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The arguments against increasing fares

by Paul Bruce
Raising fares is hardly the way to reward new customers, much less hold on to one’s existing customer base, reduce congestion, or address the obesity epidemic.

Fare increases on Wellington’s public transport [1] again come at a time when the recession is squeezing those who rely on public transport the most — people of modest means whose incomes are at the low end of the scale.

And you don’t have to be a rocket scientist to realize that increased fares will push middle income commuters back into their cars.

The stated purpose of the increase does not stack up at all – it does not take into account at all our Public Transport Plan. In particular, the large rise in cash fares does not fit our intention to move to an integrated ticketing system and the new fare structure which we approved last year.

We have agreed that there should be no transfer penalty. We have also agreed to
cap daily fares, extend the youth discount and remove the anomaly between rail and bus.

A one zone penalty cash fare wouldn’t exist for many commuters with the new fare structure.

A VUW survey on the proportion of staff using public transport who work close to the railway station and Rutherford House, and staff who work at the Te Aro campus at the other end of town, showed that far fewer Te Aro staff arriving from northern suburbs use rail, because they are not willing to pay this penalty fare.

And we are about to increase the penalty by 25% for the adult cash fare.

Wellington fare payers contribute a much higher proportion of the farebox than other regions. Both Auckland and Christchurch have fare box recovery below the 50%, yet we insist on keeping Wellington’s at 55%.

Fares cannot just be raised constantly to try and reach some arbitrary target.
Fare elasticities come into play, whereby patronage decreases as fares increase.
There is an optimal point where fares and patronage are at a point where both are maximised. That optimal point is what regional council research should seek to ascertain.

What we have here is

• Confusion with our objectives
• Disregard for network integration and service linkages
• Lack of regard for the wishes of the community

And, according to Transport Agency modelling, we are missing out on the economic benefits that a modest reduction in the farebox return from 55% to 50% would bring to the region. These benefits amount to five times any loss in farebox recovery.

Fellow Councillors, don’t support the recommendation for fare increases. Instead, let fare box recovery increase through improved performance.

I am also recommending that we conduct “a leave the car at home” sustainable transport message directed at ratepayers.

Councillor Paul Bruce made this speech at last week’s Regional Council meeting where a majority of his fellow councillors voted to support the fare increase.

October 1: Increase in bus and train fares [2]

February 14: Another increase in bus and train fares recommended [3]