6 fare options gn final


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6 fare options gn final

  1. 1. Fares Gordon Neilson
  2. 2. 2 Fares
  3. 3. 3 Subsidy Issues • Private vehicle use is heavily subsidised –Fuel subsidies –Free on-street/ on-sidewalk parking o Increases congestion o Forces pedestrians to walk on the streets – dangerous and inconvenient, destroys sidewalks •If private vehicle travel is subsidised then why not public transport? •Political decision – it depends on: – Availability of sufficient funds on a sustainable basis –Opinions on equitability in use of funds
  4. 4. 4 Subsidies and Equitability •If subsidies are to be made- –They should not be open-ended –They should be generally beneficial to the community –They should represent a considered use of tax money – why not education, health, etc? –They should benefit all public transport users, especially the poorer ones and not just TJ users –They should be affordable over the long term •Need for serious policy review of transport subsidies; public transport seems more deserving of subsidy than private cars
  5. 5. 5 Current Fares on non-TJ Buses •Current setoran system requires flat fares other than on small vehicles •Low, system-wide flat fares with no tickets: –Encourages operators to focus on short routes – forces more interchange –Encourages drivers to turn short and not complete their full journey on longer routes –Over-prices short trips and under-prices longer trips, maybe fewer short trips are made by bus? –Not possible to have through fare for trips requiring interchange since no tickets –Does not allow concession fares e.g.,for elderly –No record of revenue or ridership by route for planning and monitoring purposes
  6. 6. 6 Post-Reform Fare Structure Options •Route based fares –Flat fares, step down fares, distance based graduated fares –with or without free / discounted interchange •Start / finish location based fares –Zonal fares – usually mode specific but independent of route –True O-D fares – independent of mode and route •Time based fares –Unlimited travel on network for a specified time period, e.g. 2 hours
  7. 7. 7 Future Ticketing Options •Types of tickets –Single journey, day pass, monthly pass, multi- journey ticket, stored value, etc. •User categories / fare concessions –Regular adult fares –Persons qualifying for reduced fares e.g., children, students, elderly, disabled, etc.? •Payment Methods –Cash to driver or conductor, pre-paid tickets, flash cards, smart cards, NFC enabled devices, etc.
  8. 8. 8 Fare Levels •Average fare is total fare revenue divided by total passengers for all routes in (operator’s) network •If total revenue adequately covers costs, then fare level is currently OK •If total forecast revenue for next financial year does not cover costs then either: –Revenue must be increased –Services must be reduced –Unit costs of bus operation must be reduced
  9. 9. 9 Fare Adjustments •Each financial year:- • Private operator must earn enough revenue to cover all costs and make a reasonable return on his investment. Revenue includes fares and government subsidy, if any. • Public operator must earn enough revenue to meet target set by local authority. •If private operator is to remain viable and if public operator is not to require open ended financial support, fares must be adjusted as required based on agreed forecasts of future financial situation - costs and revenues.
  10. 10. 10 Conclusions •Short Term Options A. No change to current system B. Route specific flat fares based on route distance C. Route specific flat fares with step down fares on longer routes We suggest you consider Option C •Post-Reform Objectives: – Fares should be a function of passenger distance travelled by mode – Free or discounted interchange – Payment by common smart card usable on all modes – Concession fares to be offered – Fare increases awarded in timely fashion