Myth: Multimodal zone-based fares are unfair; we should be charged by distance

Myth: Multimodal zone-based fares are unfair; we should be charged by distance
Fact: There is huge value in a fare system that’s simple to understand. However, having a single flat fare for a city the size of Melbourne would arguably be unfair on those making short trips. Fare zones are a convenient middle way that keeps the fare system simple while exposing the cost of travelling large distances.

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.

But what this fails to recognise 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. But in a city with the geographical spread of Melbourne, it’s generally agreed the disparity between the shortest and the longest typical journey is too great for flat fares to be a reasonably fair method of charging. In Melbourne, some trade-off is required between simplicity and fairness; hence 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 zone system charges 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 is perfect. Rather, there are at least four problems with the zone-based fare system at present:

  1. The overall level of fares is 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 pay as much as they always have.
  2. The increment from a one-zone to a two-zone fare is too high, imposing a stiff penalty for crossing the zone boundary (which is arbitrarily placed at a distance that varies 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 costs $2.48, a 6km trip from Box Hill to Camberwell costs $6.06 – two and a half times as much!
  3. There are anomalies with specific journeys near zone boundaries. While some of the more bizarre anomalies were fixed in October 2009, it is still perplexing that (for example) a journey from Monash University to the city can be done in Zone 1 starting from the south side of the campus, but requires a Zone 1+2 fare starting from the north side (which is closer to the city!).
  4. The extension of Myki ticketing to part of regional Victoria has introduced its own anomalies. 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). However, 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 argues 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, but with a greatly reduced fare per zone, such as in Vancouver (where a three-zone fare costs less than our 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.

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Last modified: 3 January 2014