Reform or Privatise – Public Transport

My Devil’s Advocacy on social media last Wednesday started a fascinating and informed debate about public transport funding in Northern Ireland, which homed in on the idea that, bizarrely, removing concessionary fares at certain times of day or from certain ages would not in fact gain more money for public transport. In other words, counter-intuitively, there may be no difference between allowing certain people to travel for free and actually charging them fares. It is perhaps apt to discuss this further, given the planned strike action tomorrow.

The argument goes as follows: currently, anyone over 60 is entitled to a smart pass and thus to free public transport at any time, which in effect means that the ratepayer pays their fare every time they use it (although actually the payment is not the full fare that Translink would otherwise have received from that passenger had they actually paid, given that there are season ticket and returns which are cheaper anyway); however, removing that right during peak hours would simply force them either off public transport altogether, or on to non-peak hours (when the fares to be recouped are lower in any case).

I was inclined not to believe this and, actually, I’m still not, having discussed it even with people on doorsteps. My detailed market research (ahem, okay, my raising the issue with about six people) has revealed that my instinct was probably right. Almost anyone over 60 using public transport during peak hours is in fact a commuter (in fact, every retired person I raised this with didn’t even know their pass applied during peak hours – how’s that for top-notch research?!) and therefore, if the concession were removed either from 60-65s or from peak hours, would simply pay the fare in full (or whatever equivalent season ticket). The fundamental difference here is between necessary travel at peak hours and optional travel at non-peak hours – there is not much point in removing the concession for the latter because then people will likely opt not to use public transport at all (so there is no gain or loss to Translink either way), but during peak hours the journey has to be made.

There was some dispute about “evidence” either way but there is certainly no evidence that removing concessionary fares during peak hours and/or from non-retired people above 60 would cost Translink money. The likelihood seems to be that it would save roughly £8-£10m – nothing like the entirety of the “fares” because they are not paid at some rate, but enough to cover almost entirely the budget cut (accepting that there is in effect another £14m-£16m to find this year on top of that due to other predominantly capital-related costs arising).

Arising from the same point was the argument that fare rises will actually be counter-productive. My own instinct is that this point is very important, particularly in the context of relatively low fuel prices. The real risk is that if the margin between using public transport and using the private car becomes ever lower, people will opt for the freedom of the latter. Already, I have noticed my own mileage creeping up as fuel costs reduce (something which must be multiplied for other drivers, as my car is a hybrid and thus the gains are not as marked as for most people). There is a real possibility that what Translink should be doing now is reducing fares, particularly during non-peak hours when buses and trains are nowhere near full. Sensible MLAs and journalists should now be demanding the detailed business case which suggests income will be increased through fare rises – my instinct, as the smallest of small businessmen, is that it will not.

Other correspondents made the broader point, which is probably more relevant here – that Translink seems to be being starved of money in such a way that privatisation becomes inevitable. We should be very clear that privatisation would, in all likelihood, be a complete disaster (from the point of view of the customer). It would inevitably lead to minor competition becoming monopolies even on profitable routes (operating at much higher cost to the consumer in the longer term), while loss-making routes would simply not be served at all.

We seem to have forgotten that the point of public transport is that it is public. Yet we also need to note that Translink has two options – reform and remain public, or be privatised.

Here are some thoughts about that reform that should at least, in my view, be debated:
– fare reductions in non-peak hours may in fact raise income;
– removal of concessionary fares during peak hours would surely raise income, even if not as much as at first appears to be the case;
– efforts to ensure greater punctuality on bus routes would reap significant dividends (as has been the case on trains); and
– for all Translink’s arguments that it has integrated management, it has not integrated ticketing – integrating bus and rail tickets (and conceivably even air and ferry tickets, as is the case elsewhere) would in fact enable a more efficient service and give a clearer indication of how many buses should run and when.

Over to you…

(For the record, I have a lot of sympathy with the workers’ point. A properly managed Assembly Budget, including reasonable revenue raising and fewer giveaways, would not necessitate such drastic cuts to public transport, which in fact needs investment not further withdrawals of service. However, a strike, which punishes the same people punished by service withdrawals, is not the way to go about it.)

One thought on “Reform or Privatise – Public Transport

  1. Ian,

    Rather less informed than some no doubt but…

    Why should we have a public transport system and if there is a need what should it do? Now is a great opportunity to ask those questions in an honest manner and deal with the answers whatever they may be.

    I firmly believe in the market to provide the solutions we need.

    I believe much of the public transport system evolved to meet the need of getting people to places they needed to be during a time when cars were much less viable for the majority of households.

    We now live in an era of multi vehicle rural households or non vehicle urban households. Therefore does the need remain to have a publicly operated transport company?

    I see the benefit of mass transport systems whether increased bus usage or rail usage however blindly throwing money at a publicly owned transport company may not necessarily be the answer.

    The policy intention must be to reduce traffic on the roads (reducing pollution, traffic, accidents, time wasted etc) but every year ticket fares increase.

    Ten years ago when I was traveling by bus to university a day return ticket cost £6 or so, five years ago when I was last commuting to work on the same bus route the return ticket was costing £15 or so. I dread to think what it costs now. Increased oil prices will have played some part in that increase but what about the cost of staff?

    How well paid are Translink drivers? A brief search reveals that private sector employees could be looking at £7.50-8.00 an hour. How well paid are management who do not so much rely on commercial pressures but rather the public purse.

    Obviously I believe the market can meet the demands of the people but it will require full privatization. More so than that to meet the governmental policy goals I believe removing fuel duty could spur greater innovation in the sector too.

    The danger though would be Translink itself remaining as a company to compete against new entrants. It knows the profitable routes and would be ruthlessly pursuing the maximum available profit.

    Allowing the market to find its own solutions could produce unexpected entrants to the market. Purely in their own self interests I could foresee major supermarkets running tailored bus services to bring their customers from their homes to the supermarket and returning them at a designated time. In time or to meet customer needs banks and post offices could spring up beside these supermarkets.

    The idea that a bus should run at a designated time and leave on a designated route even if empty is strange. Would McDonalds operate in such a manner? Would they cook 100 Big Macs at 11:00 and every hour thereafter in the hope they manage to attract 100 customers?

    I frequently see double decker buses servicing rural routes with only a handful of people on the bus. I am ignorant in this regard but would a minibus not be more fuel efficient? Again would McDonalds half fill a large drinks container when you order a small drink?


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