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By Mr Anderson, on January 22nd, 2013 For most of the last year we have found ourselves somewhat puzzled by the stalling and even declines experienced by rail patronage in particular – but more recently general public transport patronage. This can be seen in the dip in 12 month rolling patronage totals up to November last year:
Auckland Transport have provided a multitude of excuses for the patronage dip over the past few months – some more plausible than others (they blamed the World Cup for some of the declines in August and November, even though the World Cup was only in September & October 2011). Some of the decline may be due to higher rail fare evasion than we think (anecdotal evidence on this is pretty strong) but I wonder whether public transport fares are really starting to hurt some people and put them off catching the bus, train or ferry. With inflation at near-zero, wage growth stagnant seemingly forever and petrol prices still below the peaks of a few years back the fare increases for rail in particular over the past few years may be starting to bite.
A benchmarking study of public transport in Auckland and a number of comparator cities prepared a couple of years ago highlighted that Auckland’s PT fares – on a per kilometre basis – were higher than all other cities analysed: Yes, the graph does show that Auckland’s fares are on average around twice those of the Australian cities and much higher than Wellington’s. This is despite (or perhaps a cause of) Auckland generally having one of the poorest and least used systems when compared to these other cities.
There are lots of ways that we can improve our fare system, like the introduction of free transfers, zone-based fares, greater incentives for people to use the Hop Card, pricing differentials between peak and off-peak, better deals for monthly pass holders and so forth. Those are all great, but I wonder whether they miss the fundamental point of still assuming the same general level of contribution by users to the cost of public transport provision. Certainly Auckland’s farebox recovery rate (which has increased to about 43% from what’s shown below which was in the benchmarking study referred to above) is certainly higher than a lot of Australian cities: Fortunately a lot of work has gone into creating a more efficient PT network over the last while, with the new bus network likely to generate a lot more patronage without extra service requirements. Hopefully the PTOM contracting system will also generate cost efficiencies. This work should hopefully mean that the public money spent on public transport is being utilised far more efficiently than in the past – effectively we are getting more bang for our buck.
But the next question is around how to use those savings – to reinvest in extra service, to bank the savings or perhaps to lower some fares? I’ve wondered for a while whether the strategic lowering of certain fares would generate a big patronage gain and the benefits which arise from more patronage would easily outweigh the revenue foregone in the lower fares. There are a number of ways this could happen:
- The lower fares could end up with more passengers paying and theoretically this could mean more revenue overall. Generally patronage is seen to be relatively inelastic to price (though this varies hugely for different trips) so ending up with more overall revenue is relatively unlikely.
- The patronage gain could generate significant external benefits, such as in the form of decongestion benefits – which for rail are particularly significant at around $17 per peak time passenger.
- Lower fares could mean that some people end up ditching their family’s second car and shifting to the bus or train as it’s now clear that catching PT makes financial sense to them. As many of the costs of car ownership are relatively hidden (e.g. depreciation) they may end up in a much better financial position in the longer run.
There are lots of messy details to work through around the most effective way to target fares to maximise benefits created and that’s not really the intention of my post. I guess I’m just interested in understanding whether we’d be better off if PT fares were a bit lower generally – certainly a lot of other cities seem to think so.
By Mr Anderson, on December 15th, 2012 The November patronage statistics highlight that the dip in rail use continues. Like September and October, when the Rugby World Cup last year made comparisons a bit silly, in November there’s a reasonable explanation for the dip: the transition to use of the AT Hop card means that trips are no longer counted at the time of purchase (for 10 ride tickets) but instead at the time the trip is actually made. According to Auckland Transport this change accounts for most, but not all, of the decline in patronage compared to November 2011.
Another reason for the decline is likely to be an increase in rail fare evasion. Throughout this whole year there has been a lot of anecdotal evidence that rail evasion has become absolutely rife. I know that I took a trip from New Lynn to Henderson a few months back and never saw a single staff member enter our carriage the whole time.
Introduction of the AT Hop card has improved matters in some respects, but also made things worse in other ways. For trips to or from Britomart and Newmarket, the installation of ticket gates is likely to have all but eliminated fare evasion – however elsewhere on the network the ability of people to skip either tagging on or tagging off at the posts seems pretty high. Especially as even if you’re caught, the worst thing that can happen is getting turfed off the train.
I think there are two kinds of fare evaders:
- Those who are determined to evade their fares and probably wouldn’t ride the train if they had to pay.
- Those who are happy to pay for their fare but don’t exactly go out of their way to do so and therefore often end up avoiding paying even if it wasn’t fully intended.
I’d say the second group are by far the most common.
Overseas cities have come up with some pretty clever tactics to minimise the likelihood of fare evasion. Firstly, there is the threat of fairly hefty fines for those caught without the correct fare – something I understand Auckland Transport is working with the Ministry of Transport to change a few laws so a similar system can be introduced here. The second is a bit more subtle but creates a sub-conscious mindset of needing to do the right thing by paying your fare – perhaps best illustrated by the establishment of clear “fare paid zones”. Here’s an example from Vancouver: To walk past this point without having paid your fare requires a pretty active and deliberate decision to be made. In London there are similar set-ups, but with the tag posts right at this point and often supported by CCTV to check that people really are tagging on or off with their Oyster Cards.
Any system will generally have some level of fare evasion and that’s probably OK because it costs more to go after that last 1-2% of riders compared to the fare revenue actually lost. However it seems that Auckland’s rail system suffers from fare evasion levels far far higher than this, which is not only impacting on the revenue raised (which is predominantly lost money for Auckland Transport rather than Veolia) but also meaning that our patronage statistics might in reality be a lot better than they’re looking.
A few simple changes to station entrances like what’s been done in Vancouver, plus hurrying up law changes required to enable fare evaders to be fined, seem like pretty simple ways to significantly reduce fare evasion and potentially boost patronage numbers quite substantially. Auckland Transport had better get on with it, because the way things are looking hey aren’t going to get near their Statement of Intent patronage targets.
By Peter M, on October 15th, 2012 One of the most discussed parts of the draft Regional Public Transport Plan seems to have turned out to be the proposed fare zone map. My fellow bloggers Mr Anderson and Stu Donovan discussed the zones in previous posts, while today’s NZ Herald also quotes Labour MP Phil Twyford’s criticism of the proposed boundaries.
A draft published by Auckland Transport for public discussion shows eight travel zones proposed for introduction between the middle of next year and the end of 2014.
Unless the plan is radically overhauled after submissions on the regional public transport plan close on November 5, passengers will be able to travel to central Auckland from as far north as Long Bay for a two-zone fare, at a price yet to be determined.
But it will cost a three-zone fare to travel from anywhere west of New Lynn or south of Onehunga or Otahuhu, despite New Lynn and Onehunga being 10km from the city centre, compared with 20km from Long Bay to downtown.
Mr Twyford, Labour’s transport spokesman, said that was blatantly unfair on low-income working families in his area and South Auckland who relied on public transport.
“It looks like the public transport map for Alabama, 1955.
“The parts of West Auckland I represent are probably the worst served by public transport of any area in Auckland City. I don’t believe they should be disadvantaged in this way.”
Mr Twyford’s analogy is a bit excessive, but looking at the zone map he does have a bit of a point about the North Shore doing unreasonably well out of the proposed boundaries: Long Bay, Kumeu, Whitford and Manukau all roughly fall about 20 kilometres from downtown. Yet the zones they fall within are very very different:
- A trip from Long Bay to the city would only be two zones
- A trip from Whitford or Kumeu to the city would be four zones
- A trip from Manukau to the city would be three zones
The other anomaly in the zone map is, I think, the huge southern zone. Does it really make sense for trips between Mangere and the city (barely 10km) to be charged the same as a trip from Drury to the city (over 30km)? I don’t really think so. While huge zones have a potential advantage in that you can take quite a long trip for the price of a single zone, they will inevitably mean a fairly high price per zone travelled through. With the large zones above I can’t see this system stacking up with prices of much lower than $2.50 for each zone you travel through – which would mean some pretty whopping costs for people outside the isthmus to the west and the south. Smaller zones seem likely to result in a lower charge “per zone” and therefore probably less change from the current fare levels.
For a start, let’s split that northern zone into an upper and a lower zone. For simplicity’s sake let’s just use the current boundary for the Northern Pass: 
The logical place to split the southern boundary is at Manukau City, with a bit of a “grey boundary” across a band east and west of there to ensure short trips don’t fall into the cost of a two zone ticket.
That leaves us with something like this:
There would be some other implications for outer areas:
- The outer north would fall into the same zone as the outer west as both would be 4 zones from the city. This cleans up a fairly odd anomaly in the current maps.
- Whitford and Maraetai would probably fall into the “four zones from city” zone along with Manurewa, Papakura etc.
- Pukekohe would probably now be five zones from the city, which makes sense as it’s similar in distance from the city as Warkworth (which actually gets a bus service in the RPTP and also would sensibly be five zones from the city)
I think that altogether this would make for a fairer system and probably result in lower “per zone” fare charges and less change from current fare levels. The only other possible question is whether the isthmus should be split into an eastern zone and a western zone to further lower the cost of each zone’s travel.
By Mr Anderson, on October 5th, 2012 One of the most interesting piece of information in the Draft Regional Public Transport Plan – along with the fabulous new bus network – is a first look at the possible zone boundaries for Auckland’s new integrated fares system. This is shown in the map below:
Setting zone boundaries and coming up with the preferred number of zones must be one heck of a difficult task as there are so many things to balance:
- The fewer zones you have, the easier the system is to understand
- The more zones you have, the less likely fares will change much from their current level and the lower chances there are of massive arbitrary jumps in fares
- The lower the fare is for each zone, the less farebox recovery there will be
- The higher the fare is, the more people who will be put off catching PT by the cost
Auckland does have the advantage of a natural geography which splits the city relatively neatly into different parts. The west, south and east of the isthmus all touch pretty close to a 10 kilometre radius from the city centre – forming a natural boundary between a second a third fare zone.
Probably the thing which stands out the most in the draft zone map is how the upper North Shore falls within an area two zones from the city, even though it’s well beyond the 10 km radius from downtown. While that’s a great deal for those people, that seems as though it would be likely to come at the cost of higher fares for everyone else. A similar argument could be made for the southern part of the south zone – although there’s potentially a more valid socio-economic argument for trying to keep that area within a three-zone ride of the city. We get a few weird outcomes from what’s proposed:
- Should Orewa really be the same number of zones from the city as Mangere?
- Should Albany really be the same number of zones from the city as Pt Chevalier or Orakei?
- Should the south zone really be quite so massive – Bucklands Beach to Papakura all within one zone seems potentially a little bit generous?
As I said, getting the zones right is an almost impossible task and there will always be winners and losers. I think most of the proposed zone map makes excellent sense (a city zone, an isthmus zone, a west zone etc.) just there are a few little changes that could probably make it a bit fairer.
By Matt L, on September 11th, 2012 At Transport Committee last week we finally got some more detail on both the new bus network but also finally hearing some information about integrated fares. There has been some talk about this already in the media but we deliberately held off discussing it so that we could provide you with some pictures from the presentations shown at the meeting. How AT want us to use the PT network is going to change dramatically in the next few years, this is mainly being driven by the new bus network that is expected to roll out over the next few years. One of the key features is a number of key, high frequency routes that will have buses running at least every 15 minutes for almost all of the day, 7 days a week along with a number of other supporting routes. These are being designed to form a network and much more emphasis will be put on transferring to get to a final destination. In many ways it will work in the same kind of way that things like metro systems overseas do e.g. the Paris Metro. What’s even more amazing is that everything is being down with the same number of resources, including the amount km’s travelled, as exist today so it means no increase to the amount of subsidies we have to provide (we first saw information of this new network back in April).
First here is a system diagram of what is known as the Frequent Transit Network (FTN) )
Having the FTN network services running at a minimum of one every 15 minutes, even on Sunday Morning, will revolutionise public transport use in Auckland. The only experimentation we have had with higher frequency routes has been the B Lines along Dominion Rd and Mt Eden Rd. Their introduction saw patronage increases of up to 20% just from the improving the marketing yet even they don’t currently meet the criteria for the FTN network due to the lack of evening and weekend services. Most of those routes will likely also have additional services during peak times so the 15 minute timeframe is just the minimum they will be.
Below the FTN network there is a secondary network running on the same principles but at a lower minimum frequency of at least one every 30 minutes (again they will likely be much more frequent in peak times). Together they form the all day network and in future it is likely that some of these secondary routes will be moved up into the FTN as demand for them grows. Both networks are shown below with blue being the FTN and green the secondary network.
But wait there’s more, in addition to the all day network there will be other routes that will run just at peak times to places like industrial areas where there isn’t the all day demand as well as other routes to those hard to get to places but that only run every now and then. Personally I think that this new network is great (and that’s not just because some of my fellow bloggers have been involved). It is a huge effort to redesign our entire bus network but something that has long been overdue and while there are bound to be a few teething problems as people get used to something new, over time this new network will profoundly change the city for the better.
Moving to this kind of system though creates a problem in a different area, our current fare structure. It works against kind of system as you have to pay a full new fare for every trip you make which means it costs you to transfer. To address this, Auckland Transport has started work on looking at integrated fares (It is important to note that integrated fares are similar but different from integrated ticketing). Integrated fares can come in a variety of flavours but the two looked at in the presentation are distance based fares where you pay for the exact distance you travel, or Zonal based where you have unlimited travel within a time period for the zones that you pay for. The committee accepted the recommendation to go with a zonal based system and Auckland Transport have been investigating this behind the scenes to model the impact it would have.
The closest we got to seeing what the zones may look like was from a presentation that Auckland Transport wanted to give to the committee confidentially however the councillors ruled that it had to be done in public. The screenshot is taken from recording of the meeting so is a little blurry unfortunately but you can see the zones that are being thought about which mainly seem to follow the old council boundaries with the exception of a separate one for the central city.
These two projects, along with our new electric trains will really transform PT in Auckland so there are some really exciting times ahead.
By Guest Post, on August 30th, 2012 This is a Guest Post by Louis Mayo and follows on from this previous post about Wellington’s PT fare review
Following on from the discussion on the previous post I thought I’d propose a scheme that, in my opinion, would make for an excellent and ‘world class’ fare structure.
Number of zones:
There would be four zones:
- Blue: Covering the entire Wellington City area & the northern suburbs.
- Red: Covering Hutt, Porirua and as far north as Pukerua bay & Upper Hutt
- Green: Covering Kapati as far north as Waikanae and South Wairarapa as far north as Greytown.
- Yellow: Covering everywhere further north to Levin and Masterton. Does expand into the area of Horizon’s council but it seemed fair to have a reasonably straight line west from Masterton.
I have prepared a map showing indicative zones:
The gaps in between the colours are the ‘overlap’ areas. You can view a zoomed in version here.
I have decided to go for the option of having a smaller number of larger sized zones. Zones are combined into to new zones at a ratio of around 1:3.5. It will mean that each zone can have its own dedicated colour (I personally can’t think of 14 different colours!) This has a number of advantages such as simplicity and easier to understand and also encourages people to use PT to make multiple transfers because they have a larger area for them to do so.
There is obviously a disadvantage with using zone based systems. For example person A could be going just across the zone boundary and end up being stung with a high fare for an extra zone even if they were only going a few stops. Meanwhile person B could make a much longer trip from one end of the boundary and only pay a one zone fare
There are two ways that this can be partially resolved. One is by having zones ‘overlap’ at each other (i.e some stops would be in two zones). My, very crude,”measurements indicate that both zones red and blue are around 15-16 kilometres long end to end “as the crow flies”, and the overlaps I have measured at around 4 kilometres long between blue & red and red & green and 6km between green & yellow zones. Obviously this does not solve the entire problem and there will be some that still end up paying more than what may be deemed equitable.
The other way is by having clear geographical marks to establish the cut off points. An example of how this could work is on the Kapati line – almost all PT users heading into Wellington will be on the train. There is a long distance between Takapu Road and Wellington so this works as a natural zone boundary. The good thing about having larger zones is that there are only issues drawing lines at three boundaries rather than at thirteen different boundaries as there currently is.
Paper tickets:
Paper tickets would be paid for in cash and purchased on-board a bus from the driver or from a vending machine or from staffed ticket booths (major stations only). There is the possibility of having tickets that are sold on-board buses to be “no change given” as used in many overseas cities. This will speed up boarding times but I do worry a little about this that it may put off some people. If I was an inexperienced, first time user of the system and handed over a $10 note expecting $6.50 change and not getting it then I’d be pretty annoyed. It is an issue that makes for a very interesting discussion.
Vending machines and counters will have cash and EFTPOS and would be located at every train, cable car and ferry stop on the network, but you could also roll this out major bus stops, which would facilitate faster boarding times. But this has the potential for fare evasion. Currently the bus driver acts as a reasonable barrier against it so GWRC would need to employ random ticket inspections (as per below) on buses as well which will increase costs.
The paper ticket would have the zone and expiry time clearly printed on the ticket. No tickets will be sold onboard trains and all passengers must have a ticket before boarding and must retain it for the entire journey.
Smart cards:
Smart cards should be an RFID system similar to Snapper, but hopefully a lot ‘smarter’. Internet top ups (without needing to pay a horrific $40 for a USB card reader) will be available as well as the facility to have the card directly linked to a bank account for automatic topping up, two features that Snapper lacks at present. I envisage that most regular users would be on smart cards as the discounts and the benefits of not carrying cash would pay for itself over time.
The ideal would be a single smart card that works across Auckland and Wellington, and potentially other cities as well. Not sure what the chances of achieving this are, but dreams are free. Surely there must be advantages from economies of scale to be gained from using the Thales system after it has been installed in Auckland?
Time based ticketing:
All fares would be time based – more like a ‘subscription’ to the chosen zones rather than just a single trip. I propose offering two hour and daily time periods. I personally see nothing wrong with people using two hour passes to make a return journey if it is within the two hour window.
In addition for smart card users there would be weekly and monthly ‘fare caps’, i.e once you reach that cap over that week / month then you can receive free travel over that / those zone/s for the remainder of the week / month.
Concession fares:
The following people will pay discounted fares at all times:
●All people under 20 years of age.
●Tertiary students
●Senior citizens
●Beneficiaries / very low income earners.
Photo I.D would need to be carried at all times to qualify for concession fares. Children should travel free when travelling with an adult during off peak hours in order to make transport more affordable for families and will further incentivise off peak travel.
Off peak fares:
All people would receive discounted fares during the off peak hours. These would be 10am-2.30pm (deliberately set to end before the after school period) and after 7pm during weekdays as well as all day weekends and public holidays (and potentially for contra-peak journeys as well) This provides an incentive for people to choose other times of the day to travel and will help manage crowds during peak hours. Free travel for senior citizens off peak would continue.
Price of fares:
Suggested fare prices are shown in the tables below. A one zone fare is set at the price of what is currently a two zone fare, but would give you the equivalent of around three zones worth of travel which does mean that there is some cross subsidisation to longer trips from shorter trips. The reasoning is that PT is less likely to be competing with walking and cycling for shorter trips and more likely to compete with car travel for long trips and also because longer trips end up getting very expensive without some cross subsidisation and I would say that the marginal cost of providing for longer distance trips is lower.
To incentivise smart card usage, a 20% discount is offered. Weekly fares are set at day fare x 4.5 and monthly fares at weekly x 3.5. As it is an electronic transaction, fares do not need to be in fifty cent multiples. Prices are as below: 
There is again a disadvantage with the larger zones. The jump between a one zone and a two zone fare is quite large from $3.50 to $6. The next increases are not so bad.
I think these fares are realistic, as much as I’d like to have cheaper fares I am wary that budgets are at considerable strain and there is not really the scope to be charging lower fares. Although for some there will definitely be an initial shock of what appears to be a fare hike. But over time most will change their behaviour and get better value for money. For example someone making a one zone commute into work may be shocked to find their fare has increased from $2 to $3.50. But over time they will find that they can get a smart card and travel off peak and only pay $1.60 and might find that they can use the network to go for a meeting in another part of the city and avoid an expensive taxi fare.
Fare evasion:
Wellington (central) train station is easily gated. Due to the heavily radial structure of the network, most train travellers will hit the gates at Wellington, but it would be good to see some of the other busier stations to be gated as well in the longer run. Lambton cable car station already has gates which would simply need to be adapted for the new system. There is no reason why gates could not be rolled out busy bus stops as well.
I had assumed that all gated stations would need to be staffed. Stuart, however, informs me that Amsterdam have a system where people trying to exit without a ticket can press a button and the gate will open but they will be recorded on camera. I had envisaged that there would need to be staff to help people in wheelchairs, etc to get through the gates and stop the odd dunce from trying to jump over the gates. Wellington actually has quite a few staffed stations, Porirua and Waterloo I know but I think there are a few others as well. Inspections will have to be carried out regularly and officers would need to have the power to issue infringement notices as just forcing people to pay the fare will not be enough.
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I feel this system would provide a convenient and easy policy that has many advantages. There are definitely disadvantages but they are outweighed by the positives in my personal opinion. Please do comment as there is important and very interesting discussion to be had and I’m very interested in the opinions of others on this matter.
I remind you again to go to www.farereview.co.nz and fill out a quick survey (takes 5 minutes) or attach a document of a longer submission – 14th September is the closing date. The criticisms I have of the survey are that it doesn’t address transfers and they have some auto system that pre judges your survey answers before you submit.
By Guest Post, on August 11th, 2012 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):
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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.
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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.
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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:
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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.
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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.
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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.
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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!
By Matt L, on July 27th, 2012  Auckland Transport and Veolia, we need to have a little chat about a really important part of public transport, collecting fares. Unlike roads which a lot of people seem to think are free, on public transport people expect to have to pay a fare. I’m sure I don’t need to mention that collection of fares is of course really important as the more money collected means the less services need to be subsidised. The problem though is on the rail network there appear to be a huge amounts of fares that are going uncollected, this is for a number of reasons which I will explain below:
The Book Reader
There are a number of well known tricks that people will use to evade paying a fare, the most common of these is pretending to have already hopped on the train earlier in often involves things like staring out a window or reading book. The biggest culprits seem to be high school kids and I was having a conversation with a fellow passenger just the other day who remarked she had seen one group of kids cheering that they were up to 7 days without having had to present a ticket. Of course it isn’t just school kids and I have seen people of all ages do this.
The ExpiredPass Holder
Another common trick is to present expired monthly passes and this works because the on board staff often don’t check the exact details on each pass. I actually did a test of this about a month ago, I my monthly pass had just expired and I still had it in my wallet with my new one (that was valid). What I did was just present my old pass just to see how long it would take to be picked up however after a week I gave up.
The Short Changer
Another really common method to avoid fares has been to simply not pay for the full journey. On the Western line at least, staff are generally pretty good at questioning people if they try to pay for a fare that won’t reach Britomart but on the way home this isn’t so easy to police. Just the other day I saw a lady in her late 50′s/early 60′s do just this by paying for a two stage ticket but riding for four stages.
Another trick for this group is to combine a monthly pass with a ten trip ticket. In these cases the person will get on at a station that is four stages from Britomart and present a single trip ticket at the same time as a monthly pass which is designed to get them between New Lynn and Britomart. Now of course this is a valid thing to do however I am almost certain that these people don’t present their single stage ticket on the way home
The Sardine
This last group aren’t actually deliberately fare evading but still are not paying. This is because our peak trains are full and there are simply too many people for staff to get through the carriages and collect tickets. In the past this would have resulted from isolated incidents like service failures but it is now happening on a daily basis. Out west trains are often full by New Lynn which means a lot of people are getting free trips.
All of these reasons (plus probably a few others) behind my view that fare collection on trains has not been as good as it should. I also wonder if this is partly behind the slump in patronage which is based partly on the number of ticket sales. Either way Auckland Transport and Veolia need to do something about this as for one I get really annoyed at having to pay for my journey while hundreds of others get free journeys. I have heard suggestions that Veolia may look to moving onboard staff to the platforms to either collect tickets or ensure people buy paper ones from the new machines but there doesn’t seem to be any solid information as to when that will happen.
Now of course Integrated ticketing is coming at some point in the future and will address some of the issues raised above but not all of them. It will also create a few new challenges that will need to be addressed but what is clear to me is that we can’t carry on as they have been.
Completely unplanned, it seems this issue was raised in the herald today:
A lobby group is urging Auckland Transport to consider a partial rollout of its Hop card by November 30, if only to stem lost revenue from fare evaders on trains
By Peter M, on April 16th, 2012 Fare rises are inevitable, but never particularly welcome. Auckland Transport has just announced that most rail fares and some bus and ferry fares and to increase from April 29th. Here are some of the details:
Auckland Transport said today it has completed its annual review of bus, ferry and train fares.
The review is based primarily on recovery of cost increases including fuel and labour, and equalising the cost of travel for bus and train users.
Auckland Transport’s Manager, Public Transport Operations, Mark Lambert says, “In general fares have not kept pace with cost increases over time.
“As a result of this year’s review, some bus and ferry fares and most rail fares will increase between 10 cents and 90 cents but many fares remain the same.
“For a number of years train users have enjoyed significantly lower fares than bus users. We now have 2,000 train services a week, the rail network and facilities have been substantially upgraded including the first phase of the Manukau train station which opened for service yesterday.
“This year’s increase in rail fares removes that inequity with bus and simplifies the fare structure prior to the full introduction of HOP near the end of this year.
“In the ferry sector many fares will remain unchanged and fares for similar journey lengths on different routes will be closer aligned.
“In the tertiary sector, the 40% discount currently in place is not sustainable for operators or the ratepayer. This is being reduced to 38% which remains significantly greater than the 20% that was in place in 2008”.
Mr Lambert says, “Public transport fares remain heavily subsidised through Auckland Transport and government agencies such as NZTA. Public transport continues to offer good value for money against petrol prices and the full cost of car ownership”.
Details of the new fares are here. The way in which fares have been increased is quite interesting, with the biggest change being the alignment of bus fares with rail fares for non-monthly passes. With the shift to integrated ticketing this was inevitable, and also has a lot of logic: why would rail fares be different to bus fares for roughly the same journey?
However, while that’s a sensible and logical change, a less logical part of the fare increase is that once again it seems that monthly pass users are being unduly picked on – they’re just about the only ones who see their bus fares go up, for example: So most monthly pass holders suffer 7-8% fare increases while cash fares for single trips don’t change. That’s not exactly rewarding our best customers is it?
As Matt’s recent post outlined, we need to get a lot smarter about how we structure our fare system – not just keep increasing the complex myriad of fare products by a certain illogical percentage every once in a while. Yet again, this fare review is a missed opportunity to do just that.
By Matt L, on March 28th, 2012 In public transport circles there is always going to be a lot of debate over the levels of fares. Should they be higher to reduce the amount of subsidy required? Should they be lower to encourage greater ridership and/or for social equity reasons? Should it be free to eliminate the costs of collection and to truly incentivise PT use? Through the PT benchmark study undertaken last year, we learned that Auckland’s public transport fares are relatively high – while NZTA’s farebox recovery policy seems likely to raise fares even higher in the longer term as it seeks to reach a 50% farebox recovery ratio (the proportion of operating costs paid for through fares).
The table below is from the benchmark study and highlights Auckland’s high fares on a per passenger kilometre basis:
The extent to which we generally raise fares in the future is largely a political decision around how much we wish to subsidise public transport because of its external benefits like congestion reduction, environmental gains and support for desirable land-use outcomes. Lower fares may also raise patronage so much that the revenue loss from each individual ride is made up for through an increase in the number of riders overall – although that will largely depend on when and where those riders are added to the system and whether they require expensive additional services and/or infrastructure.
What I’m more interested in is exploring ways in which we might fiddle around with the level of our fares on a cost-neutral basis so that its structure contributes more to where we want public transport heading to. There are a few relevant matters here:
- The extent to which longer trips should be more expensive than shorter trips
- The level of discount we give to unlimited trip passes (daily, weekly & monthly)
- Whether (and to what extent) we discount travel that takes place outside peak times
Charging more for longer trips
Starting first with comparing fares for long trips with those for shorter trips, it certainly seems as though Auckland’s fare structure starts very low and increases quite dramatically when compared to other fare structures around the world. Going by the cash fares for buses, we have a single stage costing $1.80 heading right up to 8 stages costing $10.30. In contrast, Vancouver’s base fare is $2.50 for travel with Zone 1 (including free transfers) and increases to a maximum fare of $5.00 for travel within all three zones (with a single intermediary step of $3.75 for travel within 2 zones).
In some respects, charging more for longer trips in a proportionate ways makes sense – as longer trips require more service kilometres, which comes at a cost. The rider is also gaining a greater benefit from the longer trip themselves, so there’s also likely to be a willingness to pay a higher fare. But on the other hand, there are actually some compelling reasons why we might want to reward longer trips by not charging such a high fare – after all, longer trips generate greater congestion reduction benefits while buses and trains have to complete the whole run anyway, so the extra passenger riding further doesn’t add a marginal cost (although obviously longer routes are much more expensive to run, but that might be a network design issue more than anything else).
My feeling is that, out of the three issues with our current fare structure, this is the one least likely to need significant change – but in the long run as we shift to a zone based fare system, reducing the number of zones and flattening the cost difference between shorter and longer trips, might be a smart thing to do – to help encourage those longer trips onto public transport and get them off the road.
Discounts
The second matter I think our fares need to be smarter around relates to the level of discount we give to unlimited trip passes, be they daily, weekly or monthly passes. When looking at this issue I tend to think that a fundamental decision should be made around trying to attract as many of our public transport customers as is possible to be using weekly or monthly tickets. People with such tickets will obviously try to get the best value from them, so will be regular and frequent users of PT – and they should be rewarded for doing so. Not only do they pay for their travel ‘up front’, but they are also likely to become regular users of off-peak, evening and weekend services – as those trips will effectively be ‘free’ to them (as generally people budget for a monthly pass on their weekday travel requirements).
In some parts of the city monthly unlimited passes work well but in other parts they aren’t effective at all. If we take the price of monthly rail passes in Auckland, there are two available.
- A ‘City Monthly’ which is unlimited travel on the network between New Lynn, Onehunga and Otahuhu. This is equivalent to a 3 stage journey.
- An ‘All Zones Monthly’ which extends that travel out to Waitakere and Papakura. This is equivalent to a 6 stage journey
The table bellows shows what the costs for each of the passes cost and the number of trips you would need to take break even for the passes vs the cash or 10 trip fare. As you can see the number of trips you would need to take if you were within a 1 stage area just wouldn’t make a monthly pass viable. By comparison if you live in a 5 stage zone like I do you need to take just 28 trips (or 14 workdays) to have been better off.
Part of the problem though is these passes are only useful for people going through town, people going from say Morningside to Henderson on a regular basis would only really be able to use cash or 10 trip fares so miss out on the benefits of monthly passes. This suggests that we need to rethink the cost and conditions of our monthly passes so that they are more useful for a greater proportion of the population. Switching to a zone-based system could mean a wider variety of monthly passes being available (a pass for 1 zone, 2 zones etc.) while generally if we are to look at anywhere in our fare system where we want to decrease the cost of fares, I think monthly passes would be the place to start. Let’s reward our best customers with a good deal.
Peak vs Off peak Pricing
Finally, we get to that vexed question of whether there should be a price differential between peak and off-peak travel. On the negative side first, it obviously adds some complexity to our fare system – at the very time we’re trying to simplify it and make public transport easier to understand. There’s also the issue of matching up this shift with a greater focus on monthly passes – as it seems unlikely most people would want their monthly pass restricted to off-peak travel only. The ability to just jump on anything, anytime, is a great attribute of having an unlimited travel pass. The other possible downside of peak pricing is that it is our peak time PT users who create the greatest congestion relief benefits for road-users, so it could come across as a bit counter-productive to charge highest fares for those people who are easing congestion the most.
But on the plus side, there is a lot of sense in having a price difference between peak and off-peak travel for a number of reasons. The most obvious is so that we can use our system more efficiently, flattening out the ‘peaks’ of demand and therefore being able to carry a lot more passengers without the need for extra buses, trains or PT infrastructure (or, more realistically, the need for proportionately less additional buses, trains or PT infrastructure). Getting an extra bus on the road at peak times, for example, is always going to be pretty expensive – because you need to be buying more buses, hiring more drivers and probably running more empty service kilometres (repositioning after that peak run).
Auckland’s PT situation, where we want to grow patronage significantly in the near future, but we don’t have the money to spend a huge amount on PT services and infrastructure (largely because of Central Government’s squeeze on funding) means that ‘flattening’ demand and getting a lot more out of our existing system is likely to be necessary. There are other ways we can do that to just ‘peak pricing’, such as providing a better quality of service throughout the day, but I think that creating a price discount for off-peak travel to reflect the lower cost of providing extra off-peak service, is something that Auckland will need to look long and hard at.
So I think we could be much smarter about public transport fares. Hopefully these issues will be looked at as Auckland Transport focuses on implementing integrated fares to go with the integrated ticketing we’ll have finished by the end of this year. Also one positive is that we haven’t actually had a fare increase for about 2 years, hopefully the huge increases in patronage in the last few years are helping to reduce the need for them.
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