Public Transport charges

February 26th, 2013 at 10:00 am by David Farrar

Michael Forbes at Dom Post reports:

A reduction in the discount traditionally enjoyed by those who pre-pay for their is being proposed by Greater Regional Council officers.

The 2013-14 draft Annual Plan, which will be tabled at a council meeting today, also floats an average rates increase of 2.6 per cent.

Bus and train operators are required to offer a minimum 20 per cent discount on multi-trip tickets and stored value cards.

But changes being proposed by council officers would see that reduced to 17 per cent in zone 1 – an area of heavy public transport usage encompassing the Wellington CBD, Aro Valley and Thorndon.

That would be a silly decision.

If you look at successful public transport programmes overseas, one of the keys is to get almost everyone using cards such as Snapper. In London, almost no one buys tickets for single trips. They all have Oyster cards.

The key to getting everyone onto prepay cards is to have massive discounts on them (ie it is too expensive not to have one) and to have a daily limit on them.

Wellington should move to integrated ticketing, and increase the price difference between pre-paid cards and cash tickets.

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14 Responses to “Public Transport charges”

  1. Carlos (683 comments) says:

    I agree DPF. In Beijing a few years ago they dropped the price of a bus trip from 2.00 RMB down to 0.40 RMB for those with cards, but didn’t reduce the cash fare at all. The result was that there were massive queues for people wanting to use buses. :)

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  2. campit (467 comments) says:

    Yep agree. And if there is excess capacity at off peak times then price tickets cheaper for off-peak travel as well.

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  3. david (2,557 comments) says:

    It is going back a bit but about 20 years ago the second largest “bank” in Japan was Japan Rail. The value of prepaid cards on issue amounted to billions of dollars and of course they knew that a fair bunch ( cards lost and cards discarded with minor balances) would never get cashed for value. What I’m getting at is that the issuer has the ability to use the prepaid funds as revenue generating assets in their own right which makes them either very profitable or able to offer further discounts (or both).

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  4. campit (467 comments) says:

    Wellington could do with some integrated ticketing as well for group travel. For trains the Group Rover ticket is $40 for up to four people travelling together. But separately there is a Family Bus About pass for $21 for families of six, up to 2 adults. So a combined weekend bus / rail trip for a family would be $61. I bet patronage is pretty low on weekends (and capacity under utilised), as most families would be opting for the station wagon.

    Compare that with Sydney’s Family Funday Sunday where for $2.50 per person, your family can enjoy a great value day out anywhere in Greater Sydney with unlimited travel on all trains, buses, ferries and light rail.

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  5. Nigel Kearney (1,012 comments) says:

    If ‘everyone’ has them, the charges will just increase over time accordingly. Then it becomes the same as a tax on anyone without cards, i.e. tourists. Which is probably ok because of the efficiency gains and the amount will hardly affect the incentives for tourists to come here. But we should call it what it is.

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  6. Sonny Blount (1,782 comments) says:

    What is wrong with the price just being the price.

    I don’t really want to organise cards and payments. I’d prefer to just pay for what I need, when I need at a good price.

    At the moment as a car commuter I subsidise the public transport system through my rates and then on the occasions that I do take a bus I get stung for not taking it 10 times.

    Is it justified to give some ratepayers a preferential price over others?

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  7. Jim (398 comments) says:

    Council numpties that can’t see past the end of their pencil.

    Presumably this was set at a 20% to keep it simple and easy to understand.

    Now some twit wants to make it 17% in one zone (and keep 20% in others – although that’s not explicitly mentioned). The likely reason being that the council can claim it did not increase the published fare by as much as they need to.

    It takes a special kind of person to think that way.

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  8. bhudson (4,740 comments) says:

    Given the scale of ratepayer subsisdies for PT in greater Wellington, the clear deduction is that usage is ‘sub-optimal’. How then is effectively raising the price going to help to increase demand?

    Of course if it reduces demand (which is a generally accepted implication of the principle of supply & demand – PT demand is not generally, let alone universally, inelastic) then we can anticipate a further increase in the ratepayer subsidisation.

    Has Jim Henson’s production company taken over the WRC?

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  9. gazzmaniac (2,307 comments) says:

    Carlos said

    In Beijing a few years ago they dropped the price of a bus trip from 2.00 RMB down to 0.40 RMB for those with cards, but didn’t reduce the cash fare at all. The result was that there were massive queues for people wanting to use buses.

    In Queensland in the last few years since the introduction of the GO card, the price of a fare to Brisbane from my local railway station on the Gold Coast has kept pace with in inflation, and is about $8 one way. The price for my friend who was visiting for Soundwave last weekend and had to buy a paper ticket was over $15, and you can’t buy a return fare any more.
    It’s a good idea in theory, but in this part of the world I believe it will be used as an excuse to raise the cost of paper fares rather than a discount for using a prepaid card.

    Campit said

    Yep agree. And if there is excess capacity at off peak times then price tickets cheaper for off-peak travel as well.

    They always used to do that on the trains in Wellington (I can’t say whether they still do since I don’t ride the train in Wellington any more). They also give away freebies to old people which I disagree with – it should be $3 for a pensioner to go wherever they want like in Sydney. Still a discount but not free.

    People hold up Sydney as a good example of how public transport should be run, and it is. The trains usually run on time and are pretty efficient especially compared to driving, it’s reasonably cheap, and the buses are tolerable and have pretty good timetables even on Sundays. But it’s still complained about in Sydney. It is never good enough for some people and the media are always going on about how bad it is. No matter how good a system you have, there will still be complaints.

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  10. lagphi (1 comment) says:

    Philippa from Wellington Regional Council here. The reduction in the standard 20% smart card discount, that’s being proposed for only one fare, is a one-off. It’s a temporary measure to prevent a much bigger increase in that particular fare next year or the year after. The Council is committed to a discount of 20% or more on prepaid tickets and cards.

    [DPF: Thanks for the clarification]

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  11. David Farrar (1,894 comments) says:

    Nigel – it isn’t so much about a charge on tourists (in London most tourists buy an Oyster Card) but making public transport more efficient and patronised. The fewer people paying cash, the more efficient it is. Also the easier it is to use public transport, the more it is patronised.

    I like the idea of cheaper fares at off peak times also. You can really only price to reflect market demand if people are paying electronically.

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  12. Jim (398 comments) says:

    “The reduction in the standard 20% smart card discount, that’s being proposed for only one fare, is a one-off. It’s a temporary measure to prevent a much bigger increase in that particular fare next year or the year after”

    If that makes sense to anyone then you have a future in the public service. To my mind it appears even more convoluted than a permanent change to the smart card fare differential for a single zone from 20% to 17%.

    It makes double less sense given that 2-3 year fare projections are part of the thought process.

    The discount is there as an incentive for people to use the card – so that you don’t have people searching pockets for loose change while holding up the bus queue. It should be priced in to the overall fare structure. It’s not a tool to be perturbed to compensate for temporary budget blips.

    If the discounts need a permanent change then make it so. Ditto for the headline fares.

    I guess this is a taste of what to expect with GST if the Greens ever get to influence treasury/revenue.

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  13. gazzmaniac (2,307 comments) says:

    DPF said

    You can really only price to reflect market demand if people are paying electronically.

    You can set a “peak” and “off-peak” price and and have different coloured tickets, just like you can have paper concessional fares. It has probably been done for over a hundred years in over a hundred cities.
    The system you are talking about sounds like it would be priced according to how many people are on the bus or in the system at a particular time, and will only serve to make it complicated.

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  14. si_rangi (60 comments) says:

    Currently living in Guangzhou where after 16 trips each month a 40% discount kicks in for all public transport (bus and underground) for those who use the integrated card system. This means my daily trip to work which involves a 15 min bus ride and a 40 min underground ride costs about NZD$1.00 (the bus ride is about NZ 0.25c) The public transport in GZ is incredible and so efficient. GZ has a working card system, trains that come even minute at peak times and the ability to move over 1 billion people annually on the underground. Touch wood, I have never had any issues, but this is the best system I seen.

    Anyway back to the issue, the discount is certainly an incentive to use public transport, I eagerly await the 17th trip and watch the cost of transport my plummet. My monthly spend is less NZD$40 and I use the system almost every day including weekends. Having a population of over 12 million certainly helps.

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