Auckland Transport have just announced a the results of their annual fare review.
2013 Annual Public Transport Fare Review
Auckland Transport (AT) has completed its annual review of bus, ferry and train fares.
An annual review of Auckland public transport fare prices is undertaken by AT in accordance with its service contract obligations with transport operators.
This year, there are no across the board increases in fares, but there are targeted fare changes. The fare changes are designed to align bus and rail fares and, for ferries, to align fares on 10-trip paper tickets and AT HOP cards in preparation for the final rollout of the AT HOP card across AT services during the rest of 2013.
Bus and Rail
Single trip cash fares will remain unchanged across all bus and rail as will adult and child* NZ Bus fares and child AT HOP and child 10-trip fares. Increases to some adult AT HOP and adult bus 10-trip tickets are needed. These will be between 2c and 22c per trip.
Some bus and rail, return pass, daily pass, monthly pass and multi-operator fares will also change in preparation for the transition to integrated bus and rail monthly and daily passes.
There is no general fare increase. Some ferry fares have reduced; targeted fare changes are proposed to achieve alignment of fares for 10-trip paper tickets and AT HOP cards and improved alignment of historic differences in fares for similar distance services.
For example, short distance inner harbour services such as Devonport, Bayswater and Birkenhead 10-trip paper tickets will increase up to 20c per trip but with reductions in AT HOP fares.
Beach Haven, Hobsonville and West Harbour ferry service fares will remain unchanged or be reduced.
Across bus, rail and ferry the discount offered to tertiary students will reduce from a minimum of 38% to a minimum of 35% off the adult single trip cash fare, resulting in individual fare increases of between 7c and 40c per trip.
“Auckland Transport is working hard with its operators to provide greater connectivity and efficiency between public transport modes as well as better integrated pricing structure and price parity”, says Auckland Transport’s manager of Public Transport Operations Mark Lambert.
“We all know that Auckland’s roads are under enormous pressure and increased use of public transport across all modes has to be part of the solution to that problem”.
“Making public transport services customer friendly, and with a fare structure that makes them an attractive choice for people is a priority for Auckland Transport and its operators. Our New Network programme which is starting to be consulted on in June, forms part of that approach”, says Mr Lambert.
The new fares come into effect on 3 June.
For further information: www.AT.co.nz
*Children aged from 5 to 15 years inclusive and full-time secondary school students aged between 16 to 19 years inclusive (provided they are able to show a current Auckland Transport approved secondary school student ID, or are wearing a recognised school uniform. Please note that there will be no exceptions to this policy – proof of school attendance must be provided at all times).
I must say, I find it very odd that cash fares are being left but that HOP fares are being are being increased. Surely a better option would have been to at least increase cash fares by a greater level so to increase the effective discount being provided.
The actual fares aren’t online yet so we will have to wait to see exactly what the changes are.
In his column this morning, Brian Rudman covers an area we haven’t been paying enough attention to, how the changes to the Land Transport Management Act will affect the governance of transport in Auckland. Rudman starts out by explaining the situation:
By sheer weight of numbers, elections are won and lost in Auckland, so it would seem suicidal for a government to declare war on a third of the population. But that seems to be exactly what the Key Government is doing.
Of course it’s not the first government to see Auckland as “the enemy”. Labour’s finance spokesman, Michael Cullen, once infamously quipped to a Taranaki election audience that “Auckland now sits atop the nation like a great crushing weight”.
But National’s current behaviour has a pattern to it that goes beyond pre-election hyperbole. Having created the Super City less than three years ago, it is acting as though it was all a big mistake and the aim is now to emasculate the monster it created.
In recent times, the mortars have been lobbed across the Bombay Hills from Wellington in a near-continuous barrage. Last week, at a post-Budget meeting with Wellington businessmen, Finance Minister Bill English warned: “We cannot let 20 planners sitting in the Auckland Council offices make decisions that will wreck the macro economy. We cannot let that happen, and we won’t let that happen.”
This was hot on the heels of the charade of the Auckland Housing Accord. This was supposed to signal the working-out of a mutually agreed solution to the city’s housing shortages. Yet a few days later, Housing Minister Nick Smith was threatening to “intervene by establishing special housing areas and issuing consents for developers”.
The idea that the government is lobbing verbal and policy mortars over the bombays seems like quite an apt description. I suspect that there are much more than 20 planners sitting in the council offices, although perhaps Bill is just referring to the senior staff. Rudman continues:
Sailing below the radar is the most concrete example of the Government’s efforts to sabotage Auckland’s local democracy. The tool being used is the boring-sounding Land Transport Management Amendment Bill, which will become law early next month. It will usher in a significant transfer of power in the area of transport planning, from the Auckland Council to the Government.
The new law strips Auckland councillors of their power to decide how the $459.5 million of ratepayers’ money – 33 per cent of total rates income – spent on transport each year is targeted. Instead, the final arbiter will be the unelected board of Auckland Transport, which will have to follow the Government policy statement (GPS) on land transport. The only sanction the Auckland Council will have to control the board of Auckland Transport – a council-controlled organisation – if it goes feral is to sack it. But the new law insists the board’s first loyalty in setting transport priorities must be to the government GPS, so what would a replacement board do differently?
This is quite concerning, the GPS effectively sets out governments funding priorities and ranges. At the moment they have focused almost entirely on the building of new roads and specifically the Roads of National Significance at the expense of other state highway improvements, local roads and of course public transport. Being fair, the current government didn’t set up the GPS as it was brought in by the previous government. This also shows one major flaw when complaining about it, it can be changed by a future government. A change in government could see funding priorities for which we may be thankful should we ever have an anti PT council.
Its also funny how Bill English complains about a handful of planners sitting in Auckland making decisions that could wreck the economy but doesn’t object to probably a similar number sitting in the MoT offices in Wellington making decisions that will wreck the cities future transport network and economy. But it gets worse:
The new act also ignores another statutory document, the Auckland (Spatial) Plan, which sets out Auckland’s direction and policy, including the integrating of land-use with transport.
Speaking to the select committee on behalf of the Auckland Council, transport committee chairman Mike Lee complained of the impending loss of democratic accountability to Auckland ratepayers, pointing out that Auckland would be the only part of New Zealand where elected representatives would not set the local land transport plan.
He said that by law, the principal objective of a council-controlled organisation such as Auckland Transport was to “achieve the objectives of its shareholders, both commercial and non-commercial”. He said the situation “would in effect be creating two local governments in Auckland”.
It was “appropriate in terms of its statutory responsibilities and as owner, major funder and sole shareholder of Auckland Transport, that the Auckland Council continues to set the long-term direction for transport”.
The select committee did the reverse, noting that it had gone out of its way to recommend changes “to ensure that Auckland Transport may not delegate its responsibilities for regional land transport plans and passenger transport plans to the Auckland Council”.
It did this by repealing the Local Government (Auckland Council) Act 2009 clause that says the governing body of Auckland Council is responsible and democratically accountable for setting transport objectives for Auckland.
So not only are we being forced to have to follow the governments transport agenda but our elected representatives won’t even have the chance to set the high level strategy any more. This is effectively taxation without representation and is shameful. To me it also suggests that the government are scared of the amount of power the council has. They were expecting a different result 3 years ago but it backfired so now they are trying to back pedal as much as possible to regain control of the city.
In saying all of this, while it is a concern that the council is being shut out of the process for setting policy, I know that there are many very good people at Auckland Transport who are not about to quickly jump on the more roads agenda. Hopefully they will be able to keep things going in the right direction until such time as a future government can resolve this – although it is very rare for a government to give up acquired power so we will just have to wait and see.
If we did start to see some really bad projects being progressed ahead of much needed ones – well more than they are already – I wonder what ability the council will have to withdraw funding for them? If they say that they won’t provide any rates funding unless the projects proposed meet the councils goals then we could end up in a very public power struggle.
As we know, public transport in Auckland often leaves a lot to be desired with it only seems to work really well in a handful of situations. The good news is that despite a few delays and false starts, we seem to be on the right track and over the next few years there are a few massive changes happening. We will get an entire fleet of brand new electric trains, an entirely revamped bus network and tying all together will be integrated ticketing and fares. There are a few other important things going on behind the scenes like the roll out of a new contracting regime but that is something that most people won’t know or care about.
Communicating some of these changes is not going to be easy for Auckland Transport as there is simply so much changing over what is a relatively short period of time. There are also bound to be some challenging times for the organisation, especially in relation to the changes for new bus network. So it is good to see support and communication for the changes coming straight from the top of the organisation. In an opinion piece in the Herald today, Chairman Lester Levy provides his thoughts.
Restoring faith in Auckland’s transport system
When it comes to transport in Auckland the stakeholders are as many and varied as are the differing and divergent views.
I guess it has always been like this and over many decades ad hoc decisions, decisions half-made, questionable decisions and decisions deferred or never made have severely limited options.
Transport solutions in Auckland are well behind where they should be, but not where we have to stay.
I have been chairman of Auckland Transport for six months. What do I see? Public transport in Auckland is just not yet good enough. The trains do not run frequently enough and frequently they do not run on time. The bus real-time information does not seem real to many, because it is not, a lot of the time.
Peak times on trains and buses are often very crowded and it just seems like there are not enough of them – that is because often there are not. The new AT Hop card has had some issues – these have been very frustrating for passengers.
Doubt, distrust, ridicule, criticism – that has largely been the history of transport in Auckland. The possibility that transport issues in Auckland could ever be resolved seems to have been consigned to the wastebasket of history.
I believe a large part of the problem is there have been so many strategies and plans that it seems to me that figuring out what to do has become more important than actually doing something.
Perhaps because of this, far too many Aucklanders have lost faith that there is an alternative to their private car.
There is no need to declare defeat.
Change is coming fast! I believe that Auckland’s transport problems can and will be resolved – but it will not be easy.
Imagine if every negative, downward-spiral critic had prevailed in history. We would have no antibiotics, no air travel, no smartphones and a whole bunch of other fantastic stuff that has enriched our lives. We need to move beyond the downward spiral critics (even many of the transport reports are loaded with pessimistic assumptions and outcomes), but just as importantly we need to take off the rose-tinted glasses, confront reality and be very honest about where we are with transport in Auckland and very clear about where we need to be.
As I said, change is coming fast. Neighbourhood by neighbourhood, transport operator by transport operator, mode by mode, route by route, street by street – we at Auckland Transport are taking this thing apart piece by piece and will return it put back together in a new form – a form where public transport will operate with precision.
High frequency, reliability, attractive and affordable pricing, higher levels of passenger comfort, accurate and accessible information and high levels of safety and security are the principles that we are now moving forward on.
What we are proposing is not a simple “chemical face-peel” where the changes are minor and temporary. For a few months the skin looks perfect and then just returns to what it was before. What Auckland Transport is about to undertake is “major reconstructive surgery” where the changes will be significant and permanent.
Auckland Transport is embarking on a full review of every single bus route, a major upgrade of the trains, new ferry services, new fare structures, new ways of paying for everything – so much needs to be turned around and we are going at public transport like it has never ever been done in Auckland before.
Auckland Transport is going to create a public transport network of buses, trains and ferries that will present as a highly desirable option for those who have never really considered it before. Critical to providing public transport in a totally different paradigm is planning and delivering the services totally from the perspective of the passenger – not of the bureaucracy or the provider. Revolutionising the passenger experience is fundamental to moving forward.
Sure, we will need to build more infrastructure (and hard choices will need to be made), but let us not miss the opportunity right in front of us to extract the huge and unseen potential from our existing investments. It is not simply about building more, it is also about getting a lot more out of what we have and then when we do build more we will get outcomes that currently seem unlikely.
Change will happen, but like all progress will take time – in three years transport in Auckland will be different and by 2020 it will be very, very different.
This comes less than a week after AT launched the excellent new video for the new PT network that we are getting.
Some you may recall that a month or so ago my colleague Jarrett Walker came to Auckland to talk about public transport. In this presentation, Jarrett discussed some of his work on Auckland’s new network. The general thrust of his talk was that improvements to Auckland’s bus network will play a crucial role in Auckland’s future public transport network. Highlight of the talk for me personally was Jarrett’s suggestion that we need to start thinking of buses as ”pedestrian fountains“. That’s a point to keep in mind the next time you look at pictures of Auckland’s city centre filled with people enjoying themselves; many of those people will have arrived by bus.
Jarrett also emphasised the often overlooked fact that even post-CRL, significant numbers of people will still be arriving in Auckland’s city centre by bus, especially from those areas which are not well-served by rail. For example, buses will still be required on Manukau Rd, Mt Eden Road, Dominion Rd, Sandringham Rd, and Jervois Rd, which are some of the densest parts of the region. The CRL does not make buses go away, even if it allows their role to change in some parts of the region, and that buses will continue to be an important part of Auckland’s public transport system for the foreseeable future.
For this reason Jarrett suggested that we start thinking about how buses can be integrated into the city in a way that enables them to move efficiently, without clogging up the roads and detracting from urban amenity. And that means – in my opinion – that we need better bus infrastructure, like what you find in more enlightened cities overseas. Indeed, even Vienna – which is a city known for its relatively dense metro and tram network – has a bus system that carries 120 million passengers per year. That’s more than twice the passengers currently using Auckland’s bus network. Basically, there is no conceivable (realistic) future for public transport in Auckland that does not involve making better use of our buses.
Jarrett really lays down an intellectual challenge to people that “hate buses”.
In his talk Jarrett also emphasised that the best bus routes almost always make the best tram routes. So if you are a person who want trams to be part of Auckland’s transport future (and I would count myself as one of these people), then the best thing you can do is support the development of a high-quality bus network supported by appropriately future-proofed infrastructure.
Anyway, I hope you enjoy the presentation, albeit without audio/video (technical difficulties on the day meant this is unavailable). In my next post I’ll upload a copy of Jarrett’s talk at the public transport careers evening that was held at the University of Auckland (again apologies for the delay with getting this uploaded; I know some of you have been asking for it).
And for those of you who missed hearing Jarrett on his last visit, rest assured that we’re already working to bring him back to Auckland later this year.
At an announcement today, Auckland Transport have said that the AT HOP card will be start going live on buses in June with Urban Express buses the first to go live.
AT HOP roll-out planned for buses in June
Following its introduction on trains and ferries at the end of 2012, the AT HOP card has now completed testing on buses. Testing commenced in April, ahead of the planned, public rollout to all Auckland bus services from June this year.
Auckland Transport’s Chief Operating Officer, Greg Edmonds says, “This final stage of the roll-out of AT HOP is the largest piece of one of the most transformational transport projects in the city. Auckland has 1100 buses in its fleet and carries 80% of public transport users which equates to 54 million passenger journeys a year. This means the roll-out is significant and must be handled carefully”.
Mr Edmonds says that in order to manage the scale of the roll-out Auckland Transport will be phasing the introduction of AT HOP on buses to ensure the smoothest transition possible for customers.
The roll-out is planned to start with Urban Express bus services in June. Birkenhead Transport, NorthStar, Ritchies, Northern Express, Metrolink, Go West and Waka Pacific are planned to follow through to November.
Howick & Eastern, Bayes, Fullers Waiheke Bus Company, the Airporter and Airbus are planned in the final phase to the end of the year.
”As each bus service begins its roll-out we will be providing more detailed information to customers.” Mr Edmonds says.
“The AT HOP card will bring Auckland in line with many other international cities by providing an integrated public transport ticketing system”.
The AT HOP card can be topped up online, at an Auckland Transport Ticket & Top Up machine or in person at a ticket office. Purchasing an AT HOP card may save up to 10% off single trip cash fares (excluding the NiteRider bus service). An AT HOP card also allows free unlimited access to ride on the City LINK bus service.
Registering an AT HOP card online helps to protect your card from unauthorised use should it be lost or stolen, while also helping to protect the balance stored on the card within 24 hours from the time it is reported missing. Cards can be registered online at ATHOP.co.nz.
Based on what we saw when the Snapper HOP card rolled out and when the system went live on the trains, there are obviously going to be a lot of communications to go out and that process will start next week. They also said that ticket machines would be going in at Northern Busway stations and that they would be rolling out a network of at least 55 locations where people can purchase and top up their cards if people don’t want to use the online facility. I will post a map once AT are able to provide it.
The process for changing over to HOP sounds like it will be very similar to what happened when NZ Bus launched the Snapper Hop card. There will be free HOP cards for those with existing operator specific cards and the balance will be able to transferred to the HOP card however it will be easiest if the cards are run down as much as possible. If you have a Snapper card and want to keep it for micro transactions then you can do so. There will also be plenty of ambassadors at bus stops to help out too.
It is expected that all bus companies will be operating using HOP by the end of the year and in 2014 Auckland Transport will start the processes needed to move to integrated fares.
Many readers have already noticed that the HOP readers are starting to be installed on buses and quite a few of you have sent in photos of them. Here is one example from Andrew.
What was also interesting and extremely positive, was to see the NZTA at the announcement too supporting the need for integrated ticketing. They have also issued a press release regarding it.
Auckland’s HOP card extension good news for NZ says NZTA
The NZ Transport Agency says the rollout of new electronic ticket readers on Auckland buses will also be good news for people using public transport well beyond the boundaries of New Zealand’s largest city.
“Auckland, because of its size, is the foundation of this extended electronic fare-paying system. We’re confident that this is a well designed system for the city that can be easily modified and adapted for use in other centres,” says the NZTA’s Group Manager for Planning and Investment, Dave Brash.
The installation of the ticket readers on buses from next month means Aucklanders will need only use their HOP smartcards once to pay for a multi-mode trip on all public transport services – ferries, trains and now buses.
The NZTA has partnered with Auckland Transport and its predecessor, the Auckland Regional Transport Authority, since 2005 to develop the city’s integrated ticketing programme, with an estimated funding contribution of $59.5m and the development of a parallel national ticketing programme, including the development of a national ticketing standard which enables integration with ticketing equipment and transport service providers in other centres.
Earlier this month, the NZTA awarded its first national ticketing standards compliance certificate to Thales New Zealand after the successful certification of the company’s new ticketing devices for Auckland’s buses. Mr Brash says NZTA investment in the development and implementation of the Auckland Integrated Fare System (AIFS) to create national ticketing standards delivers several benefits for public transport users all across the country.
”The central processing system developed for Auckland can be re-used by other regional councils as part of a national framework. As regions upgrade their ticketing systems, they will be able to purchase equipment which complies with the national standards and plug into the central processing system, ensuring that they will enjoy the benefits of a shared national systems approach, rather than having to pay a premium to develop separate ticketing systems.”
Mr Brash says the national standard could eventually mean people being able to use the same smart card in more than one centre, and the information about travel patterns in different cities collected by the NZTA’s central processing system would also provide a wealth of data that can be used to make better informed public transport decisions.
“Cities around the world with effective integrated ticketing systems have seen strong growth in public transport patronage, a better return on new public transport investments, and better road transport efficiency.
“We are aiming to achieve the same results here in New Zealand. Our growing cities mean more people rely on easy to use, effective public transport to get around. A key feature of successful public transport networks around the world is an integrated ticketing system that allows people to transfer easily between bus, train, ferry on a single ticket, making public transport a more attractive option.”
It’s good to finally have some solid information about this. There were lots of questions asked about the project so if you want to know something, ask and I will try and answer.
There has been a lot of talk about the new bus network that was first proposed in the Regional Public Transport Plan. Thankfully it received extremely strong support from those that made submissions allowing Auckland Transport to start working towards implementing it. While the overall concept has been accepted, there is still a long way to go yet as the specific routes that make up the network will need to be consulted on. Today Auckland Transport have formally started that process with the release of a video to explain the new network. Here is the press release:
Transforming Auckland’s Public Transport Network
Auckland Transport will shortly hit the streets to consult over the New Network for public transport services in Auckland.
The New Network is a region wide public transport network which is proposed to deliver bus services at least every 15 minutes throughout the day, seven days a week on major routes between the hours of 7am to 7pm. Services will connect better with train services for those customers who require connections.
The New Network will be rolled out by Auckland Transport over the next three years starting with bus services in South Auckland in 2014/15.
To help people understand what the New Network will mean for them, prior to consultation, Auckland Transport has released a video guide today. It can be viewed at: http://www.aucklandtransport.govt.nz/newnetwork
Auckland Transport’s Chief Executive David Warburton says; “We are in a period of transformational transport change in Auckland. Any change is challenging. Significant changes in the transport area in Auckland includes the completion over the coming months of Auckland’s integrated smartcard for public transport, the final step in the introduction of the AT HOP card on bus services following the roll-out last year on trains and ferries, the arrival of the first of Auckland’s fleet of new trains and our New Network for public transport services. These are large-scale transport projects for a city undergoing transformation.
“If Auckland is to cope with expected growth in population, public transport must become a very real transport choice for more Aucklanders. But in order to encourage greater uptake, we need to make bold changes to provide a better level of service, respond to public demand and expectation and provide better connections to the places people want to go.
“Due to the sheer scale of the changes we are proposing, consultation and implementation for the New Network will be broken up into several phases. Consultation on the New Network begins in June in South Auckland. Other parts of Auckland will be consulted on in the coming years”.
Dr Warburton says, “The changes will not happen immediately. Any significant transformation requires disruption which is part of change. Implementation of the New Network for public transport will be challenging for a period.
“The video released today demonstrates the scale of the changes the New Network will bring to Auckland.
“In June and July, Auckland Transport will have people in the markets, shopping centres, transport hubs and on the streets in South Auckland talking to customers about these changes and getting their views”.
Dr Warburton says, “ The public will be invited to fill out feedback forms at the Open Days and can also provide feedback at our consultation webpage www.aucklandtransport.govt.nz/newnetwork, or by filling out our freepost feedback form”.
I must say, this is probably the best press release I think that AT have done. I love how they have talked about how transformational this will be and how all of the key PT projects, integrated ticketing, electrification and the new bus network tie in together. But the good news doesn’t stop there. The video they have produced is superb and easily the best they have done to explain any project. It excellently explains why we need the new network, the logic behind it and even some of the finer details about the proposal.
On the page AT have set up for the new network, they also have a new and very pretty version of the frequent network map that we have seen before.
All up I am very happy, not just with the new network but with how AT have started to communicate it. If they carry on in this same vein for both the network and other projects like the CRL then it will really help in getting the public to understand why these projects are needed.
Good work AT, give yourselves a pat on the back.
*** This is a collaborative post by Peter Nunns and Stuart Donovan ***
One criticism of road pricing is that it is merely a regressive method for raising revenue that will widen existing social inequities. That could be true – except that we would suggest road pricing is not in fact a revenue-gathering measure at all, but instead a method for increasing the efficiency of our road system.
In this post we argue that – when implemented for the “right” reasons and in the “right” way – road pricing should not only reduce the costs of congestion – and thereby allow us to avoid the need to expand transport capacity at great expense – but do so in a way that does not necessarily worsen social inequities.
So what is the right reason to introduce road pricing? It’s understandable there is some confusion about this question, which was not helped by the “Keep Auckland Moving” discussion document. That document presented road pricing as a way to raise revenue for costly road projects; its effects on the demand for travel was mentioned only in passing:
Rather than being a measure intended to raise revenues by charging a “captive audience” of road users, we view road pricing as a measure aimed at improving the efficiency of the transport system. When you look at it in this way, it becomes possible to implement road pricing without necessarily widening existing social inequities. In fact it could even, under the right conditions, be relatively progressive.
First, it is worth mentioning that economists, such as ourselves, often try to distinguish between:
- Measures designed to improve the efficiency of the economy, and
- Measures designed to improve the equity and fairness of the economy.
Most people (including us!) aspire for an economy and society that is both productive – in the sense of allowing us to get the maximum aggregate reward for our efforts – and equitable – in the sense of ensuring that people are neither reduced to poverty nor alienated from the rewards of their labour. However, it’s generally possible and often desirable to consider these two issues separately.
People have come to accept this logic in many areas of life.
Food, for example, is a basic necessity of life if there ever was one. Food is currently priced by the market, which means that farmers and retailers charge the highest price they are able to get, even if it means that some people can’t afford the food they’re selling. We accept this state of affairs because it often results in more efficient outcomes compared to alternative approaches, such as food subsidies.
On the other hand, most people generally don’t want their fellow New Zealanders to starve to death.
For this reason New Zealanders have individually voted for a social welfare system that uses progressive taxation and transfer payments as a way of ensuring equitable access to food (and housing and other necessities of life). We allow food to be sold in response to price signals, but then redistribute some of the economic gains that results to ensure everyone has access to food.
We would argue that what’s true for tomatoes is true for transport. In the words of the UK’s Eddington Transport Study:
Similarly, a 2010 study by the Australian Treasury, titled “Australia’s Future Tax System”, recommended the introduction of road pricing – but not primarily to raise revenues. The study was quite clear that the main gains, or economic benefits, arises from reduced congestion and a more efficient transport system:
In fact, this study explicitly recommended that road pricing be revenue-neutral and that all revenue collected should be recycled back into the (public) transport budget:
Hence, in most other places the primary objective of road pricing has clearly not been to raise revenue. Instead, it seeks to improve efficiency, which in turn improves aggregate well-being: Less time wasted in traffic, more productive businesses and workers, and less need for costly public investment in road capacity.
Notwithstanding these benefits, we accept that road pricing is likely to have an adverse impact on some low-income households.
This is largely because transport demand is relatively inelastic in the short run. People have chosen to live in certain places and work in certain jobs, and as a result will need to travel at peak times. As a result, the short run effect of road pricing would be to impose costs on everyone who needs to travel at peak times, regardless of their income, and some low-income households will be adversely affected.
In the long run (say 5+ years), these households are likely to adjust their behaviour in response to road pricing. People would choose to live closer (or further away) from work and school, businesses would adjust work hours, and transport agencies would (hopefully) provide more public transport and walking and cycling infrastructure.
But it takes time to change those patterns – to change jobs and homes, or to create new transport options on given routes. It’s understandable that economists’ halcyon “long run” is little comfort to the people facing unsupportable costs in the here and now. So this brings us to our second question: What is the right way to implement road pricing?
We agree that the distributional effects of road pricing – or any pricing mechanism, for that matter – are an important consideration. However, when confronted with the risk of adversely affecting low income households it seems to us that the most appropriate response is not to persist with an inefficiently managed transport system, but instead to identify supplementary mechanisms that can compensate affected low-income households.
That means using the financial gains from road pricing to offset potential negative impacts on low income households. This could be done in a number of ways. For example, we could:
- Expand public transport services and walking/cycling infrastructure, particularly in low-income areas. This would give people more transport choices and hence increase their ability to respond to road pricing.
- Provide direct financial compensation to households adversely affected by congestion charges, by increasing transfer payments to low-income workers or reducing taxes on lower incomes.
- Reduce the cost of travelling at off-peak times, e.g. lower fuel prices and an off-peak public transport discount. Low income households tend to travel disproportionately more at off-peak times.
These options are only possible if road pricing is not seen primarily as a revenue-gathering exercise, but first and foremost as a way of improving the efficiency and productivity of an urban transport system. Thus, when implemented for the right reasons and in the right way, road pricing might help us to achieve a society that is both more efficient and more equitable.
About the authors: Peter Nunns and Stuart Donovan are friendly bearded economists based in Auckland. They have a passionate interest in transport (past, present, and future), smoked salmon, and beards. The opinions expressed here are our personal views and do not reflect upon the position of any organisation with which we are associated, or constitute professional advice.
Auckland Transport have released some new photos of the first of our new electric trains being built in Spain. Here is the press release:
The countdown is on for new electric trains to commence passenger service in Auckland.
The first train is about to roll off the production line at Construcciones y Auxillair Ferrocarriles (CAF) in Spain. CAF is building a fleet of 57 three-car high-speed train sets to carry passengers on the Auckland suburban rail network. These new state of the art trains have been designed to meet the specific needs of Aucklanders and feature the latest in terms of safety, comfort and reliability.
The first train is expected to leave Spain in June, arriving here in early September. Between September and April the new trains will be thoroughly tested and used for driver training before going into operation once there is a sufficient number to run a commercial service.
And for the first time we can reveal the seating layout for the trains. This comes after Auckland Transport consulted with user groups (including the mobility impaired and cyclists) on what they need from the trains.
Auckland Transport Chief Executive David Warburton says, “The input of various interest groups has helped with the final layout. These trains are designed specifically for the needs of Aucklanders.
The three-car trains carry up to 375 passengers, around 100 more than the current trains or an increase of over 35 per cent.
All cars will have a variety of seating arrangements. The longitudinal seating will be Priority Seating for people with mobility issues, seniors and parents with children as well as those travelling with large items like bikes and cases. There will be four sets of flip up Priority Seats inside the middle (or trailer) car where bicycles and wheelchairs can be secured for travel.
Dr Warburton says, “Passengers will be able to walk the full length of a three car train via the connection between the motor cars and central trailer car, making it easier to find a seat and meaning increased safety.”
And here are the images. The first shows what appears to be an almost completed motor car (there are two in each three car set)
While the second image shows the interior which is still being fitted out however is already looking very nice
I can’t wait till these are on the tracks and carrying passengers.
In this recent post on Auckland’s transport funding gap, Peter Nunns espoused the merits of time-of-use transport pricing as a way of increasing the productivity of the transport system. Peter came up with this analogy to help highlight the merits of time-of-use transport pricing:
Let’s say you’re managing a factory. Your machines are running at 100% utilisation ten percent of the time, and 20% utilisation the rest of the time. This is constraining your ability to produce more, so you ask the chief executive for money to buy more machines. His answer, if he’s got any sense, will be: “Get knotted. You need to manage your workflow better.”
As some of you may know I also support time-of-use transport pricing (articulated in posts here and here). Notwithstanding my general support, I do accept there’s important design and implementation issues to work through. For this reason I’m relatively relaxed about timing and would prefer that – instead of rushing headlong into a particular solution (as the NZCID would have us do) – we instead took the time to have a decent/informed public debate about the concept. I hope that such a debate would end with the majority of people supporting the idea in principle, which would then enable political/technical leaders some space to work out exactly what we should do, how we should do it, and by when.
In this post I simply wanted to reflect on two of the dissenting comments raised in response to Peter’s post. For example, one person commented:
My understanding is that NZTA and the government are principally opposed to a discriminatory tax on assets that have already been paid for.
This statement suggests that time-of-use road pricing is a “tax”. From what I understand, taxes are typically used by governments to fund any number of activities that are largely unrelated to the activity being taxed. Income tax and GST, for example, are used to fund a whole manner of things, such as education and health. In contrast, revenue raised from transport activities (at least in New Zealand) are hypothecated to operating, maintaining, and improving the transport system (the MED website provides a breakdown of the various duties, taxes, and levies that are applied to liquid motor fuels in New Zealand for those are you who are interested).
The second part of the aforementioned comment part inferred that time-of-use transport pricing was wrong because the “assets have already been paid for“. I don’t think this is a credible argument for several reasons.
The first reason is that it presumes new roads do actually pay for themselves, insofar as the fuel duties paid by drivers are adequate to cover the lifetime costs of construction and maintenance. This is patently not true of local roads, where costs are part-funded by rate-payers, not road-users. I suspect it’s also not true of many of the RoNS, which would certainly struggle to cover their costs. Hence, it’s not really the case that new roads are paying for themselves, it’s just that their financial ass is being covered by old roads that have more than paid for themselves. I don’t know when roads actually “break-even” (and suspect it varies a lot from place to place), but suspect that many of our recent improvements don’t come close.
But the more critical issue with the suggestion that the “assets have already been paid for” is that the costs of a road do not end with construction and maintenance.
More specifically, roads incur ongoing congestion costs, which tend to arise at peak times. Now I do understand that congestion is a less tangible economic costs than construction and maintenance costs, which must be funded directly out of the transport budget. In contrast to these costs, congestion is an external, non-monetary cost. When we say “external” we are referring to the fact that the person who chooses to drive in congested conditions does so without having to bear the additional delays they cause to other drivers that are stuck in the queue behind them. Hence congestion is an external cost that arises from our individual decisions to drive. Despite being less tangible, it’s nonetheless real – as any commuter will know!
So rather than being a tax, time-of-use transport pricing is, I think, better seen as a targeted user-charge. One which seeks to place the costs associated with travelling at peak times at the feet of the people who are making those decisions. And given that much of our transport budget is currently being spent on transport projects that are designed to cater for people that are travelling at peak times, then it makes sense to charge more for these trips than for trips that take place at off-peak times.
Having raised those two issues, the same person went onto state:
The charge is a mechanism to force people to change the mode they use to travel. In the case of congestion charging it makes PT more attractive in comparison to driving … In effect you are shifting the equilibrium in favour of the poor using PT and the wealthy driving.
My first issue with this statement is the presumption that the primary benefit of time-of-use road pricing is that it changes existing behaviour. Naturally modal shift from cars and to PT would occur and result in less congestion. Such a benefit can be thought of as a “static efficiency“, in that the benefit arises from improving the efficiency with which people currently travel. In saying that the experience with time-of-use road pricing overseas is that 80% of people keep driving, i.e. the majority of people kept doing what they have always done, and there is very little change in PT use.
So I would argue that the primary economic benefit of time-of-use road pricing lies less with it impacts on people that are currently driving, and more with how it impacts on people’s future decisions about where they live/work/play; it impacts on our future land use and transport decisions.
Benefits from more efficient decisions being made in the future can be thought of as “dynamic efficiencies“. By sending a price signal about the relative scarcity of road space at peak times, time-of-use road pricing will progressively encourage people and businesses to make choices in the future that help them to avoid situations the need to drive at peak times. Thus, the dynamic efficiencies of time-of-use transport pricing will accrue progressively over time, by discouraging people from making decisions that result in inefficient transport and land use outcomes.
I would suggest the dynamic efficiencies of time-of-use transport are more important in a city like Auckland, which is expected to grow rapidly over the coming decades.
As an aside, the potential for time-of-use road pricing to deliver dynamic efficiencies is a major reason why I don’t buy the line that “we need to invest in alternatives first” before we consider implementing a time-of-use transport pricing scheme. The reality is that we already have the primary “alternative”: We simply need people to exercise more discretion about where they live/work/play to ensure they don’t end up driving so much at peak times. And the longer we go without time-of-use transport pricing, then the fewer people who make transport/location decisions in consideration of their true costs and the harder it will be to implement such a scheme in the future.
Consider, example, the Auckland Plan’s proposed greenfields development around Hobsonville and Pukekohe. Do you think such locations would be equally attractive with time-of-use road pricing? And do we think that implementing time-of-use transport pricing will be more or less easy once these suburbs have developed and lots of their residents are now driving elsewhere to work? Personally, I think the answers are “no” and “much less easy” – which is why I suspect the dynamic efficiencies of time-of-use transport pricing would quickly dominate the static efficiencies associated with (relatively small) mode shift.
The second issue that I would like to address is the suggestion that “the equilibrium will shift in favour of the poor using PT and the wealthy driving“. The point that is being made here is that time-of-use transport pricing is likely to result in our transport system being prioritised for high-value travel. And it is true that the latter is positively correlated with income.
In saying this, I think it’s important to consider the following issues:
- Income is not the primary/sole determinant of people’s willingness-to-pay for travel. I would argue that many other factors determine how much someone is willing to pay for transport, e.g. the purpose of a trip is more important than someone’s income. Speaking from personal experience, I know that if am travelling for work purposes then I am more prepared to pay more than if I travelling for recreational purposes. The key point to note here is that willingness to pay varies greatly depending on the reasons why someone is travelling and while income is likely to play a role (if only for framing their perspective on relative costs), it’s not as straight-forward as the comment above makes out.
- It makes presumptions about how a scheme would operate. As mentioned in some of my earlier posts, the degree to which a time-of-use road pricing scheme impacts on low/high income households depends very much on its design and wider policy decisions about how the resulting revenues are used. If the scheme was designed to be revenue neutral, for example, then the additional revenue could be used to lower fuel excise duties and/or improve public transport – in this way resulting in a situation where low income households were much better off (remembering of course that low income households tend to drive less, especially at peak times, and own less efficient cars – hence they pay more fuel tax per kilometre).
Before I wrap up, I should say that I think the whole time-of-use transport pricing debate could be flipped on its head if it was presented as 1) revenue neutral and 2) linked to lower prices for off-peak travel. In fact, what we should actually be discussing is not “higher peak charges”, but higher peak charges that are used to fund lower off-peak charges.
Finally, some of you may have noted my preference for “time-of-use transport pricing” rather than “time-of-use road pricing”. The reason I prefer the former terminology is that it emphasises the general concept, rather than its specific application. Indeed, very similar arguments apply to the use of public transport: Maybe we should consider charging public transport users more to travel at peak times, with the additional revenue in turn helping to fund lower off-peak travel? I think so.
I live in a parallel transport universe. A universe where zombies make uninformed statements about Auckland’s transport issues, which are subsequently published by well-meaning but clueless mainstream media. The zombies’ strategy is to hypnotise people with absurdity and then proceed to eat a few parts of their brains, after which their haplessly brainless victims stumble out into the world spouting transport nonsense.
Yesterday threw up two delicious brain-eating examples.
The first came courtesy of this rather interesting hour-long series of interview on RadioLive. First off the mark was Patrick (cue Irish accent), who took 10 minutes to deconstruct a few of the myths about Auckland’s transport problems in somewhat humorous fashion.
Hot on Patrick’s dainty little high heels was an almost comical, but unfortunately serious, interview with Simon Lambourne, who apparently is the transport spokesperson from the AA (OMG he gets paid?). In response to a question about whether hovercrafts were the solution to Auckland’s transport problems, Simon replied by saying:
“Yeah well I think this person’s actually onto something. If you look at public transport in Auckland, and we desperately need to look at investing more in public transport than we already do, there’s a lot of attention on buses and trains, but hardly anything on actual ferries. Now if you look at somewhere like Sydney, where they really unleash the potential of their harbour through a great ferry network …”
Let’s follow Simon’s advice and “look” at Sydney’s public transport system. A quick internet search reveals the following (approximate) annual public transport patronage statistics by mode:
- Ferry ~13 million p.a.
- Bus ~200 million p.a.
- Rail ~250 million p.a.
Has Sydney really “unleashed the potential of their harbour through a great ferry network”? Perhaps – if you consider a ferry network that carries approximately 2% of total annual public transport patronage as being “unleashed” (NB: Ferries currently carry about 5% of Auckland’s PT patronage). But this has not been achieved without monumental investment in bus and rail, the very same type of investment that Lambourne is lamenting.
That “boom” you just heard was Simon Lambourne blowing up his own credibility. Seriously though, someone needs to tell Simon that it does not matter how reasonable you try and sound when you’re talking about public transport; if you’re working from blatantly incorrect information then you will always be, well, conspicuously wrong.
Now don’t get me wrong, I quite like ferries. In terms of overall deliciousness they rank just below chocolate ice-cream and puppies. Mmm … delicious.
But as previously discussed in this post, the potential of ferries in Auckland has largely already been tapped; there simply aren’t many craggy peninsulas like Devonport left. In other places where they have been considered, such as Te Atatu, the general conclusion (for good reason) is that ferries will struggle to compete with cars and buses in terms of speed and accessibility and therefor would be an expensive way to grow PT patronage.
And even putting these physical realities to one side does not alter the fact that the maximum potential share of total travel demands that could possibly be met by ferries is really, really small in the scheme of a large city like Auckland. So please don’t let Simon (or Cameron Brewer or Phil Twyford) eat your brain: Ferries are not going to solve Auckland’s transport problems (as the evidence from Sydney demonstrates).
Yesterday was the transport zombie gift that kept on giving. Another example came by way of this op-ed entitled “Strategic car parks part of gridlock solution“. The op-ed itself is not too bad, at least compared to Simon’s effort. The author (Neil Binnie) starts off by making the following claim (emphasis added):
Traffic congestion in Auckland is chronic and deteriorating fast. The comments that follow relate to the North Shore and the Northern Busway but the principles may be applied across the city. One issue that has had little promotion is park and ride.
Little promotion? Well, my 2 seconds of internet searching threw up this AT website, which identifies P&R sites across Auckland. These can be summarised as follows:
- Northern Busway – 1,100 car-parks
- Southern line – ~1,000 car-parks
- Western line – 300 car-parks
- And various ferry P&R sites.
We’ve also discussed P&R at length in this earlier post. One such ferry P&R is at Devonport, which is illustrated below. Here we see some of the most valuable land in New Zealand being occupied solely for P&R. How is this not a scandal? And how can an article on P&R not even mention the value of land?
Let’s look at the example of the Northern Busway in more detail. Here we have 1,100 P&R car-parks. Now if we assume that all these car-parks are occupied by cars that carry 1.2 people each, then these P&R spaces might be expected to generate approximately 1,100 x 1.2 x 2 = 2,750 boardings per day (2.5 boardings per car-park).
At last count the Northern Busway was carrying something like 2.25 million people per year, which is an average of 187,500 people per month or 6,160 per day (it’s likely to be much higher on weekdays). So on the average weekday P&R is able to contribute, at most, 45% (2,750/6,160) of the patronage on the Northern Express. Don’t forget, however, that the NEX is only about one-third of the bus services using the busway. When we consider all the other services using the busway, and their likely patronage, then P&R would seem to generate ~20% of total bus patronage in the corridor.
P&R is not even close to being the most important mode of access.
That’s not all, however. One of the often-overlooked issues with P&R is the degree to which it diverts existing PT passengers. When the Northern Busway, first opened, for example, surveys showed that approximately half of the people using the P&R had previously been catching a local bus from their street. Why is this relevant? Well, it indicates that approximately half of the people using P&R were not new to the PT system. That in turn means that half of the P&R provided on the Northern Busway did not contribute to a net increase in PT patronage.
None of this is mentioned in the article, which prefers to argue that “Passenger numbers on the Northern Expressway [sic] have plateaued because parking options are exhausted.“ The article also ignores that just over a year ago Auckland Transport spent $5.5 million to expand the Albany P&R by 550 spaces. Expanding park and ride in many locations is enormously expensive, because land is expensive. So the question Auckland Transport must try to answer is: Where is it cost-effective to do so? Places like Constellation and Albany generally are not cost effective. Silverdale maybe.
Despite all of these omissions the article then finishes with the following comment:
We are told to use shuttle busses rather than parking at a bus station or dropping family off. In practice the buses are so infrequent that it is not an option. For example, there is a bus every half hour from Albany bus station to Torbay shops. .
A bus every half an hour? That to me sounds like an argument for increasing the frequency of bus connections to busway stations, which indeed is what the draft RPTP has proposed to do. Again, these proposals, their potential costs (the proposed network is broadly cost neutral), and their subsequent effects on PT patronage (and the demand for P&R) does not even warrant a mention in the article.
Some of you may think that likening these people to “brain-eating zombies” is a little harsh on my part. Perhaps.
On the other hand, the people responsible for these pearls of wisdom, namely Simon Lambourne and Neil Binnie, have had the temerity to approach mainstream media offering their personal opinions on potential solutions to Auckland’s transport issues; opinions which can be shown to be demonstrably incorrect, or at least highly uninformed, with just 2 seconds of internet research. That, I’d suggest, is deserving of a lampooning.
It’s nothing personal, but I think it’s important to point out that these zombies don’t know what they’re talking about. Simon definitely should know better – after all he’s paid to know stuff about transport.
Of course ferries and P&R should be part of Auckland’s integrated transport system, but they’re relatively small parts – with the potential to contribute, at a guess, a maximum of 10-15% of total public transport patronage. The bulk of Auckland’s patronage will still occur the way it always has – walk-up passengers to bus and rail services It is these people that we need to focus on – they’re the bulk of our passengers and will be for the foreseeable future.
Indeed, the solutions to Auckland’s public transport issues are quite simple. We just need to 1) build the CRL so we can run higher train frequencies across the whole network; 2) establish a more legible, connected, high-frequency bus network ; and 3) implement a simple and “fair” integrated fare system. These three initiatives will provide quite a lot of “pull”. There’s also a need for a few policy reforms, such as the removal of minimum parking requirements, although these initiatives can bubble quietly along in the background providing a gradual “push” for people to drive less and use alternatives more.
I’m convinced that if we focus on implementing these initiatives, and ignore the noisy zombies with all their absurd ideas about how Auckland would somehow be saved if the city was awash with ferries or P&R or whatever, then we will get quite far, quite fast. We just need to stay the course and get the basics right. I realise that’s not a particularly glamorous message, but I think it’s the right one.