Common Urban Myths About Transport

Myth: Melbourne's fares are comparatively cheap

Fact: Melbourne's fares have for many years been the most expensive in Australia. Thanks to above-inflation fare rises over the last decade, public transport for many trips now costs much more than petrol in the car, even after the abolition of Zone 3. Fares need to reduce if public transport is to become competitive with car travel.

Most people who use public transport in Melbourne harbour no illusions about how expensive it is, particularly for casual users (which most people are when they try public transport for the first time). There is little question that fares need to drop - and not just in the outer suburbs - in order to make public transport competitive for those who own cars. Yet the view is sometimes expressed that Melbourne's fares are cheap, or even that public transport is undervalued in Melbourne and its users ought to be paying a lot more.

It's an idea most commonly expressed by people who don't use public transport, by private operators keen to maximise their revenue, or by government bureaucrats who have convinced themselves that Melbourne's system is among the best in the world and ought to be priced at a premium.

This last notion can be dismissed quite easily. Some parts of Melbourne's system work passably well, but on the whole, by world standards our system is atrocious. It's because of the poor standard of service that the vast majority of Melburnians not only don't use public transport, but have perfectly valid reasons for not using it. The inadequacies of Melbourne's public transport are documented extensively on this page.

But it's not just those in officialdom who think Melbourne public transport is cheap: hence the need for this page. The following letter to The Age gives the gist of the argument:

The claim....that public transport is not competitive with car travel does not match my experience. An all-day public transport ticket to the city would cost me $12.60. If I drove the 100 kilometres round trip at a cost of 12.8¢ a kilometre, it would cost me $12.80. Adding standing costs at 7.6¢ a kilometre would bring the total cost to $20.40. Add in parking and you can see that public transport is cheap.
Add in depreciation and public transport is dirt cheap. But I still go by car because it is door-to-door, quicker and more convenient.
---Chris Curtis (Langwarrin), The Age, 29 June 2006

What this letter does quite well is set out the quite special conditions under which public transport is reasonably price-competitive with car travel (if still unattractive for other reasons). If you commute a long distance to work, and you pay for CBD parking, and you can avoid the need for a car (or additional car) by taking public transport to work, then it's worth your while financially to use public transport.

Drop any of these conditions and any price advantage of public transport disappears; worse, it actually becomes more economical to drive than to use public transport with our exorbitant level of fares.

Consider a return journey from the edge of Zone 1 to the city, a distance of 10km each way. By car at 2007 petrol prices the fuel cost is roughly $2.60. A daily Zone 1 Metcard costs a minimum of $5.60: more than twice as much. If you do the same trip each working day for a year (allowing four weeks' annual leave) the fuel cost by car is roughly $626, nearly $500 less than a Zone 1 yearly ticket. The difference easily covers the extra maintenance bills incurred by driving the car to work each day!

Factor in the fact that Melbourne's public transport generally isn't useful for non-work trips, and our public transport really starts to look like poor value for money indeed. Only the cost of CBD parking and the sheer hassle of driving a car in the inner city count against the car option, and even these disappear when the city centre is not the destination. Little wonder traffic congestion goes on increasing while public transport struggles to attract more than 10 per cent of the population.

Or as one would-be public transport user puts it:

I thought seriously about using public transport to get to work. I figured that if it cost me 14 cents a kilometre just in fuel, a round trip of 30km would see a daily cost of $4.20 or $21 a week. I travel from Vermont to Hawthorn every weekday.... I priced the ticket of a daily zone 1 and 2 for 'all day' at $9.70, a weekly ticket for the same zones is $45.20. My verdict is that I am still $24.20 a week better off if I clog the roads with my vehicle, a small to medium-sized car which is near-new.
However, if you take into account the cost of registration, insurance, maintenance and the total cost of the car then public transport would be much cheaper. But you would need to pay these costs regardless, as the car still exists for use on the weekends. I performed some number crunching and the price of fuel would have to reach $2.88 a litre to be on par with the cost of my journey to work if I was to take public transport....
Lately I have watched the trams taking the same route to work as I do, I often pass them but mostly we stay side by side all the way to Hawthorn. From time to time, I think about getting on. But I stay in the comfort of my own vehicle, thinking about the overseas trip that I will be taking at the end of the year with $1258 I have saved by not taking public transport.
---David Kelly-Grimshaw, Herald Sun, 3 May 2006

The reason public transport fails to be good value for money in Melbourne is not the peculiarities of the zone system (as sometimes suggested), because there is no journey in Melbourne for which public transport is substantially cheaper than petrol in the car. The reason is simply the high overall level of fares. The PTUA's fare comparison page shows that Melbourne has the highest fares in Australia for trips of comparable length, the result of years of above-inflation fare rises both before and after privatisation.

As the following table shows, Melbourne's fares have increased faster than those in every other capital city, and much faster than the cost of car travel (which declined in real terms following the tax changes in 2000). Even the increase in petrol prices from 2005 onward hasn't changed the overall trend.

Transport Consumer Price Indices (based on 1990 = 100%)
		1990	1995	2000	2005	2006	2007
Melbourne	Public Transport	100	159	172	221	232	240
Melbourne	Private Motoring	100	118	129	145	157	156
Sydney	Public Transport	100	128	162	202	206	213
Sydney	Private Motoring	100	116	131	147	157	156
Brisbane	Public Transport	100	131	158	195	206	214
Brisbane	Private Motoring	100	116	128	144	155	156
Adelaide	Public Transport	100	136	161	194	201	217
Adelaide	Private Motoring	100	121	131	150	162	162
Perth	Public Transport	100	138	172	199	205	212
Perth	Private Motoring	100	121	130	145	157	160
Hobart	Public Transport	100	129	155	198	208	212
Hobart	Private Motoring	100	117	129	144	153	153
Canberra	Public Transport	100	144	173	206	210	218
Canberra	Private Motoring	100	121	135	143	157	156
Darwin	Public Transport	100	116	149	182	191	193
Darwin	Private Motoring	100	116	129	140	151	152
Australia CPI - all goods		100	116	126	148	154	158

Source: Australian Bureau of Statistics

What about the abolition of Zone 3 in 2007? This has (temporarily) reduced the fare for those who cross the old Zone 2/3 boundary. But all this really means for Zone 1/2/3 passengers is that they are now paying about as much as they were paying five years ago. A Zone 1/2/3 weekly ticket cost $46 in 2002, and a Zone 1/2 weekly ticket cost $46.60 in 2007. A Zone 1/2/3 off-peak saver ticket cost $8.00 in 2002, while a Zone 1/2 off-peak saver cost $9.30 in 2007. So while Zone 3 commuters are suffering less from fare rises, they're still paying more than before. (And as we see from the table, the increase from 2005 to 2007 is still greater than in any city other than Adelaide.)

International comparisons also highlight the usurious nature of fares in Melbourne. Though very few cities have gone as far as making public transport free, most cities comparable to Melbourne have much lower fares than us. In Toronto, a journey to the city from North York (a suburb 25km out) costs about half the price of a Zone 1+2 journey from Keysborough in Melbourne, also 25km from the city. Vancouver's fares are around half the level of Melbourne's, even though the subsidy per passenger in Vancouver is about one-third less than in Melbourne. New York, Chicago, San Francisco and even Singapore have fares around half to two-thirds as expensive as Melbourne's for comparable trips. Fares in expensive cities like London are higher, but this just reflects the much higher cost of living in these cities. When like is compared with like, Melbourne rates poorly on the cost of public transport.

Of course as Chris Curtis' letter also reminds us, fares are only part of the public transport choice equation. Just as important are 'convenience' factors, chief among which are short waiting times, decent travel speeds, reliable and plentiful service, cleanliness, and friendly staff.

International experience shows that public transport can be both convenient and cheap. The key to making this happen is to provide service that is attractive to full-fare passengers. Melbourne's public transport service levels are unattractive to those with the option of car travel, and as a result public transport is neither convenient nor cheap. What it needs is a planning overhaul and competitive fares, not more excuses!

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© 2007 Public Transport Users Association Inc. (PTUA), Victoria, Australia. ABN 83 801 487 611.
General copying and distribution on a non-commercial basis is permitted subject to proper acknowlegement.
Authorised by Tony Morton, 247 Flinders Lane, Melbourne, for the PTUA

Last modified: 29 November 2007