Public transport fare changes next year – will they have unintended consequences?

Most years there’s a public transport price rise. This year it’s a little more complicated – a number of other changes have been announced. The Budget Update delivered on Friday included some tweaks to the fare system.

But they may have an unintended effect on patronage.

Fare increases

A number of changes will be made to public transport fares to ensure continued improvements in service delivery. These include the following.

Public transport fares will increase by CPI plus 2.5 per cent from 2015 to 2018, contributing to ongoing investment in the network.

The rise for 2014 is just CPI, which ABS figures show is 2.2%.

Four CPI plus 2.5 per cent rises in a row means an overall increase of (if my maths is correct) 10.4% in real terms, following CPI plus five per cent rises in 2012 and 2013, originally planned by Labor, but kept by the Coalition.

These new rises will chip away about half of the discount everybody got when forced off single Metcard tickets onto the (bulk price) Myki fares, and will put a zone 1 two-hour full fare (the standard fare for most tram trips, of any distance, even just a couple of stops) up at over $4.

The full price list for 2014 is here. Notable is that the zone 1+2 two hour fare (the “default fare” for metropolitan trains) in 2014 will be $6.06, which is slightly over the $6 cost of a Myki card — assuming this doesn’t rise (it hasn’t been mentioned). This means that for the first time, if you have under 6 cents on your card, it’s cheaper to make a two-zone trip, throw the card away and buy a new one. Not that that’s using the system as intended. Few people would regularly get a balance of such a small amount, and one would hope not many would go through that inconvenience for the sake of a few cents.

Weekend cap increase

The public transport weekend daily fare cap will be adjusted to $6 from 1 January 2014. The current weekend daily cap on all metropolitan public transport travel provides a significant discount to weekend travel compared to the daily weekday fare. An increase to the daily weekend cap to $6 for Zone 1 and 2 travel will better align weekend and weekday fares while still providing value for weekend travellers.

This is a big jump from $3.50 to $6.

There is no separate concession cap; it’s the same $6. That means there’s almost no discount at all for concession travellers who are not using Seniors fares, as the maximum normal fare for them is $6.06. Ditto for zone 1-only full fare travellers, about a dollar’s discount if they travel all day.

The Weekend Saver daily cap (which also applies on public holidays), originally introduced at $2.50 on Sundays only, has been cited as a big factor in increasing weekend patronage.

It will have an interesting effect on event crowds.

For those going to big events (for instance the Showgrounds, football or cricket) on the weekend, the current $3.50 weekend cap effectively means you get a full day’s travel for the price of one trip. Thus currently the price of a trip to the game pays for the trip home as well. This means that if due to crowds you can’t touch-off on the way to the game, or can’t touch-on again on the way home, you’ve paid your way (though the legalities are unclear), and you also are prevented inadvertently paying more than you should.

With a higher cap, a zone 1 traveller arriving at the game who touches-off will be charged the $3.58 one way fare. If they can’t touch-on travelling home, they’ve inadvertently fare evaded.

A Zone 1 concession traveller will want to make sure they touch-off and on correctly, or they may end up paying more than necessary.

Will the authorities try harder (eg install more gates and readers) to get passengers to touch-on and off at major events? It remains to be seen. The Richmond station exit to AAMI Park and the tennis centre, for instance, has very few Myki readers, and last time we were at the Showgrounds (for PAX), barely any were available.

Bye bye to the zone 2 weekend free rides for Passes

It’s only thanks to the low weekend cap fare and a quirk of how Myki calculates fares that Zone 1 Pass holders currently get free rides in Zone 2 on weekends. (Some may recall that at one stage, it was actually giving you money back for travelling further.)

With the weekend cap rising, it’s expected that Zone 1 Pass holders will pay $2.42 extra to travel in zone 2. (The $6 weekend cap minus the $3.58 zone 1 fare.)

This is a removal of a benefit going back to the pre-Metcard paper ticket days, when paper periodical tickets were valid in any zone on weekends (and you could bring your family along for free as well), as a way of encouraging use of the system when spare capacity was available, and rewarding the public transport system’s most loyal customers. Note that due to the pricing, this zone benefit has already disappeared for concession and zone 2-only users.

For all-week travellers, it makes Passes more cost-competitive

Removing most of the discount for weekend/public holiday zone 1 and concession users has the effect of making Passes (which are for consecutive days, and thus include weekends) more cost-effective for passengers who regularly travel more than four days a week.

Previously the Pass price per day for full fare passengers was more than the Weekend Cap, so many would buy 33-day passes to try and avoid paying for weekends (whether or not they intended to travel). I expect many who don’t use public transport on weekends will continue to do that. (More on this from TheMykiUser.)

Two hour fares exactly two hours

Two hour fares will expire exactly two hours after touch on from 1 July 2014. Currently, two hour public transport fares expire two hours from the start of the next full hour. The fare change reduces complexity and is easier to administer than rounding to the start of the next full hour.

“easier to administer”? This sounds highly unlikely given the software has handled it fine since 2009, possibly earlier. Will it mean touch times are a millisecond or two faster?

Given the expiry time was originally whole hours because of limitations with paper tickets, it’s not entirely surprising that they’d do this. Arguably it’s easier to understand.

Will it mean some people wait at the station outside the paid area and all rush to touch-on just as the train arrives? Who knows.

Can you remember that your fare expires at 3:41pm exactly? Since no useful information is provided on the card itself, it’d be nice if the reader software was modified to display it, but I wouldn’t count on it.

Expiry applies to touch-on. It’s important to note that if a fare expires while you’re travelling, you don’t incur another fare if you touch-off at the end of your trip after the expiry time. It’s only the touch-on that needs to be before the expiry to avoid paying another fare.

It also won’t effect you’re trying to finish your trip and your train is late, as long as you touched-on before the expiry time.

But it will have an effect on people who want to watch their pennies and do short two-way trips, perhaps down to the shops or doctor and so on.

It’s worth noting that once upon a time, all zones had three hour fares, in other words between 3:00 hours and 3:59. This was switched back to two hours in 1993.

The after 6pm benefit?. At present fares that start after 6pm last until 3am. At this stage it’s not clear if this is staying. The PTV web site mentions it only in the context of paper tickets used in regional towns. Update 8/8/2014 — This is confirmed as staying.

Earlybird

Rumours flying around suggested the Earlybird fare (free train rides before 7am on weekdays) was to have been scrapped from January 2014.

This did not eventuate, but other rumours suggest it would happen in 2015 instead. It might explain why the fare changes are expected to increase revenue by just $21.1 million in 2014-15, but $46.4 million in 2015-16. (Budget Update page 130)

That’ll be one to watch, as if it happens, it could have a big effect on peak hour train demand.

Conclusion

It’s difficult to see where they’re coming from with the changes for 2014, other than they seem to be aiming to try to increase revenue and improve cost recovery.

But is increasing prices the only way to do that? And does it risk reducing patronage, and end up not actually increasing revenue?

In recent years with very cheap weekend caps and other initiatives, there was clearly an aim to increase patronage, particularly at times when there was spare capacity on the system. Perhaps it was “too successful”, with weekend train crowding triggering ten minute services on the busiest lines.

But isn’t that a good situation to be in? More people travelling more efficiently on public transport instead of driving, leading to more services (read: better use of our substantial infrastructure), leading to more passengers?

Perhaps $3.50 was too cheap, but it did mean that taking a family group out on the weekend (another benefit previously given to periodical holders) was cost-competitive with driving. A more saleable plan would have been to bump it to say $4.50, then have it creep up, accompanied by well-publicised service upgrades, for instance more lines going to every ten minutes.

And the two hour thing? Well that’ll have little effect on 9-5 commuters, but may hit the less well-off hardest.

Overall it remains to be seen what effect this package of changes will have on patronage, particularly on weekends.

And it’ll be interesting to see what Labor says about all this. Will they reverse any of this? So far they seem to be non-committal.

Update 26/3/2014: Two-zone fares to be capped to one zone; free tram rides in CBD.