Wellington City Cheated by Public Transport Fares

* Wellington City Bus Users pay a much higher percentage of the cost of their bus service than the rest of the Greater Wellington Region
* This means Wellington City bus users are being overcharged by millions every year to support bus services in other cities
* Wellington City bus fares are too high and could be reduced by changing from 3 zones to 2 zones for the city

Wellington City has High Public Transport Fares

[Note: The information in this post is the basis for the DomPost story “Wellington City bus commuters ‘ripped off’ by new bus network and higher fares” also published today.]

In July 2018, when the Greater Wellington Regional Council (GWRC) changed Wellington bus service, it also changed the public transport (PT) fares. These fare changes were the result of the “Fairer Fares” public consultation in 2017. A range of discounted fares were introduced (including student discounts and off-peak fares for bus services) and these discounts were part funded by a 3% general fare increase.

Wellington City bus fares are high for relatively short distances and riders have long felt they have been overcharged for the poor bus service they get from Metlink. Is it fair that a Karori commuter going just 2.1 km into the CBD is charged a three zone fare ($3.74 at peak on SNapper) when an Upper Hutt Resident going 8.2km to Naenae is charged the same fare and the 5km trip from Whitby to Porirua is just two zones and so costs less ?

Many bus users have complained to GWRC Councillors about unfair fares over the years but the GWRC has ignored users and not fixed this inequity. The Wellington City Council (WCC), in it’s submission to the Fairer Fares Review, asked for the city to become two fare zones instead of three … and even they were ignored.

Winners and losers under Fairer Fares

Also last year, two important pieces of information were quietly made public by the GWRC. Firstly, as required by PTOM, the GWRC released the original tender prices of each of the 18 bus “unit” contracts. This was the first, and only, time the GWRC published the amount it pays to run the PT services in different parts of the Wellington Region. (Since then the GWRC has continuously refused to release any PT unit costs claiming this is commercially sensitive information.)

Secondly, the new contracts also changed PT fares to being paid directly to the GWRC. This means PT fare revenue is now public information such as in the FareBox Recovery Ratio Calculation Spreadsheet. Late last year, Wellington Commuter requested and received the monthly fare revenue for each bus unit and the rail network unit. From this information, the annual fare revenue for each unit can be estimated.

Access to the above public information makes it finally possible to estimate the Farebox Recovery Ratio which is the percentage of the cost of the service that is paid by PT passenger fares.  The following tables outline the Farebox recovery ratio for Wellington City and the other cities of the region:

Farebox Recovery Ratios for Bus Units in Wellington City 2019/20
Farebox Recovery Ratios for Bus Units in Wellington City 2019/20
Farebox Recovery Ratios for Bus Units in the rest of the Wellington Region 2019/20
Farebox Recovery Ratios for Bus Units in the rest of the Wellington Region 2019/20

It is clear from this information that there are huge differences in the percentage of the bus service cost paid for by passengers. Bus farebox recovery percentages on almost all Wellington City routes fund are higher than the regional average of 52% … sometimes much higher.  In contrast, the farebox ratios cross the rest of bus services are mostly much lower … bus fares in the Wairarapa, Porirua and Kapiti struggle to cover even a quarter of their bus costs.

Fairer Fares are not fair to Wellington City

Before we look at this in more detail, let’s remind ourselves of the GWRC policy on Public Transport fares because this is important (bold added for emphasis):

Council applies user charges (fares) for the private benefits gained by people who use public transport.
GWRC Long Term Plan 2018-28 Supporting Policies page 15

Even a cursory look at the above table will highlight the much higher FareBox Recovery Ratios for Wellington City bus units (1-8 & 18) compared to most non-Wellington City bus units.  If we combine the bus units for each city, we can then estimate the average fares each city’s bus riders should be paying compared to what they are actually paying:

Bus Fare Differences across Wellington Cities
Bus Fare Differences across Wellington Cities

This model shows that Wellington City bus riders are paying, on average, a much higher proportion of the cost of their bus service compared to the other parts of the region. Essentially, over $5.5M/year in Wellington City bus passenger fares being taken to support poorly performing bus services in other cities … the worst case is for every $1 paid by Kapiti bus riders, the Kapiti bus services are essentially also being funded by $2 paid by Wellington City bus commuters !

Now, some might argue that this is a “swings-and-roundabouts” argument because every large PT service has better and worse performing components.

The first response to this is to point out the GWRC’s own fare policy clearly states that fares should be set “for the private benefits gained by people who use public transport”. There is no private benefit to Wellington bus passengers from having empty buses drive around Kapiti, the Wairarapa or Porirua! Any social benefit from running PT services in these areas should be funded from GWRC ratepayers, not through excessive fares being charged to Wellington City bus passengers.

In addition, the GWRC has long known that it has been overcharging Wellington City bus users but they chose to keep this information secret for years by deeming it commercially sensitive … and they continue to work hard to keep this secret.  They should have provided this information to the public as part of the 2017 “Fairer Fares” review and let Wellingtonians decide whether these differences in bus fares are or are not fair.

Give Wellington City Fair Bus Fares

This detailed bus cost information made available under PTOM finally provides clear evidence of the GWRC secretly taking millions in excessive fares from Wellington City bus users to support poorly used and more costly PT services to other cities.

In March the GWRC announced there would be no fare increase in 2019. The reality is Wellington City bus users deserve a fare decrease and the regional council needs to be told to stop giving others a free ride by overcharging Wellington bus commuters for an under-performing bus service (see my previous post).  The best immediate step to do this is for the GWRC and Metlink to accept the WCC submission that city fare zones are much too small and change to having two fare zones for Wellington City.





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