Integrated fares, integrated tickets, integrated network

Posted: June 17, 2013 in Transport
Tags: , , , , , , ,

Sydney still lacks true integrated fares. In Melbourne, a single ticket allows you 2 hours of unlimited travel within a certain zone. You then decide how to get from your origin to your destination, what sort of vehicle or combination of vehicles. In Sydney, passengers are generally penalised financially if they transfer from one vehicle to another (unless it is from a train to another train). Someone travelling from Enmore to Circular Quay would be better off changing at Newtown for a train (as would the network as a whole as it would allow the removal of buses from the CBD), but doing so requires paying for an additional train ticket or upgrading to a more expensive myMulti ticket and so virtually all stay on the bus the whole way.

Image: Adult Opal smartcard Source: Transport for NSW

An adult Opal smartcard (Source: Transport for NSW)

One possible solution, possible now that the Opal smartcard is being rolled out, is to charge passengers based on the total distance of their journey (point to point fares). It wouldn’t matter which, how many, or what combination of vehicles was used, the fare would remain the same. Alternatively, the existing zonal system used for myMulti tickets could be retained (zonal fares), but set at the same price for single or multimodal journeys. To do so for either the point to point or zonal methods means changing the relative fares of single mode and multimodal tickets. This is a relative change, so it could be an increase in the former, a decrease in the latter, or a combination of both. Further cuts in fares is difficult, due to a falling farebox recovery ratio (explained below using the example of Cityrail).

IPART sets fares so that farebox recovery (what passengers contribute in fares) is roughly 28% of Cityrail’s efficient operating cost, but none of the capital cost. So things like the North West Rail Link, South West Rail Link, and new Waratah trains are paid for entirely by the government, but things like staff salaries or electricity to run the trains are partly paid for by ticket sales and a government subsidy. The efficient costs refers to the total operating costs less any non-fare revenue (government concessions, rental income, etc) received.

This 28% target has not been met in recent years. It was 27% in 2008/09, falling to 25% in 20011/12 (Source: Review of maximum fares for CityRail services from January 2013, IPART Nov 2012, page 13).

There were a number of reasons for the drop. The introduction of myZone in 2010 saw a number of fares cut, but almost none increased. No fare increased was made for 2011, though the following year’s increase was a double up to make up for that. The current government has promised no fare increases above CPI without any improvements in services, and has stuck to the CPI limit since 2011. Also in 2011, an additional discount of 9% was provided on periodicals (monthly/quarterly/yearly tickets).

More recently, the government effectively increased fares for ferries by removing them all from Zone 1 and some from Zone 2 in the myZone system, forcing myMulti users up to a myMulti2 or myMulti3 if they wanted a multimodal ticket. The current Opal fare system also does not include periodicals, which if retained could increase fares for some by hundreds of dollars a year. However, most fares will remain cheaper under Opal than under the the current magnetic stripe tickets, particularly for off peak users.

So if cutting fares further is difficult, assuming a limited transport budget that is not increased, then the government would have to increase fares in order to achieve integrated fares. Recent reports suggest that this is not the government’s priority, and that there remains a preference for charging different fares for different modes due to the varying cost structures of different modes. Some minor improvements have been made – such as integrated fares for a single mode (e.g. ferry to ferry, or train to train while temporarily exiting the station), or the daily $15 cap and weekly free travel after the first 8 trips.

This might be enough for now, but will create problems come 2019 and 2020 when the North West Rail Link and South East Light Rail Line are opened. These two projects will in part rely on feeder buses and passengers transferring to second mode of transport in order to reach their final destination. This integrated network approach is a more efficient one, allowing a higher capacity of passenger movements along a central spine using rail based transport. But it needs integrated fares to be truly successful.

The danger remains that Sydney will get integrated ticketing and an integrated network, but no integrated fares.

  1. BigE says:

    Melbourne had time-based travel within Zones even before Myki. It’s a great way to avoid penalising users for poor system design. If you want to encourage casual use of the network, allowing people to move between networks seamlessly is a no-brainer.

    On the other hand I struggle to find anything positive as a PT user about Myki. Given the long list of other important PT projects, I just don’t understand why Opal/Myki even get considered.

  2. Perry Stephenson says:

    If you’re a clever engineer, looking at the roll-out like a clever engineer would and identifying the risk that by attempting to integrate fares as well as roll out a swipe-card system simultaneously, you’re likely to hit some fairly complex problems along the way and likely end up failing like the T-Card did.

    Instead, if you focus on the technical issues surrounding a swipe-card roll-out, complete the roll-out quickly and within budget and get 12 months of operations for troubleshooting post-launch, you’re in a much better place to focus entirely on the integration of fares using your new, stable, real-world tested ticketing platform. Also you’ll have 12 months of adoption by the public and hopefully high numbers of users.

    I know it can often by politically difficult to try and explain engineering considerations to the public (especially when they start trying to use that logic against you in letters to the editor) but I’d suggest this is the real reason they aren’t doing both at once.

  3. MrV says:

    I notice a theme here and it also apparant with the decision to build NWRL before a second harbour crossing. That is far too much pandering to the pollies who don’t want to make a hard decision!
    The need for integrated ticketing is not new, they have had at least 20 years advanced warning, and yet they have had fingers up bum for the entire period.
    To suggest that it is too much risk for the engineers is utter tripe. What better time to set the new fare system, than with a completely new ticket system. Then you’ll only need a short period for people to migrate between systems and shut the old one down. The new system being sufficiently superior that there are no hangers on with the old system.

    If they can’t get this done in the last 20 years, what evidence is there to suggest it will be done anytime in the next 20?

  4. Perry Stephenson says:

    It’s not “risk for engineers”, it’s risk for the project. There is no hard decision here – I’m sure Gladys would love nothing more than to announce integrated ticketing alongside the Opal roll-out, but it just isn’t a sensible way to deliver a project.

    There are several layers here. The Opal card, the readers, the communications systems, the payment systems and networks are the physical layer. They allow the smart card system to work. There is also a product layer. This is where you maintain a database/system of different ticket types, the pricing for those types, and the access that those ticket types provide.

    I can’t see any compelling reason that you should work on both of these layers at the same time. I can’t see any efficiency benefits. It will introduce a whole bunch of risks to the project, and not give you any real benefit.

    Sort out the hardware and backend software issues in the physical layer, and get the whole system working with the existing ticket products. I know the government likes to comfort the public by saying “its the same technology as the oyster card which works well in London”, but the fact is there is a substantial engineering challenge to get this system up and running here in Sydney.

    Once you have finished rolling out the upgrades to the physical layer and you have a new solid platform, then you can start work innovating on the product layer.

    I have no doubt the government wants to provide integrated ticketing, but it just doesn’t make sense to do both at once. The T-Card fell over due to issues with integrated ticketing, not issues with the physical hardware.

  5. Simon says:

    But they are still trying to shoe-horn something that resembles the current system into Opal, rather than a sensible system or the same system as they (Cubic) have implemented on previous occasions. I think that’s a pretty poor decision.

  6. MrV says:

    To put things in perspective it has taken the NSW govt more time to implement integrated fares than it took to put a man on moon!

  7. artrlee says:

    After having an Opal card for about a month, I can observe some immediate financial benefits.
    a) money up front – having ~$40 per customer sitting in Transport for Sydney’s bank accounts means that money can be used immediately, whether to simply gain interest or to spend on things like equipment.
    b) More likely to catch a train -> increased patronage -> ??? ->Profit – every situation (3 times so far) I have used my Opal within the CBD I would’ve walked. Not having to buy a ticket has reduced that barrier and as a result I just hop on the train. This would work for suburban areas as well, especially people who would catch the train max 3 times a week, (work at different sites, drive to work sometimes, etc)

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