Tramtrain's fare system

[#Metro]

Principles

* All zones rise equally

* $1 flagfall

* Fare rises to be applied annually - no less than CPI and no more than 7% in any given year.
CPI only is saying "no new funding for new services", but too steep rises are also unaffordable, so need to have
an acceptable "band".

* Populist/Election Year Annual Fare Freezes Prohibited (looking at you Anna Bligh)

* 3 journey daily cap for everyone - no other caps to be introduced, and all other caps scrapped. Other gimmicks like
X trips then free scrapped.

* TransLink access pass, SEEQ etc stay

*ALL paper ticketing scrapped, forthwith.

* All door boarding on buses introduced

* 22 Zones rather than 23 - Current zone one is too small to be of any practical utility - amalgamate
areas of zone 1 and 2 and renumber as appropriate.

* 50% off peak discount - Very peaky profile reflects service patterns provided. Peak/Off-Peak
differential needs to be very steep to get people who take up seats in peak hour but can travel at
alternative times to shift out of there. Schedules also need to add trains to shoulder peak and off
periods so that people have something to transfer into.

* Concession holders simply pay the off peak fare, regardless of what time they travel. No double discounting.

* Health Care Card Holders get off peak fares but card to require reactivation after three months - ring up TL,
quote CRN or allow Centrelink and TL to share info with consent.

* NEW 25% shoulder peak discount - arriving at final destination between 5.30 am - 7am (tweak window as required)
Afternoons aren't as 'peaky' so no discount required there (yet)

* Seniors discount withdrawn - if you have money, you should pay. Replace with Pensioner discount
or similar. Means testing may be required. Money used to fund health care card holders, unemployed etc.

* Long distance commuters pay more. Justification - with a fixed budget one has the choice - can
run multiple services short distances for many people or one long service a very long distance
for a few. Nobody is forced to live 172 km from the CBD and if certain people want the benefits
of a low density country lifestyle they should pay more of the costs that come with servicing their
lifestyle choices that rather than dump the costs on everyone else.


Background
http://railbotforum.org/mbs/index.php?topic=9292.msg117026#msg117026

[#Metro]

I expect there will be quite a bit of discussion from this one 

[somebody]

I expect there will be quite a bit of discussion from this one 

No politician would remove discounts for seniors, unless they dislike votes.

[#Metro]

In Sydney, my mum said best thing about turning 60 was seniors card after which they used to travel by train alot more to Sydney for lunch.

I would limit all future rises to CPI only automatic indexation. New stations can have premium fares ($1 per usage) for 10 years to help fund their opening.

Apart from my preference for as the crow flys dynamic distance based fare model, I think rest I agree with.

If she still works then she'd have money to pay peak fares. If she doesn't and is on a pension then she'd qualify for 50% discount and then caps at three journeys. If she had work but didn't want to pay then shoulder peak and off peak would be options.

I am against CPI indexation purely because CPI is a basket of unrelated goods - doesn't reflect what's going on in transport industry and also because it's equivalent statement is "no new funding from fares". When you have nurses and teachers all pushing for pay increases etc you can see why this isn't always a good idea. Also, affordability is about the proportion of one's income you are spending - CPI doesn't capture this, but more approporiate measures such as wages growth does.

[#Metro]

No politician would remove discounts for seniors, unless they dislike votes.

The fare scheme is flexible enough to allow this part of the proposal to be modified for polyticks and still retain its purpose.
Welfare is for people who need it, not for those who want it I always like to say. Just because people are old doesn't
automatically mean that they can't afford it (i.e. big super payout).

[Golliwog]

Price wise, I think it starts too low, then rises too quickly. Could just be me.

Also, I'm not a fan of X journey then free caps. Even the existing one. If you're all about paying for what you use then you should aim for some kind of daily fare cap (something related to the number of zones covered in the longest trip). The frequent user discount was more acceptable because while it gave you a discount, you were still paying something that was related to how far you traveled.

As for what concessions should be available, I don't think you should be pulling it back from seniors. I support giving it to health card holders though.

Not sure what all door boarding has to do with a fare system, but I don't support it. I've made the reasons for that clear elsewhere.

* Populist/Election Year Annual Fare Freezes Prohibited (looking at you Anna Bligh)

On this though, I had to bite. As opposed to freezing electricity price rises last year so we now get a 20% increase this year (which they're complaining about and trying to pin on Labor), freezing car rego for 3 years so we get who knows what kind of increase on that in a few years time?

[#Metro]

Price wise, I think it starts too low, then rises too quickly. Could just be me

Well release your own fare scheme. You'll find that choosing a slope is arbitary and hard - it is impossible to give both cheap fares for inner city (think crossing the victoria bridge) cheap fares for people at very long distance AND not have smoothly increasing fares as you go along the zones.

Also, I'm not a fan of X journey then free caps. Even the existing one. If you're all about paying for what you use then you should aim for some kind of daily fare cap (something related to the number of zones covered in the longest trip). The frequent user discount was more acceptable because while it gave you a discount, you were still paying something that was related to how far you traveled.

Perhaps. 3 then free appears in other suggestions.

As for what concessions should be available, I don't think you should be pulling it back from seniors. I support giving it to health card holders though.

I don't support giving concessions to the rich.

Not sure what all door boarding has to do with a fare system, but I don't support it. I've made the reasons for that clear elsewhere.

A bus has two doors, they should be used. Trams do it, trains do it, Aircraft do it, Sydney Ferries do it, Cars do it. CityGlider does it...

Quote
* Populist/Election Year Annual Fare Freezes Prohibited (looking at you Anna Bligh)

On this though, I had to bite. As opposed to freezing electricity price rises last year so we now get a 20% increase this year (which they're complaining about and trying to pin on Labor), freezing car rego for 3 years so we get who knows what kind of increase on that in a few years time?

A subsidy is still charging everyone, it's just coming out of your tax bill rather than at the GoCard machine. Price controls are dangerous because they cause shortages and if the power were to go out, there would be big a** problems... http://en.wikipedia.org/wiki/Price_controls

Although price controls are often used by governments, economists usually agree that price controls don't accomplish what they are intended to do and are generally to be avoided.[1]

[ozbob]

Thanks!  I think it might be relatively too expensive for higher zones as is, but some interesting points you make.

[Golliwog]

If I was going to put up my own fare scheme (I still might), I wouldn't be specifying prices per zone. I'm not going to pretend to know what they should be set at, I would be focusing on what discounts would be available, capping, etc.

I know 3 then free appears in other suggestions, but I'm not a fan of it there either. It's probably a reasonable solution, but I'd rather they found a better way of providing a daily/weekly price cap. Or instead of a cap, provide discounts after a certain number of journeys.

To be clear about election year price freezes: I don't support either side doing it. They're stupid populist policies, that don't solve anything and just lead to overly high increases in following years to compensate. If instead of putting a cap on electricity price rises last year, then proceeding to do nothing for a year, they had actually spent the year (and the money they wasted) sorting out what was causing the prices to rise so much then in the long run I think we'd be in a better place price wise.

[somebody]

I know 3 then free appears in other suggestions, but I'm not a fan of it there either. It's probably a reasonable solution, but I'd rather they found a better way of providing a daily/weekly price cap. Or instead of a cap, provide discounts after a certain number of journeys.

It's apparently achievable within the constraints of the Go Card system.  Having a fixed $ cap like Perth is pretty inequitable anyway.  You could do what Oyster does and have a different cap level for different zones entered on a different system but it's not at all clear what the benefit of that would be (other than being popular).

[SurfRail]

There is no way a zone 22 fare should only be 50% more than a zone 14 fare.

I think interurban commuters are being slugged far too heavily under this proposal.  They will just go back to driving, which makes the outcome even worse than having to accommodate them on the PT network.

[somebody]

There is no way a zone 22 fare should only be 50% more than a zone 14 fare.

I think interurban commuters are being slugged far too heavily under this proposal.  They will just go back to driving, which makes the outcome even worse than having to accommodate them on the PT network.

And I would agree.  It's almost worth hiring a car for one person from Gympie North to the CBD.  Every time I've been to the Sunshine Coast bar two that is exactly what I did.

[#Metro]

Disagree. For every commuter lost from zone 22 I expect 100 new commuters from zone 1 (being figurative here). Under the current system people are robbed just crossing the river. You can't have cheaper fares for both inner city and rural areas.

Tourists etc can travel in off peak periods when fares are very reasonable.

[Gazza]

I expect there will be quite a bit of discussion from this one

Price wise, I think it starts too low, then rises too quickly.

Well release your own fare scheme.

[somebody]

CPI is what you should use unless you are consciously trying to raise or lower fares.

[#Metro]

Strongly disagree. Affordability is the proportion of costs relative to wages. Thats what should be used not some arbitrary index which has steak, Tvs and houses as its basis. CPI is just keeping the lights on, it effectively means no growth in the network plus we have to fight teachers, nurses, doctors, police etc for dwindling state funds. State money already makes up a very large portion of pt.

[Gazza]

CPI is just keeping the lights on, it effectively means no growth in the network

What about growth due to population growth, which means more fares collected and hence services to serve the expanded population?

[somebody]

Strongly disagree. Affordability is the proportion of costs relative to wages. Thats what should be used not some arbitrary index which has steak, Tvs and houses as its basis. CPI is just keeping the lights on, it effectively means no growth in the network plus we have to fight teachers, nurses, doctors, police etc for dwindling state funds. State money already makes up a very large portion of pt.

What you are saying is that the fares aren't high enough.  Not too many people see it like that.

[#Metro]

What about growth due to population growth, which means more fares collected and hence services to serve the expanded population?

More population growth means more need for infrastructure within the core, which is astronomically costly, so costly in fact that it will probably never ever have its costs recouped in fares, plus if the growth is in other areas such as Yarrabilba, that's more services that run at a huge loss having to run into low density areas in the middle of LaLa land and more 'community service obligation routing' style services...

I think that everybody agrees the system needs more cash, and I really don't care where it comes from - more gov't money, from farebox and from cutting waste.

[#Metro]

What you are saying is that the fares aren't high enough.  Not too many people see it like that.

Actually Simon, if you look at the table, the bulk of people see their fares go backwards and become cheaper. And particularly so for short trips and those in the off peak.

CPI just pays for existing services and that's it. I don't agree that we should have a network stuck at what it is. Frequency is expensive and costs money. Improvements to Ferny Grove line trains cost $18 million, Maroon CityGlider cost $9 million...

Improvements cost money, money needs to come from somewhere. It needs to come from gov't, it needs to come from cutting waste, and it needs to come from strategic fare policies, as much as people may not like to hear it. You'll notice my fare proposal does have cheaper inner trips where that will induce demand and where services have pretty good cost recovery already or even turn a profit (199!) and charge more for outer areas / LaLa land services that go 170+ km out of the CBD where the service costs are higher. I'm not asking people who live on the very edge of the network to pay the whole costs (impossible), but I'm asking them to pay their fair share for servicing their lifestyle choices. And they have options in the off peak and shoulder peak periods as well.

[Golliwog]

I think what the last few years of increases have shown is that treating passengers as a cash cow causes them to leave the system. For now increases above CPI shouldn't even be considered. Trying to fund increased services by increasing fares isn't a good idea. We got large service increases over the last few years as well as the increases and look where we are patronage wise. It clearly failed.

Put more money towards the system, from government coffers and use it to run more high frequency services. Then once you have the patronage up, look at increasing fares to something a bit more reasonable for the service being provided.

To some extent the analogy of BAC trying to get the airlines to start paying for the new runway before they get to use it fit here.

[somebody]

I think what the last few years of increases have shown is that treating passengers as a cash cow causes them to leave the system. For now increases above CPI shouldn't even be considered. Trying to fund increased services by increasing fares isn't a good idea. We got large service increases over the last few years as well as the increases and look where we are patronage wise. It clearly failed.

Put more money towards the system, from government coffers and use it to run more high frequency services. Then once you have the patronage up, look at increasing fares to something a bit more reasonable for the service being provided.

To some extent the analogy of BAC trying to get the airlines to start paying for the new runway before they get to use it fit here.

It would be better to not increase services and not increase fares than to increase both.  Cut services and cut fares?  Might be what is going to happen, at least in the bus system.  There are a lot of redundant services.

[somebody]

^ I don't know where you got the idea that Anna was reducing the subsidy!

[#Metro]

Wages are not linked to CPI. If affordability is the proportion of someones wage then it is possible to increase fares but make no change public transport affordability.

Fares should rise each and every year under a *new* fare scheme within an acceptable band so that there is new funds going into pt every year to fund improvements along with govt funding and cuts to waste and duplication.

My basic point is this fare rises should be kept in step with income growth, which is NOT the same as CPI if we value a well funded transit system. yes fares cost a lot under the current system, but I'm NOT taking about the current system am I?

[SurfRail]

Wages are not linked to CPI. If affordability is the proportion of someones wage then it is possible to increase fares but make no change public transport affordability.

Fares should rise each and every year under a *new* fare scheme within an acceptable band so that there is new funds going into pt every year to fund improvements along with govt funding and cuts to waste and duplication.

My basic point is this fare rises should be kept in step with income growth, which is NOT the same as CPI if we value a well funded transit system. yes fares cost a lot under the current system, but I'm NOT taking about the current system am I?

CPI is a perfectly reasonably metric to use because the cost of running the public transport system is about a large number of different types of consumables and inputs, such as diesel, electricity, stationery, cleaning services, wages, telephony etc.  I don't understand why you need to pick something other than an index which is used universally to adjust pretty much all other government set pricing.

[somebody]

AWOTE is a measure against wages.  The thing is that there is no reason why fares should rise in line with that instead of CPI.  Basically TT is arguing that fares should form an ever increasing portion of people's expenditure.

[#Metro]

actually simon, you've kind of minced my words to say the exact opposite of  what im saying. Congratulations.

CPI doesnt measure affordability, and it's main input for pt is labour, which also isn't restricted to CPI

[somebody]

I suppose technically a constant portion of ones expenditure assuming travel doesn't increase.  Although travel will increase with more money.

[Gazza]

^At the end of the day, you won't squeeze much extra money if you base rises around increases in wages versus CPI would you, certainly not enough to make major service improvements.

[#Metro]

Simple way of putting it, by example by exaggeration:

If my income doubles and public transport fares double, then my affordability (ability to pay) has not changed. Contrary to what simon says, as a portion of income, it has gone neither up nor down even though fares in this hypothetical have gone up 100%. And there's twice as much cash for services.

[Golliwog]

I know it's an exaggeration, but what would the justification for doubling the fares be? Telling people that the fares have doubled just because their average wage had doubled isn't going to be popular. Sure, you're planning on investing that extra into services, but most people are going to ignore that and focus on the fact that your justification for the size of the fare rise is that their pay has gone up by that much. Cue the CM running sob stories of people who's wages haven't increased or have been forced to accept a pay cut just to keep their job. Politically not going to happen.

Stick to annual CPI increases, any increases for better services can be worked out as required. Realistically though, they should be either loss lead through government funding (i.e. taxes) or expansions paid for by patronage (and/or population) growth.

[#Metro]

Stick to annual CPI increases, any increases for better services can be worked out as required. Realistically though, they should be either loss lead through government funding (i.e. taxes) or expansions paid for by patronage (and/or population) growth.

But if you increase taxes (how is that going to happen with the obsession with surpluses plus Police, Health and Education budgets all screaming for more cash plus politicians going into hiding and swearing up and down that they won't increase the GST, which is a main source of funds for state gov'ts) you're still increasing charges on people. There are advantages to funding from taxation, but state gov'ts cant levy income tax, so these advantages can't be taken advantage of. Revenue from population growth will happen anyway I feel as people have to travel to and from work no matter what, and it really depends on where that growth is and how dense it is - if you have logarithmic fares like Fare's Fare, you make it easy for people to live far away, then you're going to get a high cost low frequency style network.

When you double the frequency, you double the cost.

I can understand why govt's index welfare benefits to CPI - simply because its there to keep the lights on for people, a safety net, and give them no advantage over those who are in the workforce, who do enjoy their incomes which rise to AWOTE or whatever the index for increasing incomes is. It's also because people buy pretty much everything in the CPI basket with their cash. But this is not that case, we're not giving out money to people, it's about service pricing and how to get a hugely improved network funded versus costs for that.


Fares are a valid way to raise funds for PT, as are taxes as are cuts to waste, inefficiencies and duplication (the latter isn't really a way to raise new cash, it's more of a recycling mechanism for EXISTING cash) so that leaves us with just two ways - taxes or fares, and you'd have to make a pretty darn strong case as to why only taxes should be used.

Remember, this debate was about affordability which is the ability to pay. Affordability is what people CAN pay, not what people WANT to pay...

As for the point about concessions, poor etc, there would be no point in charging people beyond their means, it's also bad for system patronage, hence the 50% discount and off peak fares for the WHOLE day, it's actually far better than under the current system so I don't see how people can have issue with that. I do take points about the too cheap etc but this is a discussion, things get refined, and I'm not TransLink so I can get away with more extreme proposals than Politicians or TL can.

[somebody]

^ I don't know where you got the idea that Anna was reducing the subsidy!

If I recall Anna justified the large increases on the basis to reduce the subsidy from 80% to 70% or something like that, why else do it?

But not in absolute terms.  Rhetoric about every $ of increased fares would be put into services shows where they were coming from.

[Stillwater]

Yep CPI.  Simple.  As to the academic argument about 'shoulder peak' applying beyond Nambour, it would operate for the single daytime return train to Gympie North, but not the commuter train that leaves GN at 5.56am and, in the afternoon, which leaves around 5.45pm.  There's no waiting around 'til 6pm when the discounts kick in.  LOL

[SurfRail]

When you double the frequency, you double the cost.

I think we've done this to death previously.  It really isn't true, especially with rail.

I can understand why govt's index welfare benefits to CPI - simply because its there to keep the lights on for people, a safety net, and give them no advantage over those who are in the workforce, who do enjoy their incomes which rise to AWOTE or whatever the index for increasing incomes is. It's also because people buy pretty much everything in the CPI basket with their cash. But this is not that case, we're not giving out money to people, it's about service pricing and how to get a hugely improved network funded versus costs for that.

Does not compute.  I'm a solicitor and my pay is only indexed annually.  I wouldn't be the only one.

Remember, this debate was about affordability which is the ability to pay. Affordability is what people CAN pay, not what people WANT to pay...

Explain current patronage trends then.

[#Metro]

1. Affordability to pay is the cost divided by how much money someone has, and expressed as a percent.
2. Wages (the cash paid into people's bank accounts every fortnight) rise with AWE or AWOTE, not CPI
3. CPI describes the rise in general costs, not wages.
4. If wages rose in line with CPI (they don't), then AWOTE = CPI, which would mean there would be no point in calculating AWOTE...

Bottom line, once we get past all the self-interested rhetoric, any new fare system will need the capacity to increase fares in an acceptable band that has,as a guide, CPI as the floor and AWOTE as the roof of the said band, so that in absolute terms, each and every year, the agency will have new money to play with. It may not be much now, but should more people use the network, it will become significant.

Taxes and fares are the only ways of generating new money. Cutting waste does not create new money, it only recycles existing cash.
I don't belive population growth is good enough to generate new cash at a rate fast enough - given that PT runs at a loss, that the subsidy is 3x what is collected in fares, and that 90% of whatever trips are made by new population growth is likely to be in car, and particularly so if growth is in outer areas like Yarrabilba, back of Gold/Sunshine coasts and commuting to Brisbane.

I do have a point with Brizcommuter's analysis and posts. I have to point out that simply comparing absolute fare levels across cities and countries doesn't tell us anything about affordability. Sure many countries have cheap PT but they also have lower wages. If we want to compare affordability across cities and countries, we should do so on a proportion of income basis, not on a superficial exchange rate conversion of the absolute price. My point is that people care about relative, not absolute (nominal) prices. Australia is a high wage country.

The reductions in patronage with the recent (excessive in my view) price rises are due to a reduction in value for money - the quality and frequency of the network is not at a level where you can charge rolls royce prices and the time value versus the alternatives are not that great, particularly for inner city areas where, when adjusting for the slower speed of PT, it would make more sense to jump in the car. This is particularly true of trains, where the cost of the ticket price has increased but the services are shocking, have barely changed and in many cases have actually become slower!  This of course can be changed with the bus review, upgrades of services, etc. None of this is an argument to cap to CPI under a future fare scheme.

[#Metro]

Does not compute.  I'm a solicitor and my pay is only indexed annually.  I wouldn't be the only one.

Sorry to hear! AWOTE calculation background is here --->
http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/MSB/21

What is measured

Average weekly ordinary time earnings is a measure of before tax earnings of full-time adult employees; it excludes any overtime payments. It is calculated by dividing an estimate of gross—before deductions—weekly earnings by the number of employees. AWOTE has been measured since December 1983.

AWOTE has become a standard measure for wage levels and is enshrined in some legislation as a benchmark for the calculation of some social security payments.

To gauge how earnings are changing in comparison with inflation, the inflationary component is removed using the consumer price index; this leaves the real AWOTE series.

AWOTE is calculated by sending heaps of surveys out to employers to find out how much their employees are being paid...

[somebody]

2. Wages (the cash paid into people's bank accounts every fortnight) rise with AWE or AWOTE, not CPI

Actually not really.  As one gets older for many people their skills increase and so does their base pay.  As you get even older you sometimes cut back your hours reducing your base pay.

Anyway, the commission of audit has pointed out that productivity is dropping in Australia so CPI may well be increasing more rapidly than AWOTE.

I think the whole idea of referencing against AWOTE is silly, and I am sure that everyone else does too.  The whole point of continually rising living standards is to buy more, not to spend more to get the same goods or services.

If they want to raise fares above the level of CPI then they should decide to do that intentionally, not have it happen in the same way as bracket creep does.

[#Metro]

If your living standard is rising, then I think people can't go around crying poor.

[Golliwog]

If your living standard is rising, then I think people can't go around crying poor.

It's human nature to want to pay less for things! People just need to learn to tune out the whingers from those with real issues.

I'm with Simon, if you're going to be increasing above CPI, it should be because you're providing a better service, not because passengers may or may not be getting paid more.

TT, I'm going to repeat it again, the extra money that you want the PT agency to have to play with each year should be coming from increased patronage, not jacking up fares.

From a cost stand point, yes it's going to be subsidized, but I'd rather get more people on PT paying a lower fare than risk driving people away with higher fares. There are that many externalities associated with the private motor vehicle (congestion, crashes, deaths, road maintenance, etc) that there would undoubtably be savings elsewhere to compensate for it. From the budget spreadsheet of the PT agency they would be ignored, but that doesn't mean they don't exist.