/weekend travel, that is an entirely different thing. You are putting a price on peak travel and incentivising travelling outside that time in order to maximise use of resource. Using time-based pricing is a powerful tool to influence behaviour.

    1. +1

      We need to remove the subisidies to private travel & make land use response elastic

      1) add congestion tolls
      2) remove ratepayer subsidy
      3) add air pollution excise tax
      4) add excise tax to fully cover costs of crashes (not sure ACC premium covers all costs)
      5) free the RMA from density restrictions

  3. Perhaps an intermediate solution is abandoning HOP cards and go to monthly (daily and annual) passes and having roving inspectors checking them and big fines for non-compliance. What it means is just as fast loading and unloading as if the busses were free but also no hesitation in making that extra trip on public transport say at the weekend rather than using a car – you’ve already paid for you monthly or annual pass so there is no additional cost for that extra trip as there is with your HOP card.

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