It was designed to encourage private companies to run public transport more cheaply and effectively. It failed utterly, explains Joel MacManus.

In public transport circles, there is no more offensive four letter word than “PTOM” (pee-tom). 

The Public Transport Operating Model isn’t something most commuters ever had to think about, but it was absolutely despised by transport advocates, councils and unions. 

I once watched bus driver at a union meeting at Wellington’s St Luke’s Hall yelling “PTOM fucked us”, and receiving a raucous applause from hundreds of his colleagues. 

As of last week, PTOM is officially gone. It’s been replaced by the even more bureaucratic-sounding Sustainable Public Transport Frameworks. It could be the most important change to support public transport in decades. But what does it mean?

What was PTOM? 

PTOM was brought in under National in 2013 by then transport minister Steven Joyce. 

The main aim was to make public transport cheaper for the government, by cutting the level of subsidy needed to run most services. 

The most important part was a rule that public transport authorities (regional councils and Auckland Transport) had to let private companies bid against each other for contracts to run bus, train and ferry routes. 

Companies like NZBus and Tranzurban were among several that won multi-year contracts to operate specific packages of bus, ferry, or train lines. The government hoped the competition would drive the private companies to run public transport cheaper and more effectively.

If it went well, it hoped some routes would break even from fares alone, or at least require the government to cover less of the loss. 

Why was it bad? 

Most significantly, it made conditions worse for drivers. 

In order to win contracts, bus companies entered a race to the bottom. They cut costs with low driver pay, split shifts and poor working conditions. This made it harder to attract and keep drivers and eventually led to massive driver shortages, which forced councils to cancel buses and cut services, upsetting commuters. 

The Labour government eventually stepped in and topped-up driver wages. This gave drivers a better deal and reduced cancellations, but it also defeated the point of PTOM: rather than cutting costs for taxpayers, the government had to spend millions extra because private companies weren’t paying the drivers enough. 

It also didn’t achieve its own goals. PTOM didn’t even end up saving the government money. A review found the policy did not reduce the level of subsidy needed to run public transport, and in some regions it got a higher.

What’s different about the new Sustainable Public Transport Framework? 

The main goal of the new framework is to make the services better and broader – even if this means spending more on government subsidies.

This generally reflects the current government’s view that public transport is a public good that reduces congestion and emissions, and has a whole load of social benefits. 

When new contracts come up for renewal, councils will have to give a much heavier weighting to driver pay and welfare rather than just price. The framework focuses on paying the drivers and keeping them around, to make sure services run consistently. 

It also gives councils more flexibility, including the option to bring services in-house. This could mean councils buying out bus companies and their fleets, or buying infrastructure such as depots and charging stations. Greater Wellington Regional Council has already indicated it is keen on this.

The framework also allows on-demand public transport to receive public funding. Previously, only timetabled services could apply for funding. This is already being trialled in Devonport and Tawa.

It also removes certain barriers to inter-regional public transport, like Te Huia and the Capital Connection, and provides incentives for electrifying the fleet. 

What will I notice as a commuter? 

Immediately, probably nothing. 

Most public transport operators are on 6-12 year contracts and won’t be up for renewal soon. 

You may see your council starting a new on-demand public transport service, especially if you live in a low-density area that isn’t suitable for larger buses. 

In the long term, it should mean there won’t be as many driver strikes or shortages due to poor pay and conditions.

Public transport authorities should be more likely to expand their offerings with new and more frequent services, as opposed to cutting costs and running on tight margins.

This will depend on how much money the government of the day wants to put towards public transport, but as long as there is decent continuous funding, public transport riders can expect to see more reliable, frequent, and flexible services.