It’s sometimes argued that the best way to charge for public transport is with distance-based or ‘point to point’ fares, similar to taxi fares. This is said to be the most ‘fair’ way of charging, because it most accurately reflects the cost of providing the service. Most recently, this has been suggested in a 2020 report by Infrastructure Victoria.
What this fails to recognise, firstly, is that there is great value in simplicity. Systems whose fares are easy to understand are more attractive to passengers than systems with complicated fare structures that vary from one trip to the next. As previous debates over timed local phone calls have shown (and more recently, the popularity of ‘block rates’ for long distance and mobile calls), people feel better about spending money on services when they know in advance just how much it’s going to cost. So while ‘optimal cost-reflectiveness’ is fine in principle, in practice it’s just as important that the system be simple.
Of course, the simplest of all fare systems is a flat fare irrespective of journey length, such as exists on the New York subway. Since 2015, when Zone 1/2 fares were made equivalent to the lower Zone 1 fare, there has effectively been a flat fare for travel across Melbourne.
But in a city with Melbourne’s geographical spread, it’s arguable the disparity between the shortest and the longest typical journey is too great for flat fares to be a reasonably fair method of charging. The same relatively high Zone 1 fare (now over $4) applies for a trip to the local shops in Moonee Ponds or Glenhuntly as for a journey of almost 100km from Sunbury to Pakenham. (‘Short trip’ and ‘City saver’ fares that provided discounts for some shorter trips in Zone 1 were progressively abolished with the introduction of Myki.)
Historically in Melbourne the need to trade-off simplicity and fairness led to the zone system, which introduces an element of distance charging while keeping the number of different fares low. Almost all large cities with successful public transport operate some kind of zone-based fare system.
Nor is it necessarily more cost-reflective to charge purely by distance. Public transport has high fixed costs and low marginal (per-passenger) costs relative to car travel, so arguably the ‘optimal’ way to charge for public transport is with a significant ‘flagfall’ or ‘service charge’ component, similar to that on utility bills. But as soon as you include a component like this, the actual fare calculated for trips of varying distance is very similar to what our pre-2015 zone system charged anyway. All one gets is a more complicated way to achieve the same end result.
Distance-based fares also undermine multi-modality by making the fare dependent on the specific routes available to get from A to B, which are entirely beyond a passenger’s control. Those fortunate enough to have a direct route to their destination effectively pay less than those who have to transfer, since the transfer point is often not directly on the way. Easy and attractive transfers are essential to the creation of an efficient public transport network, but distance-based fares often create an unnecessary penalty for transferring.
None of this is to say that our system has ever been perfect. While the 2015 fare changes may have been something of a blunt instrument, that still overcharges for short trips (especially in Zone 1), it has largely addressed key problems with the system it replaced:
- The overall level of fares was too high, costing more than petrol for many journeys. This was only partly remedied by the abolition of Zone 3 in 2007: passengers who do not cross the old Zone 2/3 boundary still paid as much as they always have.
- The increment from a one-zone to a two-zone fare was too high, imposing a stiff penalty for crossing the zone boundary (arbitrarily placed at a distance varying between 12km and 20km from the city, with a very narrow overlap). So while a 22km trip from Box Hill to Belgrave on Myki money in 2014 cost $2.48, a 6km trip from Box Hill to Camberwell cost $6.06 – two and a half times as much!
- There were anomalies with specific journeys near zone boundaries. While some of the more bizarre anomalies were fixed in 2009, it was perplexing that (for example) a journey from Monash University to the city could be done in Zone 1 starting from the south side of the campus, but required a Zone 1+2 fare starting from the north side (which is closer to the city!).
(Meanwhile, anomalies introduced by the extension of Myki ticketing to part of regional Victoria have not been addressed. Most blatantly, V/Line trips that do not include Melbourne Zone 1 receive an automatic 30% off-peak discount – but only if the trip crosses more than two regional zones. This means that a two-zone V/Line trip (say from Little River to Corio) costs 66 cents more than a three-zone trip from the same point (say from Little River to Marshall). Yet, just as with the anomalies within Melbourne, this would easily be remedied through a more consistent application of the fare rules without abandoning the principle of zone-based fares.)
The PTUA has long argued for revision of the fare scale and boundaries so that public transport is a financially attractive alternative to car use and so that travellers in the vicinity of zone boundaries are not penalised by the system. It could mean having a larger number of zones in Melbourne, but with a greatly reduced fare per zone, such as in Vancouver (where a three-zone fare cost less than our old two-zone fare). This would make the system fairer. But it does not require fiddling with the basis of the zone system, which is fundamentally sound.
Last modified: 28 March 2020