September 2020 Fair Move Better Public Transport Fares for Melbourne About us Infrastructure Victoria is an independent advisory body with three functions: \ preparing a 30-year infrastructure strategy for Victoria, which is refreshed every three to five years \ providing written advice to government on specific infrastructure matters \ publishing original research on infrastructure- related issues. Infrastructure Victoria also supports the development of sectoral infrastructure plans by government departments and agencies. The aim of Infrastructure Victoria is to take a long-term, evidence-based view of infrastructure planning and raise the level of community debate about infrastructure provision. Infrastructure Victoria does not directly oversee or fund infrastructure projects. Aboriginal acknowledgment Infrastructure Victoria acknowledges the traditional owners of country in Victoria and pays respect to their elders past and present, as well as elders of other Aboriginal communities. We recognise that the state’s infrastructure is built on land that has been managed by Aboriginal people for millennia. Fares that reflect the Contents time and place of travel 35 Peak use contributes to an unbalanced network 36 New peak fares 39 Executive summary 04 Locational peak fares 42 Directional peak fares 45 Introduction 10 Will peak pricing make any difference? 46 Recommendations 12 Ticketing that supports reform 52 Problems facing public transport 16 Ticketing that reflects fare reform 53 Problem 1: The public transport system A more flexible ticketing system 54 is under strain and out of balance 17 Open up third-party access to the Problem 2: Fare setting objectives are public transport ticketing system 55 not clearly defined, fares neither encourage Make the ticketing system easier to use 57 the best use of the system nor inform choice 18 Problem 3: Public transport fares are unfair 19 How will users respond to variable fares? 59 How well do users understand fare elements? 60 Principles 20 As complexity increases, comprehension declines 61 Presenting and communicating change 62 Improving how fares are set 22 Balance multiple outcomes to make the best use of the transport system 23 The benefits of change 62 Consider equity 25 Fare reform shifts demands on the transport network 68 Provide informed choice 26 Who changes their travel when offered greater choice? 70 Transparent fare setting 26 Who benefits the most from fare reform? 71 The way forward 26 How does fare reform change the cost of public transport? 74 How does public transport demand Fares that reflect the shift across Greater Melbourne? 76 mode of travel 28 How does demand across the network Flat fares are simple, but don’t make the change with travel patterns? 78 best use of the public transport system 29 Flat fares are unfair 31 Where do we go from here? 84 More services alone are not the solution 32 Fares for multimodal trips 33 References 86 Executive summary The COVID-19 pandemic has disrupted almost every aspect of Victorians’ daily lives. Stay-at-home orders, social distancing requirements and greater numbers of people working from home mean that public transport use is down and private car use is up. Fair Move: Better Public Transport Fares for Melbourne Fares Fair Move: Better Public Transport However, at some point, restrictions on In that report, we called for pricing of the Fare reform can also be fair reform. the way Victorians connect and travel entire transport system across roads, While the top 20% of income earners will be eased and removed, migration public transport and parking. We also make up the largest group of public to Victoria will resume and Melbourne’s acknowledged that this would take some transport users overall, fare reform can public transport system will be under time to implement. In this report, we focus significantly improve travel choice and pressure again. Instead of drifting back solely on public transport fare reforms that affordability for low income travellers to ‘normal’, there is a unique opportunity could be implemented in Melbourne in the and households. to undertake fare reform so that when short to medium term. Melburnians return to public transport, We propose a fare structure that the network is better balanced, better Melbourne’s public transport system faces maximises the use of the public transport managed and operates more efficiently three major problems: it is under strain and network so that it generates the most and fairly for the benefit of all Victorians. out of balance (being overcrowded in peak benefits to Melburnians, whether they times and underused at other times); fares use public transport, private vehicles While COVID-19 has hit the Victorian are not set to encourage the best use of the or active transport. Infrastructure Victoria Infrastructure economy hard, it has also created greater system or to give public transport users flexibility in work and commerce, generating greater choice about how and when they Fares make up only a part of the public behaviour change that can have lasting travel; and the current fare structure is transport system, but they have the ability benefits once the pandemic has passed unfair. The system also has limited ‘slack’ to support Melbourne in getting the most (such as reduced congestion from more to cover disrupted services, meaning that out the infrastructure it has today, as well flexible working hours and increased cancellations, problems with vehicles, as the infrastructure of tomorrow, such working from home). A well priced public incidents and other delays quickly ripple out as Metro Tunnel. transport network can help lock in some of across the network, affecting thousands Fares, new infrastructure and service reform those benefits and take pressure off the of commuters. These problems are likely can all work together to help meet the entire transport network. to continue even as Victoria rolls out major growing travel needs of Melburnians. new transport infrastructure investments. Public transport fares fall within the And right now, while the pandemic broader transport network pricing Fares are a powerful tool for addressing continues, fare reform can support social framework presented in Infrastructure these problems. Fares can be set to make distancing by encouraging off-peak travel Victoria’s previous report Good Move – the best use of the entire transport system and better use of underused services, Fixing Transport Congestion. (roads and public transport). They can such as buses. provide incentives for people to change their travel behaviour and make the best travel choices for themselves, as well as for the wider community. 04 Our recommended reforms: Executive summary Fares that vary by mode of travel Having different fares for different times This balance needs to be transparent, using and places would encourage travel in the clearly defined objectives determined by the Introduce different fares for each off-peak periods, making more efficient Victorian Government, with an independent public transport mode to reflect the use of the network and reducing crowding. body to advise on and monitor transport different costs and benefits of each prices (like IPART in NSW). It would also support social distancing Victoria Infrastructure mode, and to encourage the best use on public transport while the COVID-19 To see the effects of fare reform over time, of public transport services. Fares would pandemic persists. be lowest for buses and slightly more for we have modelled how things would look trams, with trains being the highest priced Consistent with our transport network in 2031, comparing the current flat public of the three modes. pricing approach that all modes and routes transport fare structure to one that provides should be priced, we also recommend stronger incentives for making better use Currently, buses are overpriced and removing Melbourne’s free tram zone. This of the network. underused, which impacts people on low free zone fails to price travel in a busy tram incomes the hardest − as trains and trams corridor that is already at capacity. It is also are used disproportionally by people on unfair, as it largely benefits a relatively small high incomes. Our research shows that group of people − those who live in or drive if buses were cheaper than trains and to the CBD − while all Victorian taxpayers trams, many people would make the foot the bill, regardless of whether they use switch to buses. the free tram zone or not. There is also no evidence that it increases tourism. Fares that reflect the time and place of travel Better ticketing Introduce peak and off-peak fares on Alongside this new fare structure, we are trains, trams and express buses in recommending ticketing reforms to make places and at times that are at capacity. the system more convenient and fairer, Congestion and the cost of expanding and allow for the introduction of new the train network in and around the digital platforms for planning, booking CBD is greater than the rest of the and paying for travel. network, so when CBD public transport Improving how fares are set travel patterns return to pre-COVID-19 levels, we also propose creating a new Public transport fare setting needs to ‘City Zone’ on the metropolitan train balance multiple outcomes to make best network, covering the CBD, City Loop use of the network and improve fairness. and Metro Tunnel. 05 The potential benefits of public transport fare reform Fair Move: Better Public Transport Fares for Melbourne Fares Fair Move: Better Public Transport Our modelling was done pre-COVID-19, we have identified include: but the outcomes will hold assuming Melbourne’s transport patterns return to normal. We are currently doing a range of More people using Fewer cars on Melbourne’s roads modelling to investigate how COVID-19 public transport Decreasing traffic volumes along some might change the travel and land use of Substantial shifts to public transport of Melbourne’s busiest arterial road links, Melbourne into the future, and how across Melbourne, especially in the relieving pressure on the road network and transport reforms and infrastructure middle and outer ring of suburbs.