The Impact of Half Priced Fares

In March, in a bid to address the increasing cost of living, the government announced it was giving a 50% discount on public transport as well as a 25c per litre drop in fuel taxes for three months. It was later extended by two more months and then in July extended till 31-January.

Earlier this week Waka Kotahi published the results of a research survey into the impact of half price fares and it highlights that just changing fares is not the answer to getting dramatically more people to use public transport.

A survey run over three months up to August found that half price fares generated an additional 7% journeys on public transport, 1% were completely new, 3% came from car/taxi and 3% came from walking or cycling.

The main benefit identified by users was reduced concerns about the cost of transport and relief from the high cost of fuel for private vehicle travel.

There is evidence that half price fares helped mitigate their worries about travel costs and that those accessing PT networks are currently less likely to miss journeys due to expense. However, expense is not the only factor impacting mode choice.

Those switching from active modes weren’t as influenced by cost and there is evidence that, before half price fares and increases in fuel prices, private vehicles were being chosen in cases where they were more expensive in practice.

These results provide better evidence on the impact of fare changes as a public transport intervention and will be included in transport planning guidance to local government.

Firstly it’s worth noting that this research is based on a survey not just Auckland but across all of New Zealand and weighted to reflect the population size of each region. However, with Auckland typically accounting for 50-60% of all PT trips in the country, so is underrepresented in the totals. Wellington also has an outsized impact on total PT numbers in New Zealand and the regional breakdown shows the number of new trips as a result of the half priced fares in both Auckland and Wellington were about 10% compared to 7% as a whole for New Zealand.

See also the comment below about how Auckland had a higher number of people making new trips because of the fares, rather than just switching an existing trip.

In noting that, I think what this survey really highlights is that price has a fairly low elasticity on overall ridership. That’s not a new revelation but is a timely reminder given there’s been a lot of debate over the last year or so about the idea of free public transport. If we want more people to use public transport, we have to make the service better, not just rely on cheaper fares.

The report notes this too, saying that most people still choose to drive even though the actual cost of driving was higher because they believe that the PT options are unrealistic for their trip or just take too long.

For those still not trialling PT services, price hasn’t been the main barrier since 2019. Non-users think of PT services as unrealistic alternatives for travel, since they are not available in their area, aren’t realistic for the distance that they need to travel or are going to take too long to travel the distance.

With these barriers unresolved, half price fares won’t be sufficient to make them trial services, limiting the impact HPFs can have.

And

Price is not the main barrier. Often unrealistic to use PT in their area, for distance needed to travel, time taken or PT not available when needed to travel. Half price fares are not sufficient incentive to trial. Overall monitoring has not picked up any change in perceived feasibility of PT as an alternative mode for non-users.

This is further confirmed in this graph showing that most of the new trips that are happening in the areas where public transport options are typically the strongest.

And in one further breakdown, it’s mostly younger people between 15 and 34 that are making about 12% more trips.

A few other interesting outcomes from the slicing and dicing of the data of who are making more trips

• People with disabilities – about 14% more trips with some sub-groups within that category making as many as 20% more trips via PT.
• Those with household incomes of more than $100k made the most additional trips via PT, making about 8% more PT trips as a result of the fares. Meanwhile, some lower income households saw only a 3% increase in the number of PT trips taken.
• Those with European ethnicity took the fewest new trips at 5% while those with an Asian background took the most at 11%, though it is noted that the latter group tend to live in larger urban areas where PT use is more common.

What is perhaps more interesting is the types of journeys people are taking because of half price fares. Essentially, people used PT more for discretionary trips, like to go shopping or for appointments rather than to it encouraging more commuter trips. That’s something had expected was happening as we’ve seen weekend trips recover to a higher level compared to pre-pandemic numbers than weekday trips.

The one aspect that I think doesn’t get enough attention in this research is the impact of cancellations that has emerged this year due to staffing shortages. There are a few graphs and comments about but for Auckland at least the author seems to suggest it’s not too much of an issue as people can easily wait for the next service. What’s lacking in this view is that most of the cancellations, which in some weeks was as high as 14% of all services, were disproportionately in the peaks and on some routes included multiple back-to-back services.

This likely severely restricted the number of people willing to use PT. Had there not been those issues – which are still continuing – it’s likely for Auckland at least that the number of people giving PT a go would be much higher.

Share this