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Public Transport revenues for April

By Matt L, on June 1st, 2014

The Auckland Transport board met last week and while most of the board report didn’t seem overly interesting one part on HOP usage caught my attention. It broke down the patronage by HOP vs paper tickets not just for trips but for revenue (page 31). As far as I’m aware this is the first time PT revenue has been shown publicly – unless it’s been buried somewhere in the financial reports.

As someone who catches both trains and buses the difference between HOP usage is noticeable although that might also be because non HOP payers hold up buses due to slower boarding whereas they don’t impact on the journey times for trains. AT say that considering HOP only finished rolling out to buses earlier this year that the result isn’t too bad however they can’t use that excuse on trains which have been using the system for about 18 months now.

Looking at the revenues and trips per mode allows for an interesting comparison of average costs. As you can see in the table below the average fares for trains are about 37% higher for rail than they are for bus which reflects that on average train users take longer journeys than bus users. This could also be partly seen in station boarding data I wrote about a month ago which showed that stations outside the old Auckland City Council boundaries having generally higher patronage than those closer to the city. The average fares for paper tickets on both bus and rail are 3% and 4% higher than the HOP fares which considering HOP fares are at least 10% less it suggests that on average cash payers travel slightly shorter distances.

Interestingly the average fare of ~$2.20 isn’t all that different to what is seen in the Australian and Canadian cities I’ve looked at. That suggests our fares aren’t completely out of line with what is seen elsewhere in similar cities although

they generally provide better services so you get greater value for your fare

there might be greater differences on individual fare products which affects the averages.

They’ve also provided this graph showing usage although it’s a bit hard to track the history. February showed a big jump across both measures and I suspect that was primarily due to schools being back as NZBus which is the largest operator went live in the last months of 2013.

In addition to above they have broken down the revenues and sales by channel which again provides useful information into how the system is operating.

The average top up amount for stored value is similar across all three channels averaging $30 for face to face, $26 for ticket machines and $29 for online sales. In terms of where the sales happen 39% are face to face, 34% at ticket machines and 27% are online.

It’s great that AT have published this level of data and in the interests of transparency I hope they continue to do so. In addition it would also be great to see monthly information on how far people have travelled (should be easy for HOP cards at least) and how much the operating costs were. I also think that they probably need to do a push to get more bus users in particular on HOP.

49 comments to Public Transport revenues for April

AT HOP usage for both Trains and buses are way lower than should be. Without AT HOP in place for most journeys integrated fares won’t work overly well and will make it harder for people who use the bus as their first trip of a multi-mode journey to buy from the bus driver, thus adding delays..

I also think there needs to be a much higher penalty (cash price) applied for using cash fares – especially on buses as they hold up everyone on the bus, on trains not so much – worst case is if you miss your train because the machine selling paper tickets is slow etc – then really only affects you and doesn’t/shouldn’t hold up the train load of passengers..

One cash paying bus passenger can easily hold up 40+ people – even if they are standing to the left to let HOP card users board while they fumble for the fare – as the driver can’t leave until all cash passengers are issued tickets. Saw that first hand several time last week,
Paying cash for bus/train etc fares needs to become the social equivalent of someone who parks in the bus lane or who farts in a lift, so that people either learn to carry HOP like they carry their drivers license around,.and/or so AT doesn’t need to give any cash change.

So how to tackle this? Well heres a thought, if you give the driver cash for your fare, you get no change, but the change you would have been given (if its above say 25 cents) is still “refundable” – but you have to claim it back yourself, using a code printed on the ticket.

So if you hand over a $20 note, you get your paper ticket, and a code is printed on it for the change balance, which you can refund, either in person where you can buy/top up AT HOP cards, or you can do it online and debit the funds to your or someone elses AT HOP card (don;t care, the refund code is like cash, anonymous and usable once only so its pretty simple and if you lose it, like cash, its gone).

And this is the key point, the refund of those amount onto a HOP card is free of transaction charges – provided you do it at a machine yourself or you do it online, if you do it face to face, you pay the same 25 cents top up fee like anyone else would.

This basically turns slow loading cash paying passengers using paper tickets into a quicker way to load the bus, as no change is given, all the driver does is record the total cash paid, the system does the rest for the balance. Furthermore, the unclaimed funds don’t sit forever, you have a set time, say 60 days to claim it back or the money is kept by AT.

The AT ticket machines at train stations could do the same too – no change given either for paper tickets, and the same claim method is used.

Doing this has two outcomes – those who pay cash, still can, those who do pay cash, and don’t want to hoard all those paper tickets to get their change will soon learn to have the exact change to buy the tickets which itself will help with loading time.
But better yet, will encourage those who can afford it to get a HOP card and to keep it topped up by using those cash fare refunds they get when they run low on cash (or don’t have a credit card for online top ups etc) – but you do all that in your time and not anyone elses when the bus is loading.

Make all concession fares by HOP card only including Gold Card. All cash fares at a premium price and Hop Card fares at a reduced price. Make all Lotto outlets (they seem to be everywhere) as HOP card outlets. Visitors to Auckland could then just buy a card for their short term needs. All of this isn’t rocket science.

Interesting that only around 1/4 of HOP sales are online. For me the auto top up has been a big plus — never have to worry about having enough stored value and never have to queue up to top it up. I wonder why usage of this feature isn’t higher?

It’s actually very easy to recover funds from a lost (but registered) HOP card, just enter you’re new card number on the website. Plus an auto-top up actually makes it easier to have less money in your account at any one time as top-ups are free and automatic, so you could easily never have more than $10 in your account by making the amount so small a top-ups occurs every ride or two.

As for not having a credit/debit card, I suspect the number of people with a suitable card will increase as online shopping becomes ever-more popular. At my bank (ANZ) a debit card is only $10 a year or free if you’re a student, and as well as online that means you can use your eftpos card overseas and have contactless payment.

Hop card access to visitors from the airport. Going north, the first retailer is on onehunga mall, not even the train station machine will sell you a card. Short option would get the Airbus stand to sell hop cards – win all round as you can use your hop on the Airbus (even without any discount) straight away

That would be the last time I’d use PT then, considering I’m travelling almost exclusively in the central city and hence always only 1 fare stage, making it 2.50 would be almost a 100% increase in price.

The MTA in NY has that policyon the subway ($2 flat fare per trip – whether it be 1 stop or 10 stops).

Bear in mind that the above figures are no doubt skewed downwards by child discounts (adult fares more likely t be closer to $3.50 on average).

If adopted right now, I can see the howls of outrage at all these parents saying the $2.50 each way flat fare is too expensive to allow the bus to take little Johny and Jenny to school, so they will now drive.
[Ignoring the fact that just getting the SUV out of the driveway costs about $5 before you add in the per-km running costs, and time and congestion costs to the mix means that PT is still way ahead as the better option]..

Apart from that, keep in mind that “fare recovery” is at best half the equation – this is the revenue or fare-box recovery amount, the Government stumps up the rest (the other half) via subsidies.

So if you had flat fares and PT usage went through the roof little old Gerry and Joyce and English would have a fit with all the “Extra” money they’d be handing over to Auckland to subsidise their PT use.

In any case right now, the system wouldn’t stand the strain – groaning at the seams already, once the new network is in place, then worth considering I guess.

Oh yeah, nearly forgot, and as long as we have a change of Government who will realise that “endless” subsidising of cheap as chips PT trips is way, way cheaper than the alternative of endless subsidies to car use that continuous road building entails…

Yes but then I’d be happy to pay a flat fare of $2 if I had a service like you have in NYC. That’s part of the issue in Auckland, the buses are so unreliable that increasing fares is pretty much a kick in the teeth to those of us that put up with what is a shoddy and poorly run system at the moment. By all means increase them a bit if it means we have free transfers over x hours, that the buses are reliable and frequent. Otherwise it’s just a way to meet the arbitrary farebox recovery ratios that central government has imposed on PT, meanwhile tens of millions of dollars get spent on studies to justify a billion dollar motorway left right and centre.

Hmm, not quite as seamless as you’d think.
See many NY Subway lines (and the stations that they go past) have distinct entrances for each line and direction, and in many stations you can’t connect to adjacent or cross lines e.g. to go down then across without leaving the “line” you came in on and then paying a second fare to go cross town.
[Some stations you can, but not all].

Even entering the wrong station entrance will cost you – e.g. say you wanted to go uptown, and entered the downtown entrance – you’ll have to leave the station, go around the corner (or cross the street), in some cases you can up to a concourse level, then pay the second fare.

And also NY runs express trains so not every train “going your way” stops at every station on the route. So planning is a must.

So NY subway is quite broken in places. Once you know the way round I’m sure you can avoid these mistakes.

.But to access the airport you (e.g. JFK) which has train access – LGA doesn’t) you need a special ticket ala Sydney to get there, so you can’t do a $2 subway ride to the Airport in NY either.

I know it’s not perfect and often has a feeling of being pretty run down but I have spent a lot of time in NY so am quite familiar with it. Regardless my point is more that Auckland’s system needs a lot of work, and at present offers pretty bad value IMO.

You can see why Snapper were so keen to have control of ticketing, those are big sums of money they’d be in charge of and would be privatising a tidy profit that is better used by AT for improving the system.

They wanted to use PT as the loss leader to get their card into as many hands as quickly as possible to be able to on the banking system but yes they would also get benefit from holding the cash stored on cards.

As should AT, the AT HOP card should become the “Transport card” that you use to pay for anything Transport related in Auckland for a start (on and off street parking, fines, PT Fares etc]..

Then it should become the de-facto “Auckland” card that lets you buy lots of small-value items as easily as cash.
The data feed from that step alone is worth the additional overhead to AT to do this.

If AT had that in place, they could show easily (for instance) that car drivers pay for parking with AT HOP, but then don’t shop nearby as much as PT users – who can and do “shop local”.
And that would allow quick and easy decision making on Transport related changes in the Auckland area.

Redo all the cash fares so they are round numbers. I don’t really care about getting 10c back on a $1.90 trip (I hardly ever carry change, mind). Easier for pax and drivers if it’s just $2 etc, plus revenue positive for AT. I guess changing the cash fares increases the Hop fares but the discount (20%?) can be increased to counteract the cash raise.

Alternatively, have a policy of no change given under 50c/$1. I know in San Francisco you have to pay the exact amount with no change given (wouldn’t work here due to NZ’s being a more “cashless” society than America, also works better with a $2 flat fare structure).

It’s a nice start. I hope this is the beginning of a rebalancing of fares towards HOP. And great cash fares are nice and rounded. Great of the Herald to put their normal positive spin on it. For most PT users this isn’t an increase at all.

What concerns me is that based on a very conservative 10% fare evasion rate for trains, that is around $200, 000 of revenue that is being lost in one month, or around $2.5m per annum. That is a lot of money, and I bet it is only part of the story.

plus you miss out on that patronage. Of course not all fare evaders would continue to use the trains after the loopholes that allow them to do so are closed, but many will – which is quite important when you consider progress towards CRL targets. 18 million recorded versus 20 million actual.

How is that being very conservative when it’s almost double what AT have stated on multiple occasions they think fare evasion actually is. You’re not being conservative you’re pulling numbers out of thin air.

Matt, just need to clarify this comment: “Looking at the revenues and trips per mode allows for an interesting comparison of average costs. As you can see in the table below the average fares for trains are about 37% higher for rail than they are for bus which reflects that on average train users take longer journeys than bus users.”

The fare difference is less bus versus rail than it is RTN versus normal PT. More specifically, if you were to split the revenue data for the Northern Express then you’d likely find it had an average fare of between $4-$5. And a cost recovery in excess of 100%. The high fares on the NE reflect 1) larger proportion of adult users and 2) long distance trips.

As an aside, I think 61% HOP penetration this early on with only a 10% discount reflects just how good things are going to get in Auckland. I’d expect that over time and with some further incentives you would see HOP penetration reach 90%. At which point we can seriously start to debate the merits of getting rid of paper altogether. I don’t we’re there yet, but things like contactless credit cards and more importantly mobile phone payment technologies are increasingly popular/sophisticated and provide a viable alternative to HOP for casual users.

It is much easier to evade fares on buses when paying cash so that could also be a reason for lower bus fares. Paying cash for 1 or 2 stage and riding 2 or 3 is very easy and possibly common on crowded buses. There are also ways for evading with Hop cards, eg there is no need to prove ownership of the card and your personal status when boarding buses or trains, so theoretically you could be using a family member’s student or gold card, but I am sure AT are aware of that.

Why can’t we top up our AT cards with phone banking- most other services and companies make the effort to enable their customers do so. I see from the above comments that many people don’t have the internet. (40%). A large proportion of that 40% would also use public transport. The person who designed the administration must have just qualified with little experience of being a public transport patron in a developed country. If they had any customer insight they would realize that there are many aspects of the way that these services are provided which cause unnecessary frustration for patrons.

It’s already extremely simple to top up, do it at a machine using cash or card, or at a customer service desk, or do it online. The auto top-up feature is perfect, set it up and you can simply forget about ever needing to do it again. AT doesn’t need to waste time adding extra ways to add money, they need to spend those resources on setting up integrated ticketing.