This is a Guest Post by reader and commenter Louis Mayo:
Hello everyone. This is the first of my promised guest posts and I thought I’d cover this issue outside of Auckland, as the other writers do a fantastic job of this already. Greater Wellington Regional Council / Metlink appear to (finally) be looking at integrated ticketing and integrated fares. As a regular user of Wellington public transport and someone who is very interested in fare structures and have guest posted about Auckland before (here and here), I thought I’d throw my two cents worth. I’d like to thank Stuart Donovan for reading over my draft copy and I have edited the post, taking into account the feedback he has given me.
Wellington’s fare system is structured slightly better than what is currently (hopefully not for much longer) used in Auckland. The system is based on “zones”, which radiate from the CBD, rather than “stages”. The difference is that zones are clearly defined and cover the entire network, “stages” on the other hand, can be different for each individual route (or group of routes). Another feature about Wellington’s system is that all fares are in fifty cent multiples which makes cash handling easier, speeding up dwell times on buses.
As with Auckland, there are cash fares, which are only available as single trip, no transfer tickets as well as frequent rider fares which are, in some cases (i.e Snapper on NZ Bus operated services, and I believe Mana and Newlands coachlines have a smart card as well) a stored value card (e.g HOP or Ritchies Fastpass in Auckland) or in other cases, a ten trip, “clip the ticket” system (e.g the rail network). There are also several (expensive!) daily and monthly pass options. All in all this amounts to a confusing system, almost as bad as Auckland, although one advantage is that the discount for ten trip and stored value is fixed at 20%, which is better than most discounts offered in Auckland (Ritchies only offer a 5% discount in Auckland!) and is at least standard across all operators (the discount, not the card).
The system that is currently used is archaic and needs to be changed. There are a huge number of very small zones. There are total of fourteen zones over the entire Greater Wellington (admittedly including Wairarapa). This would have to be comparably more than almost any other city in the world that I am aware of. The small zones consequently amount to very high fares, as only a small handful of people will travel only one zone. Zone 1, for example, barely gets you out of the CBD. You can view the current zone map below:
Penalties for transferring:
The single worst element of both Auckland and Wellington’s fare structure is that transferring between services is penalised. The use of “single trip” tickets is a major disincentive to transfer between different modes and services. Wellington are also redesigning the bus network to a system with better frequencies,the trade-off being that additional transfers will be required, therefore a time based fare structure rather than a single trip based fare structure is crucial. As far as I’m concerned if it penalises transfers, then it’s a bad system, regardless of other features. Obviously changing to a time based fare system will require full gross contracting of all services.
The subject of penalties for transferring between services seems to be an “elephant in the room” (similar situation as Auckland) and disappointingly, was not addressed in the survey. Hopefully that means that GWRC are already planning on changing this and did not require it to be in the survey. It’s all very well to be talking about distance based fares but shifting to time based ticketing would provide far more benefit. This seems to be a case of putting technology ahead of the best interests of the customer.
My recommendation is that we move to a time based system. For example, single tickets are replaced with “2 hour passes”, so instead of taking a single trip, you get two hours of unlimited transfers within the specified zone/s.
Price of fares:
Wellington have a relatively high farebox recovery rate, around 55%, the highest in the country. But personally I think fares are far too high in Wellington and they are affecting patronage numbers, growth has been a little unspectacular over the past few years (albeit starting from a higher base than Auckland). Public transport has to be reasonably cheap if you want people to use it on mass. Yet GWRC seem intent on regularly raising fares, with a disadvantage of the 50 cent rounding being that the minimum fares can be raised by is 50 cents. For example increasing the one zone fare from $1.50 to $2 meant a 33.33% increase, which is significant.
By increasing fares you are reducing potential patronage. Stuart informs me that the price elasticity of demand for public transport fares in Wellington has been calculated at around -0.5, so theoretically total revenue should increase after an increase in fares but I don’t really think that maximising revenue should be an aim for public transport. Remember that for every less car there is on the road, the less that should need to spent on roading projects.
A 50% farebox recovery rate seems relatively fair but I think NZTA’s approach to this matter is flawed. They seemed determined on enforcing an arbitrary figure but need to be supporting initiatives to improve long term farebox recovery such as ticketing technology (reduces fare evasion and encourages new users), bus priority measures (bus lanes, traffic signal priority). Calling for better farebox recovery and then reducing funds available for public transport capital improvements is hypocritical and GWRC should not accept this.
Zone based vs Distance based
There are obviously advantages and disadvantages of the zone based system that is used by Wellington. I see that Wellington is looking at the idea of distance based fares. The idea is that you would pay for the kilometres you travelled directly, rather than by the number of zones you travelled through. There would be a rate of x per km, with the possibility of having a uniform base charge (e.g $1 + 40 cents per km for instance).
Arguments for distance based fares (counter arguments in italics):
User pays / fairness: For example if you travel 2km then you only pay for that much. Under a zone based system you could pay for 8km of travel and not use it. As people are using the system pay for what they use only , users are not cross subsidising another person’s travel on a distance based system. Cross subsidisation is not necessarily a bad thing in all cases. See below.
Removes arbitrary zone boundaries. In a zone based system you have a case where making a short trip could cost you a 2 zone fare simply because it happens to go across the boundary. The larger the zones are, the larger the fare will increase by. This can be solved to an extent by having zones “overlap”, and by having clear geographical cut off points, see below.
Behavioural inefficiencies caused by zone based systems. For example under a zone system we could see people doing a “park & ride” and driving to the zone boundary and then catching public transport from there. This can be solved by charging fees for the usage of park & rides.
Arguments for a zone based system:
Convenience and easy to understand: It is much easier to calculate fares quickly by simply counting through zones rather than measuring distance. Smart cards can easily calculate fares automatically.
Can make fares for travelling longer distances very expensive, remember that one car doing a 20km trip creates more congestion than one car doing a 5km trip, yet the former will have to pay four times as much if they use public transport. This can partially be solved by having a base charge and then a lower per km rate.
Introducing a time based “pass” system that allows users to make unlimited transfer within the given time window is much easier on a zone based system. This could be solved by having a mixture of both systems, see below.
There is a question of how distance fares are calculated, would it be ‘as the crow flies (the shortest measurement between the two points)’? Or is it the length of the route taken. which would mean people have to pay extra for indirect routes, which would be unfair. The former would mean that factors such as hills (very common in Wellington!), which increase the cost of providing the service would not be taken into account. The Johnsonville Line and the Cable Car are prime examples of where this difference raises an interesting issue.
There is the option of using different fare structures, the “best of both worlds” one could argue, and to be honest the only way distance based fares would work well. How this would work is you have a distance based system for a stored value smart card (load up money), the system deducts the fare automatically from the stored value by recording the difference between the “tag on” and “tag off” point. A flat “time based” fare (e.g 1 hour unlimited travel) for cash / paper tickets would then be used. Monthly passes could then be offered using a zone system. This would probably work okay and is what is used in Amsterdam and Singapore.
Trying to do a distance based system for cash fares on paper tickets or for monthly passes wouldn’t be feasible. An example of a PT network that tries to, is CityRail in Sydney, who charge fares in blocks of distance, rather than in zones. In reality this creates a highly confusing system, because tickets are only point to point, i.e you buy a ticket for travel between “Central and Chatswood” rather than simply “three zones”. This is the reason why integrated ticketing has been such a nightmare in Sydney (T-Card).
On balance I definitely think zones are the way to go (Stuart raised some valid points but not quite enough to convince me:) . Having one fare system for all (with a discount for smart card users) should bring big savings in IT and administration costs. The main point I’m trying to make is that the zone system is not the problem with the fare structure. The problem is that transfers are penalised.
Size & Number of Zones:
The fewer zones, the easier it is to use the network. If it is easy to know how much you need to pay to make a trip, then you’re more likely to use public transport outside of your normal “daily commuter trip”. If a “time based” system is used then you can also get better value for money as you have a larger area to use.
With larger zones this will mean lower priced fares for longer distance travellers. By reducing the number of zones to five, each zone would approximately be the same size as three zones currently. it is likely that you’d set the fare at about the price of a current 2 zone fare ($3.50 for an adult) for one zone of travel which would mean that people going three zones pay less and people going one zone pay more. Therefore, people going shorter distances are effectively cross subsidising longer distance travel. This could have the effect of encouraging undesirable urban sprawl which should be avoided. But at the same time longer distance public transport travel does reduce congestion more than shorter distance travel does. The other point is that shorter distance travellers are going to have more of an option to walk or cycle – the most sustainable mode of transport you can get!
When I stay in Wellington, I’m lucky enough to be on the boundary of zone 1 and zone 2 which means I can get to / from the airport on the #11 bus on a two zone fare. When I go to the CBD I only need to pay for one zone, which is great for me but I’d be part of a minority. I guess that many using one zone fares will be people transferring between modes, for example I often catch the bus into the CBD on a one zone fare, then catch a train, if there was a time based system then I could go all the way on one ticket.
A lot of people who currently travel one zone only will be encouraged to make further use of the public transport network. For example after coming home from work, they will have an incentive to use PT to go to the shops because it won’t cost them anymore under time based ticketing.
It is very important that zones have a large overlap, which Wellington currently does not have. This would mean that there would be a number of stops / stations that were in two zones. It’d be in whatever zone that benefits that particular passenger. For example if the zone boundary was at Pukerua Bay, then the zones would overlap as far as Plimmerton and Muri. If you were coming from the north you’d say the boundary was at Muri, if you were coming from the south you’d say the boundary was at Plimmerton.
Concession fares
I agree fully with the idea of concession discounts being expanded to all people under 20. Providing beneficiaries and people on low incomes with concession fares would also be a good idea, remember that high transport costs hit low income citizens the hardest. I do appreciate the additional costs involved, but feel that this is worth the gains. Another thing I would like to add, is to lower costs for families and groups travelling together as the fares start to stack up in favour of driving the car once you have two or more people travelling together. I would like to increased discounts for families when travelling off peak.
Off peak fares:
Off peak discounts should be available on all modes, not just train fares. A discount of 20-35% seems about right. Off peak discounts encourage a more efficient use of resources as it is likely that increasing off peak capacity will incur less marginal costs than increasing peak capacity as there are fixed costs of buses and trains that are parked up at the depot doing split shifts, whereas improving peak capacity will require purchasing of additional vehicles.
Stuart also suggested allowing off peak fares for people travelling in the counter direction during peak hours. This would be a good idea (the vehicles have to run back out again no matter what so might as well fill them up) but could have a few issues issues defining counter peak. For example what is counter peak for services that don’t run into Wellington CBD? I’m sure this could be worked around though.
Smart card vs cash fares:
The current system of a 20% discount to incentivise smart card travel should remain. Cash fares are important to remain in the system to encourage casual usage of public transport but regular travellers should be encouraged to use smart cards to reduce dwell times for buses and reflect the additional costs of printing paper tickets, etc. As well as that I would make weekly and monthly passes only available on the smart card.
Smart card technology:
One advantage of Wellington starting this project later than Auckland is that they can hopefully learn from Auckland’s mistakes and hopefully minimise failure. It does appear that the Snapper system that is established on NZ BUS operated services has a number of deficiencies, in particular the slowness of the tagging on and tagging off and the inability to conduct online and automatic top ups as well as the issue of giving NZ BUS unfair access to statistics about other operator’s services.
Fare evasion:
My observation is that fare evasion is increasingly problematic on the rail network in particular. The system of conductors walking through trains and clipping tickets is very dated and must go. Ticket gates could easily be installed at Wellington station and consideration should be given to gating other busy stations on the network. Staff should exist only to conduct random inspections and issue fines where required.
I congratulate GWRC on consulting with the public. You can fill out the survey http://www.farereview.co.nz/ and can also choose to attach a document of a longer submission. Submissions close on 14 September and the plan is to finish design of the new system by mid 2013, lets hope they can meet this deadline. I certainly look forward to the debate that will hopefully result from this post!
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Really good summary of the pros and cons of different parts of a ticketing/fare policy. I’m glad that Wellington is going through this process and I hope that Auckland is as up front and open about it.
I think there’s a really interesting debate to be had around zone sizes. Larger zones make things simple and also probably make longer trips (which generate the most decongestion benefits) cheaper, but larger zones is also likely to results in the biggest changes from current fare levels for some trips.
That Wellington zone map is very curious, very radial. They don’t look like zones at all actually, it seems to be just stages. Are there actually any services that run along the zones, say from Plimerton to Upper Hutt? Do these zones actually work as zones (with some travel benefit within a zone), or are the simply stages that are the same across all services?
For a proper zone system (one based around travel within zones, not just radial commuting) you’d have far fewer. I’d say maybe five at most: City (including Newton, Te Aro etc), the rest of Wellington proper, Hutt valley, Porrirua, and Kapiti. Outside those areas were the only service is a commuter train, point to point fares are probably appropriate.
Due to geographical constraints there are obviously few services that run across from Hutt to Porirua but there are indeed some. Coming to think of it these services are actually commercial runs operated by Runcimans coachlines who charge their own (very expensive) fares.
do you know why there is no direct service that run from plimmerton and upper huttt nick? cos there is no demand,its nothing to do with the zonal divisions.
for $2,i can make a single trip on buses and trains within the entire southern part of lower hutt city,so these zones do work as zones.
as for the current fare review,refer t o my posts on the cbt forum.(p.s: where is newton??)
louis: if you think those runcimans services are expensive($6.4 if paid by snapper) then try to make trips by trains or taxis to the same destination. a taxi from porirua to upper hutt can be anything between $70-80. by train its normally $14.5
That was exactly my point James. There are no services on that corridor and no demand for travel between those areas, so why have they been put in the same zone?
because of the zonal divisions, they are geographically radiuses of a circle,thats how they drew the radial pattern.
Like your idea of overlapping zones. I am sure the current zones were planned by the same people who do electoral boundaries. They resulted in extracting quite a lot more fare money!
You have also described well the problem of “transfers”. The fare penalty when changing routes is exorbitant when the overall journey is billed as two separate ones. Snapper trumpeted “they could do it”, but it only happens on some VERY special routes, it is not the norm.
Sadly the fares in Wellington have reached the point where for 2+ people it is the same as the cost to run (and pay parking for) an average car.
You’ve hit the nail on the head Nigel. Given transfers exist so that councils save money by not providing a direct service, why should you have to pay more for an inconvenience? I agree that fares are far too high. It is amazing how many do use buses and trains in Wellington despite the fares but definitely some reductions need to be made and increasing zone sizes will benefit more than it would hinder and would hopefully be revenue neutral after additional patronage is taken into account.
Bigger zones don’t really have any appreciable benefit with a smart card system. SE Qld has 23 zones on its Go Card.
The downsides of bigger zones, and flagfalls are that they deter short distance trips and therefore more sustainable lifestyles. This was discussed at railpage a while ago: http://www.railpage.com.au/f-t11368983.htm
Note that a fixed gross cost system is not required for free transfers. Sydney, Adelaide and Perth all have gross cost + patronage incentive payments with free transfers possible (in the former case only sometimes).
SimonL, sounds like you’re talking about stages, not zones. In a proper zone system you can have unlimited travel without penalty within a zone for a given amount of time. That makes larger zones beneficial to travellers, and it doesn’t deter short trips because they aren’t priced according to distance. For example on most zone systems you can make a return trip, or two return trips, or a series of linked trips on the one fare. That makes it cheaper to make shorter local trips, and especially makes it easy to depend upon PT for all your motorised transport. That assists much more for a sustainable lifestyle in my opinion.
Not so. I’m quite across the concept of zones.
Look at Melbourne’s system which has an incredibly high price to go between two bus stops on myki money – $3.28 or $2.26 in outer areas. Even Sydney’s fares aren’t this high for short trips.
Having less zones DOES deter shorter trips as compared to longer trips as it is pretty much impossible to prevent the effect where the longer trips are significantly cheaper per km.
MyZone in Sydney did result in an increase in longer trips on Cityrail at least as these became somewhat cheaper. Shorter trips did not become cheaper.
But in Melbourne it isn’t $3.28 to go between two bus stops. It is $3.28 to make an unlimited number and length of trips within the zone for up to 2 hours 59 minutes (a zone that covers more area that all of Auckland that is). You’re still thinking in terms of distance, when it isn’t a distance based pricing structure.
So yes, if you only make the one single unlinked trip and nothing else in the next few hours, then it can be expensive. But how many people travel like that? Most folks will either make two trips for a regular commute, or a series of shorter trips for shopping, errands or whatever. In the first case, you would end up with a daypass for $6.56 (two two-hours in one day automatically upgrades to a full daypass). So that’s $6.56 for totally unlimited travel for a whole day, effectively you’re transit use in the zone becomes unlimited. In the second, you would be able to undertake all your trips over a couple of hours for the one price. Again that is unlimited travel, albeit only for a two hour block.
That allows for transit use comparable to car driving, just hop on and off to your hearts content. That makes for a sustainable lifestyle. If you charge per distance or with stages or very small zones, you are basically charging people the same full amount for ever part of a trip there make. The marginal cost of additional trips made is the same as the initial cost. Under those conditions people will continue to ration their public transport travel, there is no incentive to stick with PT after the first trip. There are some long term macro effects of that, basically in the car saturated Australasian context people will only take PT where the have to (commutes with congestion or to CBDs with priced parking etc), then go back to driving the second it becomes easier because it will cost more to take a bus than to drive. With large zones and time based fares, once people have made the first trip under the pass it will always be cheaper (i.e. free) to make additional trips by PT than to drive, as long as the pass is still valid.
> You’re still thinking in terms of distance
Well to not think in terms of distance, that would be a “flat fare” model, as applies in some places. I wouldn’t like that for the same reasons as I dislike less zones.
> how many people travel like that?
The lions share. Translink in SEQ used to estimate weeklies as being used for 11 trips per week. They later decided that this was unrealistic and 10 per week was closer to the mark. This is in spite of a number of services operating every 15 minutes until after 11pm.
I say no gimmicks, just every day lower fares. That is the system which applies in Hong Kong, which is leading the world on farebox recovery. Otherwise you need to put the base fare up higher which will deter patronage.
As for dft7132’s point about Melbourne’s patronage booming, well they still had the 2 hour zonal system when their train system’s patronage went down to 88 million per year. Clearly patronage is booming for reasons other than their fare structure.
There are several ways to price fares that aren’t based on distance travelled, like time-and-zone for example. Again Melbourne provides a good example, not a flat fare but a fully integrated zone pass. Zone are perhaps the best of all worlds, because you can provide flat fare style simplicity, but also avoid transfer penalties, and you can set zone sizes to take care of large scale distance effects for radial commuters.
Sorry, you are saying the lions share of public transport users in SEQ make one single non-return trip in a day? Where are they going to that they don’t have to return? How do they get back home again?! That sounds unbelievable to me. I would say the lions share would be comprised of return trip ‘workaday’ commuters and to a lesser extent people making a variety of trips for general travel across the course of a day.
The majority of SEQ PT users make one return journey per day, 5 days a week.
Oh and I don’t know what you mean about zones not being a distance based system. They clearly are, with some attendant inefficiencies in the interests of simplicity. I don’t have a problem with that in many places.
You can have a distance based system with integrated fares. I don’t see why zones and free transfers are intrinsically linked. They’re just one way of reaching the destination.
Ok, so that’s what I assumed about SEQ. In that case you price a zonal day pass about the same as a return commuter trip covering the same origin and destination for a radial city commute. That way commuters basically get ‘free’ travel if they chose to use PT beyond their regular commute one day, while people who travel locally (i.e. within one zone) or those that commute circumferentially get a sort of bonus of cheaper travel. That’s quite appropriate IMHO, willingness to pay is higher on radial CBD commutes, plus they are the most expensive to service. Marginal trips on local or circumferential routes are cheaper because you tend to just be filling empty seats on unutilised service rather than adding new vehicles and drivers to the system.
The point with distance was that zone systems aren’t priced according to distance, they are priced by time. There is of course a spatial element where you have multiple zones, but there is a only a very broad relationship between the distance travelled and the price.
Dis-agree, I believe one of the main deterrents of Public Transport is the fact people see they are handing money over each time they travel, where in private vehicle use they pay a lump sum (full the tank) and don’t think about it each time they get in the car. This creates the illusion that PT is that much more expensive and less FLEXIBLE than the private vehicle. However by having a zone system you minimise the effect, therefore encourage more travel.
With a proper Zone system you WILL attract more people to take shorter trips, they see the flexibility, plans change no problem, and they can see the price advantage, for short trips remember they often happen over a short period of time, so the way the customer see’s it, as Nick Mentioned, they see it as getting a free trip.
Melbourne has had a time based zonal system for at least 25 years, it works. Train and Tram patronage is booming. The Myki readers on the trams are better than Snapper as they have a screen tell the user the fare deducted (often none if you’ve hit the limit) and the value remaining. Compare this with snapper and check your balance speech. And if you get on an off buses at will with snapper it will charge like a bull. Its crazy Wellington has 14 zones for 400 000 people, Melbourne has 2 zones for 4 million people.
With HOP, new trains (coming) and a complete overhaul of bus network, Auckland needs to look towards a more user friendly fare structure. Hopefully AT will follow Wellingtons lead here!
Seconded DFT. Your closing comment amused me greatly “Hopefully AT will follow Wellington’s lead here!” Wellington should be following Auckland’s lead! Integrated ticketing for Auckland has been planned for what 8 years now? And are still having issues! Wellington on the other hand has resisted it for years and has finally seen the light but if all goes to plan, Wellington could have integrated fares at around the same time as Auckland.
True Auckland is going down the path of integrated ticketing while Wellington sits on the fence. But i have not seen any proposals by AT to simplify the fare structure.
AT have claimed that this is happening later, but thats about all the information I’ve heard…
Let’s hope that Auckland see the error of their ways. Failing to simplify the structure was where Sydney went wrong with their failed T-Card.
@Joshua again this argument has a lot of merit. There is definitely a psychological element to it that makes people think that car travel is a lot cheaper than it actually is. I still feel that fares are too high but definitely this is part of it as well.
Yes, it has merit, but if farebox recovery is to be fixed, giving away trips for free means the base needs to be raised. I expect more trips are deterred by the higher base fare than are gained by the free trips.
As for the point about the psychological impact, that is significantly reduced by a smartcard system as you are only putting money on the card occasionally. Much like putting petrol into one’s car.
Good work Louis – just a few comments:
1. Sometimes hard to charge for informal park and ride, especially when on residential streets that are normally not very busy
2. What was your point re: cross-subsidies not always being bad? I did not see what you were referring to when you said “see below”
3. While you can create overlapping zones they’re often not very “legible” – and even then you still end up with a zone boundary that disadvantages someone.
4. Many heavy rail systems use point-to-point (i.e. distance based) fares.
1. That is true. An Auckland example would be Meadowbank station. Not sure how that can be overcome.
2. Maybe I didn’t make that very clear – I meant the note in the section “size & number of zones”.
3. Hmmm, that is again true but I think you could probably work around this by clear maps and indicators. Easier to do at train stations but harder at buses. I do like how in Wellington each stop is labelled, “this stop is zone 2” (or whatever zone it is). You could easily say “this stop is in zone 1 or zone 2”.
4. I understand that but are these systems part of an integrated fares system. Point to points fares work well for an unintegrated network but zones are better for integrated fares.
I don’t think zone legibility is much of an issue in Auckland because we are blessed with some very natural zones. An obvious arrangement would be one zone on the North Shore, one on the isthmus, one in West Auckland, one in South Auckland etc. There it is perfectly obvious that if you’re travelling on the Shore it is one zone, if you leave the Shore it’s two, etc.
It would just be a case of having certain places in both zones, for example New Lynn and the Rosebank industrial area would be in both the west and isthmus zone. That takes care of the zone boundary between west and ithsmus entirely in quite a elegant fashion. Likewise between ithsmus and south, it would be a case of Otahuhu, Onehunga, Penrose and Sylvia Park being in both zones. That works with the geography, and works for the network (having transfer points in two adjacent zones). Between the North Shore and the isthmus and west Auckland the boundary would be the harbour, where you naturally have a 3km or so gap between adjacent stops/stations. No real border effects there that don’t already exist.
The only tricky bit would be if there was a separate Inner City zone, that would have a boundary on the street. But even then we can use natural borders, for example a line through the harbour, Hobsons Bay, Mt Eden domain and Western Springs covers about half the perimeter of the central city via existing gaps without stops. On the other sections it’s just a case of having a km or two barrier where stops are in two zones.
I think people may overcook the legibility and border effect issue of zones a bit. It would certainly be much more legible than the myriad of stages we have currently, which are themselves subject to border effects (which may be quite pronounced due to the often arbitrary location of fixed stage boundaries). It would also arguably be much more legible than a purely distance based fare system. Knowing where the zone boundary lies is indeed an issue because you could end up getting stung an extra fare level by going just one stop along. But knowing how many kilometres you service(s) will cover to get between the origin and destination is possibly much harder, which also runs the risk of getting stung with a fare much higher than you might anticipate.
Should be easy in Wellington as well, I’m happy to write a “part 2” post suggesting a final proposal.
Be good to see Louis- thanks for all this work.
In addition to my comments above, in Sydney they effectively reduced the number of zones when they went to the “MyZone” system, resulting in nearly a 50% reduction in the use of the MyMulti 1 as compared to its predecessors. Source: IPART
Some ideas from where I am now (Edinburgh):
* The bulk of the market is locked in via what is effectively a permanent monthly pass, called a Ridacard; £51 ($NZ100) for four weeks’ travel in an area the size, more or less, of the Auckland isthmus. You can also topup the card for a week, at a corner store in many cases.
* There is very little operator-to-operator competition in the city; a separate company serves most of the hinterland outside the city on this side of the Forth, another operator across in Fife, and still another providing a 15m service to Glasgow, fifty miles away.
* Most of the benefit we might get from a two-hour transfer ticket, is supplied by selling day tickets for £3.50 ($7). The logic is that if you need to take two buses to get somewhere, you will need to take two buses to get back to where you started, and you probably won’t manage that in two hours. Ergo, sell people a daypass; since the cash fare for a single journey is £1.40, it pays for itself in three trips.
I am not sure how much of this might apply in a Wellington context, but here goes:
* My suggestion for the Wellington area would be to use zonal fares; on the basis that you don’t really need a two-hour transfer fare if you can price your day ticket correctly. So, I would suggest a cash fare of $3 and a city fare of $1 – the aim being to encourage the uptake of day tickets or even weekly or four-weekly passes.
* In the interim, prior to integrated ticketing, be prepared to put money on the table to encourage the buy-in of the bus operators to multi-operator bus fares. If they don’t offer these fares now, they have good commercial reason for not doing so. And a gross costing regime won’t reduce the need for money; London, which has the best British bus system by far, costs £75 ($150) per resident per year in support, half as much again as Edinburgh.
* Price your cash fares for convenience – I’d find it less hassle to pay $1.50 (two coins) than $1.40 (three coins). On some services, a $2 fare could work better than a $1.70 one.
I disagree Ross, two-hour transfer tickets are very handy for making shorter errand type trips. They are helpful even if you are making a return trip on one service without a transfer, or if indeed you need to make a connection. Shortly Wellignton and Auckland will have an entirely revised network designed around a grid of high frequency networks and connections. Under this model you could easily have a short trip that requires a transfer or two, for example a bus to train/busway connection, or one bus to a Link, or a connection between two trunk buses to get to the mall.
Another niche mode is when you make a trip one way one day, and back the next, like working a night shift or staying over at your girlfriends house.
Of course all these issues are overcome if you price day passes low enough, but I think it will always be better to offer a two-hour pass at half the price of the daypass.
To my way of thinking, the ability to make a return journey on the two hour ticket represents farebox leakage. The base fare needs to be increased, ever so slightly, to compensate. It’s not a positive feature.
SEQ in 2011 had about the best structure with 10 full price trips and 50% discount after that, combined with an off peak discount. The only limitation was that the full price trips weren’t necessarily the most expensive trips.
Well then you don’t seem to see the point of a zone and pass system at all. Who cares if people make a return journey, or a single trip twice as long, or a succession of five little short trips about town? It’s inconsequential.
I would say the ability to buy unrestricted access to public transport within a zone for two hours is a huge benefit for the users, whether that lets you make a short return journey or one long linked one. Encouraging people to use public transport as much as possible is my goal, so I’d like to see a fare structure that is very simple and has very low marginal costs after the first trip.
I assume your view is that people making a short return trip should pay the full fare twice regardless of how long it takes them. My view is people probably just won’t make that trip if they were charged that way.I’d rather a system that has adequate farebox recovery and double the users, than one that has slightly better recovery and half as many people using it.
That’s effectively an argument for periodical options. The discussion paper (or whatever you call it) didn’t favour them, and I agree.
Far better to bring down the base fare than give away trips for free IMO.
Short trips may well be too expensive, but that’s not an argument for periodicals. It’s more an argument for MORE zones and a lower flagfall.
Why not give away free marginal trips, if someone has already paid in full for their first trip and their marginal cost of an extra trip is effectively nothing?
If you bring down the base but charge every trip the same, then it might be a bit cheaper overall but you’ll still have marginal trips costing the same as initial ones. That will encourage people to travel as little as possible, not as much as they’d like to.
More zones exponentially increases the complexity and illegibility of the system, and if you have a valid pass already then your flagfall on each extra trip is zero. I’m thinking about a transit system that works for all sorts of daily travel here, not just 9-5 weekday commuters. If all we had to do was service commuters then point to point fares would work (but we don’t, and they don’t). More zones and a lower flagfall would mean less people making general trips, and an expensive system based around servicing peak commuters.
> More zones exponentially increases the complexity and illegibility of the system
I disagree. More zones isn’t hard at all, and if you have a smart card system, the system works it out for you. Where is the added complexity?
> if you have a valid pass already then your flagfall on each extra trip is zero
Not sure what your point is? If you have a current periodical for the zones in question then the trip is free?
> More zones and a lower flagfall would mean less people making general trips
No, it would mean more people making shorter trips. A positive outcome. Not sure what you mean by “general trips”.
> an expensive system based around servicing peak commuters
Umm, you are saying, effectively, to put up the base price to pay for giving away free trips and then arguing this?? You aren’t making sense.
I think we should just agree to disagree.
Actually, I will add one more thing. The discussion paper makes it perfectly clear that the structure is NOT an end run around the fare box recovery policy. That is to be set independantly.
Sorry by general trips I mean trips other than peak hour radial commutes.
A smart card system is perfectly for charging you the right amount for the travel you have already made, but it doesn’t help you work out how much a trip you intent to take will cost. That’s where the complexity and legibility issues of many small zones or stages comes into it. If you want to make a trip you have to go off and work out what zone the origin is in, what zone the destination is in, how many it passes through, and then calculate the cost. If you have just a few large zones based on logical geographic barriers then it becomes much simpler, most of the time your trip will cost you just the regular one zone fare.
What I’m arguing for is a public transport system and a supporting fare structure based around serving all-day travel needs, as opposed to just city commuters. A system that just services peak commuters is expensive to operate because of the one way loadings, long trip distances, short but intense operating hours, high peak fleet requirements, drivers on split shifts etc. They cost more per passenger to operate than systems that operate to all destinations all day long and have more flat and even demand curve and far less peaky occupancy.
In short, I’m saying it is better to have more people travelling more regularly and more often than to have a very close correspondence between the number or length of trip and the fare charged , because you have more paying customers on your system overall. It would result in higher fare take while the increase in cost would be less.
Fare systems that focus on distance, many small zones, or stages favour those that travel on the same return route each day, not people who use public transport for all their needs and need to make varied novel trips from all sorts of origins to all sorts of destination.
So no it’s not a case of putting up the base fare to pay for trips, it’s a case of a fare structure that charges people for a block of their travel in a way that won’t dissuade them from making further trips. I.e. the goal of a fare structure should be to maximise patronage while achieving adequate gross fare recovery, not to try and maximise recovery and stifle patronage in the process.
“Not sure what your point is? If you have a current periodical for the zones in question then the trip is free?”
Not free, just without additional cost. We’re still charging people for using PT, just in a way that makes them use it as much as they like, rather that avoid it unless it’s absolutely necessary. If you price ever leg of every trip the same way, then people will only take those trips the have to (say a peak hour trip to a congested CBD with expensive parking), and will jump back in the car the second it is easy to do so. I’m saying we should charge people with a integrated pass according to large zones, so that they buy in for their difficult trips but still have access for all the other trips while their pass is valid. If you make the zones too small then that effect is lost, you are back to people making an expensive to service commute but no other travel.
Surely the off peak discount is way to achieve the effect where trips outside of peak are more attractive. Indeed, this seems to be largely a solution without a problem in Wellington as there is already a high off peak usage, around 50%. And that is without either an off peak discount or the periodical options you crave. I’m all for increasing the usage off peak even higher, let it be said. I don’t know where you drew the conclusion that such a fare structure, with its attendant higher fare levels would increase off peak usage. I’d be interested in a reference if you have one. Your fare structure would only be attractive to those who have already paid for their periodical tickets, which is the minority; mostly peak hour, peak direction commuters. What I am thinking about is a fair fare structure for all.
Well I don’t want to discount off peak travel, I want to discount additional trips by PT once someone is already using it.
Ok I see one issue here that I probably haven’t articulated well, the assumption that my proposal would have higher fare levels, either initially or overall. They would be much the same, because the marginal cost of marginal trips is very low we don’t need to charge much, if anything for them (for the most part we would be just filling empty seats). So the entrance cost is equivalent. In my proposal you have say $2 to make the first trip, then no additional charges for additional trips within two hours. On the alternative you have $2 to make a trip then another $2 for each additional trip. Obviously the first is going to result on more patronage and more discrete users, although I don’t have a reference for that, I’m a making a logical assumption.
So the difference would be more people making more trips overall, sure they are paying a lower average fare but that’s only a function of more trips on the same network, the net fare take would be the same for the same costs. So same expenditure, same revenue, just greater utilisation. So in a nutshell it’s basically about filling spare seats for ‘free’ to give people more value out of their transport network. Overtime that would translate into stronger growth with more users, as more people would find the system convenient and affordable.
With all due respect, that is a very bold assertion that the base fare level would be the same. Currently Wellington is near enough to a 50/50 peak/off peak split for patronage. I am sure quite a number of these people are doing 3+ journeys in a single day, which you would charge them for only two journeys. Metlink have clearly said that the farebox recovery is to be maintained. I do not know what part of this is unclear. If these journeys are not going to be paid for then the base fare will rise. It is very simple!
While I agree that in a scenario where it costs $2 to make a return journey as compared to it costing $4, the former would see more patronage; that is not the scenario under discussion. More likely it is $2 return for a minority and $4 return for the majority vs $3 return for all who are travelling in the off peak. I know which horse I am backing.
I tend to agree with SimonL; if you don’t charge for subsequent trips made within a certain time period then the initial or base fare must rise for revenue to remain constant.
That’s also one of the issues with offering highly discounted monthly passes – because they basically are like an all you can eat transport buffet where the regular trippers are subsidised by the irregular trippers. And the problem with that is it highly regressive: The people who buy monthly passes tend to be commuters (relatively well-off) whereas the irregular trippers tend to be children, students, beneficiaries etc. The other problem is that commuters tend to travel more at peak times and so actually incur higher marginal costs than your irregular trippers.
I’m going out on a limb here but I’d suggest that providing an attractive low cost transport system is best done by setting the bar quite high for monthly passes; but offering relatively competitive stored value rates. This also allows you to offer more targeted discounts, for example for off-peak travel, when you think it’s worthwhile. Once someone’s on a monthly pass you loose all flexibility to influence their travel behaviour in ways that might be more efficient.
I think the analogy with the buffet is a good one Stu. The thing with buffet restaurants is they are very cheap to operate and have good profitiability, and everybody gets to chose what they want to eat, how much they eat, and when they eat it. You can feed a lot more people out of the same restaurant space, kitchen and service staff with a buffet than by filling orders a la carte.
Perhaps the only downside of a buffet is it removes the marginal cost of that extra plate of shrimp cocktail that you don’t really need, leading to overconsumption. However getting back to public transport I don’t think consuming more than your basic requirements is a bad thing, because in the long term it will lead to less demands for cars and parking, and more demand for public transport. We are well below the point where we need to be concerned with rationing public transport use.
Thanks for the support, Stu Donovan.
I would go further, in that it would be better to remove weeklies and longer entirely. QLD, WA and SA (IIRC) have already done so.
Smart Cards remove periodicals reason for existing!
Yeah but you ignore Melbourne who have quite a good fare system (fares not tickets, we won’t discuss Miki). I was trying to suggest a Melbourne style fare system.
That is your opinion that Melbourne’s system is good. I disagree for reasons I’ve already mentioned above. Obviously it is good relative to SYD, AKL and WLG but that is not saying very much. I don’t like London’s Oyster system much either. Hong Kong’s Octopus has far lower base fares and better farebox recovery.
Almost any system, except for Sydney would be better than the status quo. I have issues with Brisbane because of the very high fares which may be alright in Australia but would be far too expensive in New Zealand.
But that is not an issue of the fare “structure” but the fare level. The discussion paper makes this perfectly clear.
I have issues with Brisbane too – 9 journeys then free represents significant farebox leakage and is rortable. 10 then 50% discount as applied in 2011 was far better. Even better would be full price for the most expensive 10 journeys then 50% discount for others. The other issue with Brisbane is the flag fall is far too high – again, not really an issue with the fare structure.
I’ll admit I come to this discussion firmly from a ‘public good’ perspective, i.e. basically asking what will result in the most people using public transport, and especially what will allow more people to do away with their second or even first car completely and use public transport for all their urban motorised travel.
Farebox recovery isn’t a huge concern of mine, I see it as something that needs to be maintained at a sustainable level rather than maximised. My reason for that is the lions share of benefits aren’t monetary and don’t get captured in that equation. I see the biggest benefits of PT are greater mobility, greater accessibility, decongestion, reduced automobile dependency, less land consumed by road infrastructure, improved urban design outcomes etc. These things are most easily captured by patronage (to be very simplistic the more people use PT the greater those benefits are) and I believe that a cost to the public purse in the way of mediocre farebox recovery is more than worth it to maximise the real benefits.
You could slash the Wellington network down to half a dozen peak commuter runs and achieve greater than 100% farebox recovery across the system, but in doing so you would eliminate almost all the important benefits of the public transport network. You’d beat Hong Kong in terms of low base fares and farebox recovery, but it would be a pyrrhic victory, losing a war to win a battle.
Likewise with fare leakage, I’m not sure how much of that exists outside of 9-5 commutes. You might look at all these ‘free’ extra trips people make on the back of a zone pass and decide that’s $XYZ of ‘lost’ fares, but I’d be more inclined to thik those extra trips simply wouldn’t be taken if you priced them all additionally.
It is my view (just based largely on my own experience trying various systems around the world), that distance based prices, systems with lots of small stages or zones, things like different pricing on one route or time of day compared to others are often very complex, harder to understand and present barriers to use, especially for novice users. You tend to use them for a regular or very specific trip that you can plan in advance, not for the willy nilly travel demands of day to day life.
Personally I would like to see as many people on yearly/monthly passes or day passes as possible, because for them the marginal and transaction costs of using PT are nil so they will use it as much as they care to. With a monthly pass one can simply hop on and off any service they like, connecting across the network to their hearts content, for as long as they like. Effectively using PT becomes as simple as walking down the street or taking out a car with a full tank of gas. That’s why I favour large zones, most people live their lives mostly within their corner of the city.
The Melbourne system is almost perfect in my opinion (excepting the recent issues they have with Myki and the need to buy and top up a Myki to make any sort of trip at all), It allows for seamless connection across the network, and unlimited usage for the time frame people purchase. It is also incredibly simply to understand and get the right fare product, and to know exactly how much a journey will cost. The fact they have two large zones is a good compromise between juvenile simplicity and the geographic dimension of consuming resources.
But admittedly, I come to that conclusion from being a former user of that system who didn’t drive much at all and wanted purely transparent travel on PT wherever and wherever I chose to travel, by whatever combination of services was most appropriate. Perhaps that’s a somewhat selfish view to take, but I think focussing on making things very attractive to potential users should be the first place to start.
From where I sit, you are attempting to use the fare structure as an end run around the farebox recovery policy. This is an effort that is strongly counter productive.
> You could slash the Wellington network down to half a dozen peak commuter runs and achieve greater than 100% farebox recovery across the system, but in doing so you would eliminate almost all the important
> benefits of the public transport network. You’d beat Hong Kong in terms of low base fares and farebox recovery, but it would be a pyrrhic victory, losing a war to win a battle.
I don’t think you need to fear this one.
> Likewise with fare leakage, I’m not sure how much of that exists outside of 9-5 commutes.
If you don’t believe me that it is around 50%, I’ll provide a link: http://www.metlink.org.nz/patronage-numbers/
More specifically: http://www.metlink.org.nz/assets/Statistics/AnnualPeakOffpeak201011.xls
> It is my view (just based largely on my own experience trying various systems around the world), that distance based prices, systems with lots of small stages or zones, things like different pricing on one route or time
> of day compared to others are often very complex, harder to understand and present barriers to use
I would counter that smart card systems remove this barrier. In fact, with the Melbourne system the need to load a myki pass on your card or pay more would be very annoying!
I’m really not concerned with farebox recovery policy. I’m not actually sure what it is in Wellington, but in Auckland we already achieve about 50% so I’m not concerned with trying to make that 60% or 70%. I’d rather focus on growing patronage and mode share than squeezing more out of the fares we manage to get already. I don’t see aiming for patronage over farebox recovery as counter productive.
Smart card systems don’t remove the barriers of things like funny pricing, complex stages and zones. They make it a little easier to be charged after the fact, but stored value keeps all the same barriers as if you were paying in cash. It’s the equivalent of having a a wallet with plenty of cash in it, not really knowing the price of a trip and just paying whatever the fare happened to be once you’ve made the trip. A lot of people don’t have that flexibility to shoot first and pay for it later, then need to know how much they’ll be charged before they decide if they can make the trip or not. If it is almost impossible to work out in advance how much you will be charged for a set of trips or a journey that will still present a barrier to uptake for many people (regardless of whether a card will automatically deduct the right amount after you’ve consumed the travel). Under that scenario you see people sticking to just a regular workaday commute, or the sorts of trips that can be planned out well in advance.
Myki is a bit of dog in my opinion, the need to add credit to a card to buy passes on the fly is bit silly, why not just add passes to the card? Why bother with stored value at all when all you can use it for is to buy ‘units’ of travel, and why are those units priced differently to the big units you buy en masse? It is impossible to buy a single or a day pass, you have to add credit (in multiples of $1) and use that credit to buy a single or day pass. The hugely frustrating thing is that makes it impossible to add exactly enough credit to pay for a base two-hour.
So you don’t care about farebox recovery. I think we have gathered that. Do you care about the base fare? If you really care about patronage then you should. The farebox recovery is about 50% in Wellington too, and going to stay that way.
I don’t see what is so complicated about 14 zones. It’s pretty simple to work out and you wouldn’t notice the difference if the number of zones was reduced to 5.
Absolutely agree that myki is a dog, but what makes it a dog is mostly the stupid periodical options! The low number of zones doesn’t help either, I guess.
Well no, I don’t care about the base fare because a base fare doesn’t really exist under a time based model, at least not on a per boarding basis. I care about what it costs people to use public transport to do the travel they need or want to do, and in particular the perception of value they get out of it.
Out of interest, what about the periodicals do you think are stupid? Personally I hated the fact you could buy a periodical for 1 to 7 days, but not for 8 to 27 days, but then again for 28 to 365 days. I got paid fortnightly, and would have liked to buy my access to the public transport system every 14 days (i.e. on payday). For some inexplicable reason they decided that periodicals of more than one week but less than four were verboten.
I really liked the low number of zones, it meant that I could just buy a zone 1 pass and that covered my regular bus commute to work, getting from work to the university, the tram I took to the supermarket, getting into the CBD on the train for entertainment, and visiting friends around the north and east suburbs. I.e. the zone was big enough that it covered 99% of my travel on a day to day basis. About the one redeeming feature of Myki was the ability to buy a zone 2 top up on the odd occasion I went to visit friends out in the fringe suburbs.
ROTFL. You say you care about what it costs people to use public transport but you don’t care about the base fare. If you can’t see why that is a stupid comment, I don’t see much point in continuing this conversation.
I made that distinction specifically Simon, the base fare is fairly arbitrary unless you have a majority of users every only paying the base fare, and I don’t think either of us is proposing a flat rate. What is more important is the actual fares you require people to pay, and what they get out of it (or rather, the value they perceive to get out of it). Ok so the base fare is important, but only in the context of the overall fare structure. For example, I’ve got no problem with a higher entry cost if people get a lot of value out of that in regards to their travel needs, like wise a low base fare could be useless if no one pays the base fare and the rest of the structure doesn’t meet their needs.
Do you deny that you are attempting to use the fare structure as an end run around the farebox recovery policy? That’s what makes this a stupid and pointless conversation.
You have never said that the free trips would exceed the deterred trips from the higher fares if you got what you wanted.
I really don’t know what you mean by “end run around the farebox recovery policy”, so I can’t confirm or deny it. What I aim to do is use the fare structure to maximise patronage without increasing costs or reducing fare revenue, does that answer your question?
If carrying more people on the same services for the same fare revenue is an “end run around” then so be it, that only serves to illustrate what a stupid measure of efficiency or value for money the farebox recover ratio is. If that constitutes an end run around then I am guilty as charged.
I’m not sure why you’re talking about higher fares or deterred trips, where did I say I wanted to charge people more so that they were deterred from travelling? I said the opposite actually: What I’d hope to do is create a fare structure that filled up empty seats on counterpeak and off peak services, by basically allowing people who had already paid to travel on ‘premium’ peak services access to them at no extra cost.
It’s not about charging people a higher base fare to cross subsidise new subsequent trips elsewhere, it’s basically letting people take those subsequent trips for free because the marginal cost of them doing so is more or less zero because we are running the services already.
Ok, at least now I can see what you are assuming.
From the free dictionary: “end run n. 2. Informal A maneuver in which impediments are bypassed, often by deceit or trickery: made an end run around the departmental finance officer in order to increase the budget.”
The bottom line is that I am sure your assumptions are incorrect. There would be quite a number of people doing more than two trips per day, otherwise you wouldn’t have such a high off peak usage. Others would be potentially doing two off peak trips per day – these do not get the benefit of an off peak discount and so there is an unmeasurable level of deterred trips due to the high fares.
In SE Qld, 15% year-on-year ongoing fare rises have seen off peak falling but peak still rising so it shows where the price sensitivity is. Giving away trips for free after 9 per week has increased off peak slightly, but not very much. In fact, the off peak discount has risen through 0% – 10% – 15% – 20% with every fare rise and it is not enough to curb the reduction in PT use due to the higher fares.
As for your comments about the service running anyway, that is not necessarily correct. If patronage drops enough, I am sure these services will be pulled.
I have a stronger objection to your comment “It’s not about charging people a higher base fare to cross subsidise new subsequent trips elsewhere”. That is clearly NOT TRUE. That is exactly what you are seeking to do.
Thanks for the support, Nick R, saved me a lot of effort!
Hi Simon and thanks for taking an interest in this post. I stated in the post that I don’t think farebox recovery is a primary concern. It is fine at the current level and any potential losses in revenue from a changed system would result in gains from increased patronage.
The above post should be a reply to the exchange between Nick R and Simon L.
Well farebox recovery is the part which is to be held constant, not the base fares. If fares are to be foregone there will be fare rises to compensate. I’d refer you to my post of 13/8/2012 18:33.
I would have thought that I’d made my point.
As I just said before – I’m not at all worried about fare box recovery. As far as I am concerned if we worry about increasing patronage then the fare box recovery will look after itself. I might write a “final schema” guest post later but my proposal will not mean massive fare cuts.
Well that is a very stupid argument that you are not concerned with farebox recovery. For reasons I have previously mentioned, effectively, you are arguing for higher fares to increase patronage. AARRGGHH!!
Fortunately, Greater Wellington Council are concerned with farebox recovery.
You are correct that the proposal of periodicals will not mean fare cuts. It will mean fare increases.
I refer back to my post of 13 Aug 2012 18:33.