Action for Public Transport (NSW)

http://www.aptnsw.org.au/

PO Box K606
Haymarket NSW 1240
15th August 2005
Mr James Cox
CEO
Independent Pricing and Regulatory Tribunal of NSW
Level 2, 44 Market Street
SYDNEY NSW 2000
PO Box Q290
QVB POST OFFICE NSW 1230
Telephone: (02) 9290-8400
Fax: (02) 9290-2061
ipart@ipart.nsw.gov.au

Dear Mr Cox,

Review of Bus Fares - Final Submission
Introduction

This is the second submission by Action for Public Transport (APT) to the Bus Fares Review, the first having been made on 19th June before the content of the agencies' submissions were known. The views expressed there remain unchanged, except as regards TravelPasses.

This submission will respond in detail to the points raised by the Ministry of Transport (MoT), behind which the State Transit Authority (STA) is hiding, and the Bus & Coach Association (BCA).

Executive Summary

  1. We deplore the missed opportunity, as the new contract and funding regime starts, to abandon the archaic distance-based fare system and commence a modern zonal system.
However, given that we are probably stuck with the current system for some time, we offer the following comments on the proposals.
  1. APT accepts a small rise in single bus fares commensurate with the CPI increase plus an add-on to cover improvements in service;
  2. We have concerns about who will assess the service improvements, and how an improvement will be translated into a percentage or dollars and cents fare increase.
  3. We reject the plot to reduce TravelTen discounts to 15% from the current 20%. The discounts must remain at the current level or greater.
  4. We insist that passengers who are not offered a TravelTen ticket on their services be exempted from the single fare increases until a TravelTen or similar product is available.
  5. We accept an increase in TravelPass prices commensurate with the increase in single fares, but no more.
  6. We are disappointed that the Ministry has again resorted to biassed hypotheses, selective examples and plain incorrect arithmetic to try to support its claims of excessive discounts on TravelPasses, especially when it was upbraided by IPART last year for the same thing.
  7. We are concerned that the Ministry gives so many reasons why the TravelPass ticket does not fit or comply with the new regime (softening up for their abolition?) instead of meeting the challenge and trying to modify TravelPasses to meet the new situation.
  8. We accept a price rise for the DayTripper ticket from $15 to perhaps $15.60 or $16.00.
  9. We recommend the sale of Pensioner Excursion Tickets (PETs) at off-bus agencies to reduce bus loading times, and therefore increase efficiency.


All Change, Please!

This year, while unprecedented changes are being made to most aspects of bus transport, the fare calculation system that started on the trams 100 years ago still reigns supreme. It remains fixed in the past like a dinosaur, while systems in other cities have evolved with the times.

The following media release from Brisbane shows what can be achieved:


QR Corporate News Articles
Happy first birthday TRANSLink
26th July 2005

TransLink is celebrating a major milestone - its first birthday. TransLink provides one single public transport network covering South East Queensland from Gympie North / Noosa to Coolangatta and west to Helidon.
TransLink's first 12 months has seen a 9.5% increase in public transport patronage.
South East Queenslanders have embraced integrated ticketing, with an extra 11.8 million passengers since the introduction of TransLink.
During the past 12 months, more than 200 different ticket types were consolidated into five core products and several operator-specific products, the TransInfo call centre answered more than 1.7 million queries and the TransLink website received more than 1.7 million hits.
Next year will see the delivery of the $136 million smartcard system.

http://www.corporate.qr.com.au/Corporate/News_Room/Current/News_Articles/857.asp

Note that integrated ticketing in South East Queensland was introduced without smartcards. The technology will follow the system, and not the other way around.

However, until such time as Sydney catches up, and while the tinkering with the current system continues, we offer our comments on the proposed changes.

Comments on Ministry of Transport's Recommendations

Recommendation 1. That IPART determine a rise in the Sydney Metropolitan harmonised fare scale based on a CPI + 'x' approach.

The MoT submission explains that 'x' represents demonstrable service improvements that might justify an increase over CPI.

APT generally supports Recommendation 1, but we raise a few comments, questions and conditions below.
Shadow Fare. On page 1 (numbers refer to the MoT submission unless stated otherwise), it says that one of the four components of payments to operators will be a "patronage payment based on shadow fares for each passenger boarding". The word "shadow" is a worry. The school buses used to carry phantoms. Are these shadows like the phantoms? What does it mean? If there is nothing sinister, perhaps use a better term than "shadow".

Calculation of 'x' for Improvements. Throughout the submission, many types of service improvements are mentioned. Some are:

The problems are:
  1. How to quantify improvements into 'x'. APT suggests establishing a list of the ten main indicators and rate changes on a scale of minus five to plus five. Use the aggregate to determine if there has been an overall improvement.
  2. Whatever method is used, there is also the problem that, while the fares are "harmonised", the service improvements may not be. Will a slack operator be rewarded for the conscientious efforts of others?
  3. How to translate 'x' into a percentage or into dollars and cents.
  4. Who would identify or evaluate the improvements? The operators? The Ministry? The customers? IPART?


Improvements Equal Efficiency? Given that many of the improvements noted above are various forms of efficiency, they should reduce costs if implemented effectively. Why, then, should service improvements be linked to fare increases? Where is the economic justification of this position?

Improvements Match Community Standards. The service improvements being suggested do little more than keep pace with community expectations and requirements. People expect these advances in their mobile phones, in their kitchens and, more relevantly, in their motor cars.

Calculation of 'y' for Deterioration. How will the following factors be identified, assessed, quantified and translated into a percentage or dollars and cents? Private Operator TravelTens. The rise in single fares should not apply to customers of operators who have not established a discounted TravelTen (or similar) scheme. The operators have had two year's notice of this. Computers would help, but are not necessary. A printed card and a hole puncher will suffice.

Fare Reduction. On page 10, the recent fare reduction is implied, by association, to be a service improvement, and therefore supporting a fare rise. We will not hold our breath waiting for this year's fare rise to be counted as a service deterioration, and therefore supporting a fare reduction.

Passenger Relations Plans. Page 3 requires operators to formulate Passenger Relations Plan. Would it be a good idea to ask for passenger input into these plans?

"Single Fare Scales Support Tcard." We find it curious that on page 7 the MoT submission says that "a single fare scale on Government and private buses .. would support the successful introduction of a Tcard." A successful Tcard should be able to handle different fare scales for different operators. True, the project would be easier with harmonised fare scales, but they do not necessarily "support" a SmartCard.

Recommendation 2. That IPART determine a 15% discount on the single adult metropolitan fare for all TravelTen products under the new Sydney metropolitan bus service contracts.

15% No! 20% Yes! We agree that a single discount should apply to all TravelTens. However, we still oppose the MoT's proposal for a maximum 15% discount, and remain committed to a minimum 20% discount.

Dodgy Figures. As usual, the Ministry uses some suspect and selective figures in support of its arguments. The MoT quotes discounts below 15% for Melbourne, Perth and Canberra, but ignores discounts of 20% or more in other cities. While the discount for Transperth's MultiRider 10 ticket is indeed 15%, the discount for the MultiRider 40 ticket is 25%.

http://www.transperth.wa.gov.au/.

In Brisbane, the Brisbane City Council (the major operator) and some of the smaller suburban companies give a 20% discount on Ten Trip tickets.

http://www.translink.com.au/.

In Adelaide, the following fares apply from 3rd July 2005:
Ticket Type Single x 10 Ten Trip Difference Discount
All Times - Zone $3.50 $35.00 $22.90 $12.10 35%
All Times - 2 Sections $2.00 $20.00 $12.40 $7.60 31%
Interpeak - Zone $2.10 $21.00 $12.60 $8.40 40%
Interpeak - 2 Sections $1.40 $14.00 $9.60 $4.40 31%

http://www.adelaidemetro.com.au/.

In Hobart, Launceston and Burnie the Metro gives a standard 20% discount on 10-Trip tickets. http://www.metrotas.com.au/.

Even in Darwin, the Multi 10 ticket gives 8 trips for the price of 10 (20% discount) over each of the four zones.

http://www.ipe.nt.gov.au/whatwedo/busandferry/bus/fares/.

Obviously, most operators do not consider 15% to be "an acceptable loyalty bonus" (page 12).

Green and Orange TravelTens. The discounts given by these tickets are currently 16% and 15% respectively, whereas the others are all around 20%. When the next general fare adjustment is made, special attention should be given to the relativity between the prices of the Green and Orange TravelTens and the relevant single tickets so that a discount of at least 20% is established.

Size Doesn't Matter. The comment by the Ministry about cities comparable in size to Sydney is irrelevant. There is no direct or inverse relationship between the size of the city (or operator) and the discount.

Benefits to Operator. The submission correctly says that multi-ride tickets offer benefits to operators and customers through reduced boarding times. But wait - there's more! Operators also benefit through: and thus they should be able to give a higher discount.

No TravelTen, No Price Rise. Regardless of the discount level, all private operators must introduce a multi-ride ticket. If they don't, passengers should not have to pay an increase the price of the single ticket. Equality for all? Computer technology is not necessary. It was done 100 years ago with a cardboard ticket and a hole punch. We have deliberately repeated this point under two headings (Single Tickets and TravelTens) so that it will not be missed.

Recommendation 3. That IPART:
  1. Determine a rise in the price of three-mode TravelPasses (and DayTripper ticket) that is at least in line with a rise based on the bus/ferry portion of each product; and
  2. Determine a rise for the bus/ferry TravelPasses that is at least in line with the increase determined for Sydney metropolitan single fares.
Yes, we support those two recommendations with the deletion of the words "at least".

TravelPass Discounts. The Ministry continues to claim that discounts on TravelPasses are excessive. Because TravelPass prices remained unchanged in the last review while single bus and ferry fares rose, we concede that the discounts are higher now than they were.

Single Fares a False Base. It is unsound to assess TravelPass discounts on the base of the single fare, as if it were the building block of the universe. The single fare bears no relation to net costs of providing services. It is an arbitrary amount that has been manipulated for years.

TVT Data. In previous submissions to enquiries and reviews by IPART and other bodies, State Transit has often quoted Total Value of Travel (TVT) figures to support its claim of excessive discounts on TravelPass tickets. The TVT figures were said to come from "studies" or "analyses". We were led to believe that State Transit had empirical data (from sampling, from tracking, or by other means) to show how often a ticket was used and where. With the range of Automated Fare Collection (AFC) data and computer systems available to the Authority, this did not seem unreasonable to us.

However, pressed to produce the evidence, State Transit can only offer possibilities. Page 17 talks about "probable commuter behaviour", "prices may have discounts of approximately -", and "in the event of ...".

The table on page 17 deserves special attention. Let's look at each row individually.

This is the first row as compiled by the MoT:

Example Travel Patterns Weekly TravelPass Fare Total Equivalent Single Fare Total Equivalent Bus/Ferry MultiRide and/or Rail Weekly Fares TravelPass % Discount from Single Fares TravelPass % Discount from Multi-Ride & rail Weekly
10 train trips (10 kms) (Red TravelPass) $32 $28.00 $25.00 52% 37%
10 bus trips (3-5 sections) $27.00 $19.70
2 ferry trips (Inner Harbour) $9.60 $6.20
Total $66.60 $50.90

The total in the third column is wrong. It should be $64.60, not $66.60. The discount in the fifth column has been calculated on the incorrect total. It should be 49%, not 52%.

The 10 x 10km train trips is a reasonable base for an average travel pattern, but only an average. From Croydon, the western extremity, to Central is 9.44 km. A rail weekly from Croydon to the City Circle costs $25, to North Sydney costs $28 and to Chatswood, the other extremity, costs $31. As for shorter trips, a Croydon to Stanmore weekly costs the minimum fare, $18. Croydon to Newtown, Macdonaldtown, Redfern and Central is $22.

Rail weeklies to Bondi Junction from any of Artarmon, Summer Hill, Dulwich Hill or Tempe (all within the Red TravelPass area) are $25.

The 10 bus trips at 3-5 sections may be a little high. Three sections from Central will take a bus traveller to Leichhardt (route 438), Darley Road (route 372) or Gardeners Road (route 309). Many people might make only a one or two section trip.

The two ferry trips are quite unreasonable. It is highly unlikely that a commuter will undertake "further discretionary travel on the weekend (such as a ferry trip)" every weekend. The high price of single ferry fares grossly distorts the calculation of these discounts. The holder of a Red TravelPass would be much more likely to make additional bus or trains trips at the weekend than ferry trips. The third line should be amended to read "additional discretionary trips - single fare equivalent, say $5.00".

The revised first row of the table now looks like this:
Example Travel Patterns Weekly TravelPass Fare Total Equivalent Single Fare Total Equivalent Bus/Ferry MultiRide and/or Rail Weekly Fares TravelPass % Discount from Single Fares TravelPass % Discount from Multi-Ride & rail Weekly
10 train trips (10 kms) (Red TravelPass) $32 $28.00 $25.00 ($28.00 on $60.00) 47% ($16.90 on $48.90) 34%
10 bus trips (3-5 sections) $27.00 $19.70
additional discretionary trips $5.00 * $4.20 *
Total $60.00 $48.90
* These two figures are estimates only, and represent roughly a 9:1 ratio of bus/rail trips to ferry trips (rather than the MoT's 0:10 ratio of bus/rail trips to ferry trips)

The second row of the table shows:
Example Travel Patterns Weekly TravelPass Fare Total Equivalent Single Fare Total Equivalent Bus/Ferry MultiRide and/or Rail Weekly Fares TravelPass % Discount from Single Fares TravelPass % Discount from Multi-Ride & rail Weekly
10 bus trips (1-2 sections) (Blue Bus/Ferry TravelPass) $29 $16.00 $11.80 55% 31%
10 ferry trips (Inner Harbour) $48.00 $30.30
Total $64.00 $50.90

This table would be reasonable for people who commute across the harbour by ferry and catch a bus at either end (or both ends). In fact, if they make four bus trips a day instead of two, or have additional discretionary travel, the discounts would be higher.

However, this is yet another case of the authorities putting forward the extreme or the unusual as the norm. Firstly, the very high single ferry fares skew the result. Secondly, the table on page 18 shows that for Blue TravelPasses, the revenue split is 90/10 in favour of buses, so it is unfair to say that the table represents average travel behaviour.

Most people who don't use ferries would need to take four bus trips a day to make a Blue TravelPass worthwhile.
A Blue TravelPass costs $29.
Ten 1 - 2 section trips (using a TravelTen) cost $12.70. Twenty cost $25.40.
Ten 3 - 5 section trips cost $21.30. Twenty cost $42.60.
Ten 6 - 9 section trips cost $27.90. Twenty cost $55.80.
There are very few trips of 10 or more sections that would realistically be taken with a Blue TravelPass.
Revising the table to reflect the 90/10 split, and also to make the average "two buses" trips a more realistic combination of 1 - 2 sections and 3 - 5 sections, we have:
Example Travel Patterns Weekly TravelPass Fare Total Equivalent Single Fare Total Equivalent Bus/Ferry MultiRide and/or Rail Weekly Fares TravelPass % Discount from Single Fares TravelPass % Discount from Multi-Ride & rail Weekly
90 bus trips (1 - 2 sections) (Blue Bus/Ferry TravelPass) $29 x 10 = $290 $144.00 $114.30 ($145.00 on $435.00) 33% ($45.30 on $335.30) 14%
90 bus trips (3 - 5 sections) $243.00 $191.70
10 ferry trips (Inner Harbour) $48.00 $30.30
Total $435.00 $335.30


The final row of the MoT table, for a part-time worker, looks reasonable, although additional discretionary trips would make the discount larger.
Example Travel Patterns Weekly TravelPass Fare Total Equivalent Single Fare Total Equivalent Bus/Ferry MultiRide and/or Rail Weekly Fares TravelPass % Discount from Single Fares TravelPass % Discount from Multi-Ride & rail Weekly
8 train trips (10 km) (Red TravelPass) $32 $22.40 $24.00 30% 20%
8 bus trips (3 - 5 sections) $21.60 $15.76
Total $45.60 * $39.76
* This total in the MoT submission is again wrong (it should be $44.00) making the alleged discount higher than it should be.

It can thus be seen that the discounts on TravelPasses are not as high as what the authorities make them out to be. Statistics and calculations presented by the authorities should not be accepted without examination and verification.

It is also interesting to note that CityRail has never bothered calculating, let alone presenting, any TVT data.

TravelPasses and Private Buses. On page 18, the MoT says, " ... TravelPasses may only be used in zones based on radial distances from the CBD and this is not appropriate for the contract areas of private operators. It is also inconsistent with the planning principle of developing a bus network base on linking all regional centres." Well, this, of course, depends on how you design a TravelPass. A change in contract areas calls for a re-think of TravelPasses. You can't just say that because they were designed for a radial system they can't be used for a regional system. And anyway, are not Parramatta, Blacktown, Hurstville, etc now designated as CBDs?

Regarding the bus network linking regional centres, surely a TravelPass can be designed that covers adjoining regional areas and their centres. Unless, of course, the Ministry wants to abolish TravelPasses. We understand that no decision has yet been made about TravelPasses.

SE Qld Translink Tickets. From Coolangatta to Gympie, a passenger can buy a daily ticket for twice the price of a single that covers the same number of zones. This is, in effect, a daily TravelPass or a DayTripper ticket. The third and subsequent trips are free - or, in terms of discounts, the discount on each trip increases as more trips are taken. Weekly tickets, covering unlimited travel in the specified zones (in effect, TravelPasses), give a discount of 20% up to 10 zones, increasing in steps up to 35% for 23 zones. Although the zones are concentric, based on Brisbane, the price is not based on travel to Brisbane, unlike the Sydney TravelPasses, where the rail content is based on a person travelling to the city centre.

TravelPasses and STA Buses. On page 19, the MoT says, "the maintenance of TravelPasses on State Transit bus services only may be inconsistent with the principles of competitive neutrality. However, the Ministry is currently exploring means of resolving this issue." As for the first part, surely an operator, having complied with the basic requirements of the contract, can do what else it likes for operational or marketing reasons. It is beyond imagination how a State Transit TravelPass could impinge on anyone else's "competitive neutrality". As for "exploring means of resolving the issue", one might be led to believe that the Ministry wants to abolish TravelPasses.

The final statement in this paragraph says, "Tcard, for example, will provide a technological base for multi-modal travel and will enable the Ministry to introduce a standard 15% fare discount across all modes." This is administrative drivel at its worst. We already have a technological base for multi-modal travel, and before that we had a non-technological base for multi-mode travel, just as Brisbane started with last year. And we would hope that Tcard will enable the Ministry to introduce a standard discount of any percentage (not just 15%) across all modes, or different percentages for different modes, whatever is appropriate.

DayTripper. This ticket provides all day travel on government buses, trains and ferries at a cost of $15.00. The revenue split between bus, rail and ferry is 16/50/34% respectively (page 19), reflecting the heavy use of the ticket for rides on the Manly and Zoo Ferries.
The ticket cost $13.00 when introduced in July 2001, then $13.40 in July 2002, rising to $15.00 in August 2003. The proposed increase to $16 would be a $3 or 23% rise in four years, or 6% a year. Although well above the CPI, the increase is not unreasonable considering it is aimed at the leisure market. The new price would still be a bargain, and the ticket works wonders with the queues at Circular Quay on a summer weekend.

Recommendation 4. That:
  1. IPART recommend (and determine for State transit's Newcastle Bus Services) a rise in the fare scales for commercial operators outside the Sydney Metropolitan Area based on cost increase information contained in the BICI.
  2. When making its recommendation, IPART should note the Ministry's increased reimbursement to compensate operators for the recent wage decision.
  3. Determine a $0.10 rise in the adult single fare for State Transit's Stockton ferry service.
No comment from APT.


Recommendation 5. That:
  1. IPART recommend a rise in non-commercial payments in accordance with the Price Waterhouse Model referenced in the Ministry of Transport's current contracts with non-commercial operators; and
  2. When making its recommendation, IPART should note the Ministry's increased payments to operators for the recent wage decision.
No comment from APT.

Other Comments

Sale of Pensioner Excursion Tickets (PET) Off-Bus. The Unsworth Report in February 2004 said (page 76) "Prior to the implementation of the smartcard system, consideration should be given to alternate (sic) ways of reducing the impact of on-board ticket purchases. The ability to purchase multiple PETs may provide a means of reducing on board related delays. This issue was raised in consultations and the Review believes that it has merit." As far as we know, this suggestion has progressed no further. It is not good enough for the MoT to insist on some changes "because the Unsworth Report said so" (and because it suits the MoT) and to ignore other suggested changes in the Unsworth Report because it doesn't suit the MoT. We would like the Ministry to investigate this proposal and publish a report. Such a report should not tell us why it can't be done, but should tell us how it will be done, and when.

It is also not good enough to quote, in defence, the next paragraph of the Unsworth Report which says, "The introduction of smartcards will ultimately remove the need to bulk purchase PETs, as the ticket can be automatically loaded onto a smartcard when a passengers first enters a bus, railway station or ferry, reducing the potential for on-board delays." This is no improvement on the current system. There is no delay now when a PET is used on a bus for the second time in a day, or for the first time on a bus if it has previously been used on a ferry or train. Secondly, not every pensioner or senior will have a smartcard.

Nominal Fare Scale. CityRail used to, and perhaps still does, maintain a nominal fare scale as well as its actual fare scale.

To explain - say a fare is $10.00 and an increase of 8.1% is awarded. The nominal fare then would be $10.81, but CityRail might charge an actual fare of $11.00. Next year, if a 5% increase is awarded, the increase should be calculated on the nominal fare (5% of $10.81 = $0.54) and not on the actual fare (5% of $11.00 = $0.55). The new nominal fare would then be $11.34 and not $11.55. A fare of $11.55 might tempt the operator to round it up to $12.00, but a fare of $11.34 should be rounded down to $11.00.

It is easy to see how, over time, passengers could be conned out of large sums by all these rounding-ups on the wrong figure.

The Ministry must ensure that percentage increases on bus fares are based on a nominal fare scale, and not on rounded-up actual fares.

Railway Square Kiosk. This transport information kiosk has been open since September 2000 and has yet to sell its first ticket. It also keeps office hours (9 to 5), closes for lunch, and shuts at weekends. We would suggest that longer opening hours and the ability to sell tickets would greatly improve the efficiency of buses using this very busy and strategic bus station.

Bus & Coach Association (BCA) Submission. The submission quotes cost increases of 5.61% and presumably seeks fare increases to cover this. The MoT seeks a CPI + x fare rise, 'x' representing service improvements. The current CPI is in the order of 2.0% - 2.5%.

The BCA's 5.61% increase is composed of bus capital costs (0.87%), people costs (2.03%), insurance and registration (0.04%), bus lubricants (1.95%), repairs and maintenance (0.27%), and other costs (0.45%). It is not clear how much of this is attributable to "x" (service improvements - better buses, more frequent services, etc) but it probably is not much, and probably nothing like three percent on top of the CPI.

Absence of Submission from CityRail. Once again CityRail has not made a submission to the review. APT appreciates that rail fares are again not under review, but nevertheless, we thought that CityRail might have contributed to the debate. CityRail relies on private and government buses and ferries for much of its patronage, and CityRail shares in the revenue from DayTripper tickets and from most TravelPass tickets.

NightRide Fares. We are curious to know whether these fares will increase because they are bus fares, or whether they will stay the same because they are train fares.

Concessions Review. Some of the concessions on offer, and not on offer, need to be reviewed. For instance: We appreciate the reasons for these decisions (and others like them), but the authorities seem to go out of their way to make life difficult for the vast majority of its customers in attempting to prevent abuse or even "generous discounts" by a miniscule minority.

The Final Say. The customers will pass their ultimate judgement in March 2007.

Conclusion We will be happy to provide IPART with any further information on the above or other aspects of the fares review.
Please contact me on 9516-1906 if you have any further queries.
We have no objection to this submission being made publicly available.
Yours faithfully,

Allan Miles
Assistant Secretary
Action for Public Transport (NSW)