There have been a lot of articles in the media recently bemoaning changes to public transport fares as the AT Hop card is progressively introduced. The latest relates to hikes in ferry fares which are coming in the near future:
Big fare hikes for ferry users could hit within weeks.
The North Shore Times has learned of the changes from an industry insider who says Auckland Transport has undertaken a “campaign of non-disclosure increases”.
When asked for a response to the claims, Auckland Transport directed the Times to its website.
The council-controlled group did not confirm or deny the increases were happening, whether tertiary discounts are again being cut or when the new fares will be implemented.
“Auckland Transport has an annual fare review process which is communicated to the media [as it was earlier this year] and to customers through our customer channels.”
But the industry source says changes are a result of the AT Hop card roll-out, taking place across Auckland’s public transport network.
A big increase in fares for some Green Bay bus users occurred recently. Plus it seems like the Discovery Day pass and the Northern Pass – the two existing integrated fare products in Auckland – are going to be phased out shortly. While the AT Hop card’s simplification of the current suite of fare products is a step in the right direction – it seems like there are going to be some really dumb changes to fares in the near future because of two key reasons:
- Auckland Transport not coming up with a much simpler zone based fare system ahead of implementing integrated ticketing.
- Auckland Transport not having a fare policy.
Unfortunately we also have the situation where Auckland Transport are aligning fares at the same time as rolling out the HOP card. This may be the technically easiest solution but it is only serving to give a lot of people a negative impression of the card itself. Had they done number 1 first, the roll-out of HOP would be much much easier.
We’ve discussed the importance of integrated fares and zone based fares many times before, so in this post I’m going to talk more about the need for Auckland Transport to have a proper fares policy.
Setting public transport fares is clearly a very complex balance between being low enough to attract people to use the service but also high enough to minimise subsidy requirements. The latter issue is also affected by NZTA’s completely arbitrary Farebox Recovery Policy – which requires fares to cover 50% of operating costs (Auckland currently manages about 44% recovery). In addition to this complex balance there are a number of other detailed considerations that need to be taken into account in the setting of fares. The list below is by no means complete but takes into account matters that need to be considered:
- The extent to which fares rise with the length of the trip. At one end of the scale there are flat fares where you pay the same amount no matter how far you go – at the other end is something like a pure per kilometre charge. Longer PT trips generate more external benefits (e.g. congestion relief) so there’s a logic for having something in between a flat fare and a purely distance based fare.
- The level of complexity or simplicity in the fare system. In pursuit of ‘optimal’ outcomes it’s very easy to create a fare system that’s mind-bogglingly complex and impossible to understand. Yet overly simple systems can lead to inequitable, illogical or inefficient outcomes: should a trip down the road cost the same as one from Pukekohe to the city centre, should children have to pay the same as adults, should someone travelling off-peak and not adding to peak capacity problems have to pay the same as someone at peak times? Once again a careful balance needs to be found.
- Building on the above, the extent of concessionary fares is something that can be really complicated. Should a super-wealthy retired person really get free PT while a struggling working family have to pay full fares? Should university students get a discount when they’re pretty likely to catch PT already?
- A further consideration is the extent to which the fare system should favour or encourage certain types of users. Should monthly pass holders get a particularly good deal because they’re the ‘best customers’? To what extent should smart-card users get a discount compared to people who pay with cash? And as above, is there value in providing a discount for off-peak travel? Or – dare I say it – should there be family/group passes?
As you can tell from the above, I have posed far more questions than I have answered – because this is a complex issue which involves significant value judgements and decisions to sit behind it. It needs some clear objectives, things like: maximising patronage, recognising the importance of a simple and easy to understand system, providing value for money (both for passengers and for public agencies picking up the subsidy), catering for those with fewer transport choices, encouraging people to use the HOP Card, encouraging people to make transfers where that’s an efficient outcome etc. It needs to be clear about the tradeoffs between different objectives – like how maximising patronage may conflict with maximising farebox returns.
In relatively recent times we have seen the mess which occurs when you don’t have a fare policy. The most recent fare rises saw the gap between HOP fares and cash fares narrow (contrary to efforts to get more people using HOP), saw monthly pass prices increase while single fare cash prices stayed the same (contrary to rewarding best customers and encouraging more people to use monthly passes) and saw fares for longer trips that generate the most external benefits increase while fares for short trips generally stayed the same. Plus the huge backlash against the fare zones proposed in the draft RPTP and the recent angst over fare changes as the AT Hop card is implemented.
The solution to this mess seems incredibly obvious to me: Auckland Transport needs to prepare a cohesive fares policy, which gets into much more detail about the mechanics and trade-offs of the different fare options than the draft RPTP did. Auckland Transport then needs to consult with the general public and key stakeholders about the policy, get general buy-in, and then use that policy to guide what it does in the future about fares.
Seriously. Not that hard and it would save them a lot of angst.
On a slightly related note, the stupidity of the way our PT contracting works where Fullers are allowed to do whatever they want on the Devonport and Waiheke routes due to them being fully commercial has thrown up classic example of how dysfunctional things are. Recently Fullers decided to replace their ticketing system due to their old one getting a bit long in the tooth but rather than just hook fully into the HOP system, they have launched a separate system allowing them to offer ferry tickets not available to HOP users. With crap like this, it’s no surprise that the HOP usage on Ferries has been abysmal with less than 5% of all ferry trips being paid for using HOP according to the most recent stats produced by Auckland Transport.