Lifting bus fares is not an unreasonable step

Tuesday, 3 December 2024

In the past financial year, ECan’s private revenue share from the Metro service was just 13.9%, writes Mike Yardley (File photo).

Mike Yardley is a Christchurch-based writer on current affairs and travel and a regular opinion contributor

OPINION: How much should you be prepared to pay to board a bus? Environment Canterbury’s (ECan) Metro public transport services and their $2 flat fares appear destined for a head-on collision with the New Zealand Transport Agency’s (NZTA) expectations for increasing the share of private revenue.

Previously known as farebox recovery, private revenue share not only calculates revenue raised from fares, but all other revenue streams, like on-board and bus back advertising.

However, the lion’s share of private revenue is drawn from passenger fares. Since June 2023, Metro’s greater Christchurch network has been running a $2 flat fare trial and $1 concession fares. It’s widely credited for driving up patronage numbers to a post-earthquake record.

One 270-metre stretch of bus lane on Riccarton Rd operates at all hours, rather than the usual weekday, peak time arrangement. Resident Simon Taylor says it's bizarre in a city without 24 hour buses.

In the year to June 30, 2024, nearly 14.5 million Metro passenger trips were taken, up 2.8% on the previous post-earthquake record of 14.1m passenger trips in 2013/14.

In addition to the cut-price fares, network reliability improvements and increased service frequency have also boosted uptake. But despite the enormous surge and spread of greater Christchurch’s post-quake population, Metro patronage still hasn’t beaten its pre-quake record of 17.2m passenger trips, in 2009/10.

NZTA is proposing private revenue share targets for every public transport authority, including ECan, over the next three years.

In the past financial year ECan’s private revenue share from the Metro service was just 13.9%, with public funding footing 86.1% of the costs! (Crown/taxpayer funding accounts for 46%, while the ratepayer contributes 40%.)

NZTA is proposing increasing ECan’s private share target to 18% for the current financial year, then to 25% over 2025/26, and to 28% in 2026/27. That’s hardly onerous. After all, ECan’s private revenue share previously stood at 37% in 2009/10.

As recently as 2019, it was still at 28%, but then the previous government rescinded the farebox recovery targets and private share revenue went into freefall, in favour of ever-larger subsidies. It’s also one of the reasons your regional council rates went up an odious 17.9% this year.

ECan chair Craig Pauling says the NZTA’s proposed new private revenue targets “would be extremely challenging for us to meet”.

ECan chair Craig Pauling is less than impressed by the NZTA’s proposed new private revenue targets. “The targets would be extremely challenging for us to meet,” he says.

ECan’s Public Transport Services Director Giles Southwell is understandably anxious about trying to increase public transport use while also grappling with increasing costs and NZTA’s targets.

“We’re currently reviewing this information to understand what this means for our services,” Southwell tells me. But the clock is ticking, with ECan and the NZTA expected to agree to some revenue targets by December 19.

Should passengers foot a bigger share of the cost of public transport? I canvassed the views of several regional councillors in Christchurch. Deon Swiggs says “costs have increased nearly 25% to operate the service over the past three years. It’s unrealistic and inappropriate not to reflect this in the cost to use the service.”

David East opposes shouldering the ratepayer with a bigger share of the bill and supports raising fares.

Meanwhile Joe Davies supports “the notion of increasing private share revenue”. However, he is concerned that “higher NZTA revenue targets would make it harder to trial new bus routes since these services need time and flexibility to build ridership”.

Davies cites the success of trialling the Darfield to Christchurch service, which swiftly enjoyed strong patronage, and the introduction of a double-decker bus to meet demand.

However, that 70-minute ride is quite the steal, given it falls under Metro’s $2 fare deal. Surely, in a bid to lift private share revenue, passengers on those longer routes should be paying considerably more.

Similarly, ECan describes its six high frequency routes as “the shining stars of the Metro network”. With a service frequency of 10-15 minutes, higher fares should apply on those premium routes, given the passenger benefits from an elevated service.

Auckland, Wellington and Dunedin’s public transport authorities all currently gather nearly double the level of private revenue share ECan’s Metro service does.

Public transport will never clean its own face – nor should it be expected to. But lifting fares and private revenue streams to help pay for a third of the overall service costs is not an unreasonable expectation.