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Thoughts about the relationships between transport and the urban area it serves

Paying for ‘Free’ Transit

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Dave Olsen’s five part series ended on Friday and I have been wondering how to respond.

I tend to agree with what he says the professional consensus is: that a fares free system is one that no-one values. In our society, price is an indicator of quality. For example, my local supermarket has many cleaning products, but a whole special shelving area is set aside for new “green” products all of which have one thing in common. They cost a great deal more than the conventional ones. Similarly a number of heavily advertised products are remarkably expensive: for instance the CLR bathroom cleaner is priced at around $12 compared to the average competitor at around $3. Obviously the signal that the maker is trying to send is that this product must be far superior than the cheaper everyday ones. Pricing has very little to do with cost.

He also points out that at present users do not pay to use the roads. And I think that tends to support my stance. Roads are over used exactly because they appear to be free. As long as people walked or rode on push bikes that didn’t matter but once they insisted on travelling in tons of steel, we got troubles! We should indeed devise methods for charging the social cost of road use – including the delay imposed on other road users, the environmental impact and the cost of the road itself. And we certainly should never, ever allow free parking on public roads. They cost us far too much in land alone to allow for such wasteful use. In Tokyo you cannot even own a car if you do not have an off road parking spot (and this in a country that actively encourages its car building companies with heavy penalties for operating older cars).

Mostly my approach says that if we have an extra dollar, where would we spend it first? Not on cutting fares, as that does very little good. Improving service should always be the number one priority. As long as demand exceeds supply (as it does here) we have to tackle needs first – basically more buses and trains. I enjoyed his usual sniping at Translink’s costs. As expected, bloated bureaucracy and transit police are targets. Well, without the limits that fares impose, I think we would need many more transit police on a free system – for crowd control, if nothing else. Oddly enough he does not point out that transit costs are 80% wages and wage related.

The real issue that is not dealt with is how do we increase the market share of transit – not ridership, but share. That means getting people out of cars. Fares do not deter car users from using transit. The biggest component of generalised cost is in vehicle time. The car is always available whenever you want it (no waiting) goes where you want it to (no transfers) is comfortable (no standing, no other passengers to deal with) and you can do what you want (smoke, play the radio loud …). Frankly even if you could deal with these kind of issues many people will never switch modes. So transit very properly concentrates on how to win over those willing to change. And those people just want better services. More frequent, more direct, more comfortable but not necessarily cheaper than they are now.

I do agree that we need to find better ways to pay for transit. And as long as we have a bus dominated system that means we need to have some money dedicated to the right of way. I would rather see dollars spent on bus priority – indeed in Vancouver their major road network (MRN) is essentially complete and they want to spend their MRN money on bike and pedestrian facilities. So if Translink took my advice (they never did but it won’t stop me offering it) they should use an approach which allowed spending on bus priority measures in parity with other off MRN programs for other users. Especially if road space is reallocated to higher density use than SOV. This is simply based on numbers of people moved per hour per lane – which buses (and trams) do much better than cars.

The main thing that is wrong with the Olsen approach is that it starts off with a solution, and then looks for evidence to support it. If he had started with an open minded inquiry into what is wrong with urban transportation, free fares would not have been considered very long. It doesn’t help much. It costs a lot, diverts walkers and bike riders onto transit, and does nothing to win over car drivers. It is the wrong thing to do.

Written by Stephen Rees

July 16, 2007 at 4:08 pm

Posted in Economics, transit

9 Responses

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  1. Completely agree with you here. Free transit is one of the last things you would do to improve the system, especially in Vancouver. There is a case to be made to cut down the current fare pricing, but going free is not yet an solution whose time has come in these parts. Heck, the provincial government isn’t willing to hand over more dollars to Translink as it is, and that would surely fix that largest issue with the GVTA: sustainable funding.

    Paul Hillsdon

    July 16, 2007 at 11:07 pm

  2. I’ve been looking forward to your thoughts; I agree completely, especially with what the real priorities are in Vancouver. Even if there were another 2 cents of fuel tax transferred to TransLink, I’d have a hard time saying that fares should be rolled back to 2002 levels; I’d benefit far more from the buses, rail cars, operating hours and priority measures that money could buy.

    I found the comparisons to ‘free’ systems to be specious at best. You really can’t compare either a largely rural area or a compact European city of 70,000 to Vancouver and the sort of operation needed to provide the service we have here. In the former, public transit is a last resort and in the latter, you can deliver decent service with 40 buses, especially when trips are more likely to be made on foot or bike. Tax and budget models are also wildly different across borders, so telling me that Hasselt forks over 1% of its budget to transit is very interesting, but pointless when talking about Vancouver and its proportionately smaller budget.

    (Whidbey’s service sucks by our standards; 30 and 60-minute headways with skeletal evening/Saturday service isn’t going to be useful to anyone with an alternative.)

    That’s where it comes down to for me; I want transit service that is convenient and reliable enough to draw in those who could drive, and that costs real money. Better service does draw in new passengers; I recall a 1999 survey of 99 B-Line riders that found roughly 30% of its riders had switched from single-occupant vehicles.

    Other than that, I found that the shots at bureaucracy were ill-founded; even the rant about the cost of collecting fares happily muddled capital and operating costs, leaving us no more informed about what it costs to collect fares. (Left unsaid was that collecting through other taxes is not free.) All told, it might have been a good exercise at throwing an ideological bone at the Tyee’s audience, but Olsen’s series was otherwise a failure.

    Ian King

    July 17, 2007 at 10:21 pm

  3. Actually, Translink has a nice little sideline – selling rolled change at a price below the banks. Cash handling and related security issues do incur higher costs than other fare collection methods, which is why Translink has been promoting passes for a long time now. One day we will get smart cards, but the upfront capital costs are currently too high to make the investment worthwhile. The major benefit of smart cards (that are swiped on the way in and on the way out) is that there are much better records of trip making, which makes running and planning the system much more effective at meeting demand. It would also mean the end to the zonal fare system which, like democracy, works well enough for now but is a pretty crude way of dividing up the market.

    Stephen Rees

    July 18, 2007 at 8:15 am

  4. I have been driving buses in the Greater Toronto Area (GTA) for over 42 years. I for one would dread a “free fare” fare system. It would attract the lowest of the low life to come aboard and make it their living area for the day.

    Andy Grant

    July 20, 2007 at 3:10 am

  5. Stephen, I like your comment about smart cards. I agree that they would have a huge benefit in reducing the costs of handling cash. However, they are expensive as you mentioned. It still baffles me that TransLink decided to spend $27 million on getting our current fare boxes when there were already examples of touchless smart cards in operation around the world (Hong Kong and London). The current fare box is slow. People are confused on how to put the cards in correctly. Drivers are sometimes confused about which buttons to press. To me, they are $27 million worth of glorified coin counters.

    As for free transit, I like the idea, but it would likely never fly properly. The problems free transit would incur might be worse than what we’re dealing with now.


    July 20, 2007 at 2:42 pm

  6. The story of the fareboxes is long and involved. But they can have card readers added to them – and i used the word “swipe” but these days “proximity readers” are the thing. They do produce scads of data, but for a long time this was just another source of friction between the finance department and the planning department. It may all have been resolved in the years since I left.

    London and Hong Kong are both several orders of magnitude bigger than the Vancouver transit system, which is why the economics of smart cards work there and not here – yet. It would be different if Canadian financial institutions got interested in small transactions, but at the moment that market seems to be most attractive to cell phone companies. How about paying your bus fare by cell phone?

    Stephen Rees

    July 20, 2007 at 4:17 pm

  7. By cell phone is not my ideal choice because it has specific information about attached to it. I like the smart cards because if I keep it unregistered, it’s just an electronic change pocket for me. Registering the card gives the company specific info about me that I might not feel comfortable with. The cell phone would definitely have that information attached to it.

    After using a smart card in Hong Kong, it’s hard to go back to this system. I just find it so convenient to use. It just makes a lot of sense to me. But you’re right about the size of the transit system. Maybe we’re just not big enough to support such a system.

    The only thing close to a smart card I’ve seen lately is at Tim Horton’s where they’ve teamed up with MasterCard to set up an EasyPay system with proximity readers. So I’ll keep dreaming until it becomes the technology becomes more ubiquitous in Vancouver.


    July 20, 2007 at 9:38 pm

  8. […] Tyee publishes its summary of the responses to the Dave Olsen series. It pretty much repeats what I wrote here two weeks ago.  In general it has not worked well in larger cities that have tried it, and it is […]

  9. […] Regular readers here will know that I do not think this is a good idea. Neither did the people of Geneva . Though it was a bit of a surprise that Frank Buckholz thought our fares were a bargain. But this idea keeps coming back. […]

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