Across the ditch they’re making public transport free. Should we join them?

Everyone else is doing it, should we? OK, well, not quite everyone, but some countries are scrapping public transport fares in response to the fuel crisis. 

The Pakistan government made public transport in Islamabad and Punjab free for 30 days. In the Philippines, Manila temporarily implemented free commuter rides by subsidising the city’s shuttle drivers. Over in Australia, Victoria and Tasmania have made public transport free too. They say it addresses both the capacity and cost issues caused by the fuel crisis. which has seen oil prices skyrocket due to the war in the Middle East and closure of the Hormuz Strait (the US is now also blockading Iran’s ports). 

Some political parties, including The Greens, are pushing for it. Should New Zealand be following suit? Let’s look at the pros and cons.

The arguments for making public transport free

It’s a quick fix. “There are four ways to reduce fuel demand [and] get people out of their cars,” says University of Auckland transport expert Timothy Welch. “But only one of them is really quick.” That’s scrapping public transport fares. The other levers you can pull to reduce petrol use are electrifying the transport system, encouraging the uptake of EVs and bolstering active transit like walking and cycling. “But that’s not going to happen overnight.” 

Of course, there’s also the option of trying to stop all the commuting, by asking people to work from home, but that’s not a solution for those who must be on site to do their job. 

It could be temporary. And we all know, the government loves temporary. What, you hadn’t heard? Let us repeat again that the government wants all of its responses to the oil crisis to be targeted, temporary and timely.

It addresses supply pressures and eases consumption. If more people use public transport, it means fewer driving their own cars and that reduces petrol use. That’s pretty helpful during a fuel crisis challenging availability and pushing up price. “The reality is, when we’re in a situation where our fuel supply is uncertain and we’re trying to preserve that fuel supply, then really the idea is to get as many people out of their cars as possible,” Welch says.

He thinks the most effective way to do that is with a broad-based policy, rather than trying to target one specific economic group as the government has done so far with its $50 weekly payment to 150,000 families. “If we can get somebody in downtown Auckland out of their car and on the bus and they save five litres of fuel, then that’s five litres available to the entire country, to those that may not be able to use public transport or may live somewhere where we don’t have a good public transport system.” 

Free public transport helps people’s wallets. This feels like a good thing when everything is so expensive. And everyone loves free stuff! Removing fares incentivises and rewards people using public transport, Welch says. It can also convert people who may have been hesitant to get a transit card or figure out public transport. 

We’d have more efficient roads. More people using public transport instead of their cars means that buses (as well as other vehicles) have less traffic to contend with and move faster. According to Welch, this creates a feedback loop for the transport network. “If your bus route is suddenly comparable in time to your car trip and it’s free, then it starts to make a lot more sense.” They’re also much safer.

It helps people on lower incomes. Free public transport would be a real help for people who are struggling right now. “One of the groups that are trying to push for free public transport are the uni students,” says Welch. “In some cases, they have to decide: are they going to eat their next meal, or are they going to be able to fill their gas tank or get on the bus?” 

Temporary measures can inspire long-term change. Studies show getting people who don’t usually use public transport to start taking it means they’re more likely to adopt it long term, Welch says. “So when the crisis goes away and then fuel is cheap again, a portion of those people will remain using public transport. So there’s a long term benefit in it for everybody.”

The arguments against making public transport free

Cost isn’t the primary barrier that stops people using public transport. It’s not even in the top five, according to Waka Kotahi, with availability, access, distance and time all ranking higher. Not all New Zealanders have equal access to public transport; people living rurally reported the reason they didn’t use public transport was because it wasn’t available to them.

Public transport is already an economical alternative to driving. Rising fuel prices mean driving 15km in Auckland is nearly twice the price of taking public transport. Down in Dunedin, where bus prices are fixed, public transport is cheaper than taking the car pretty much anywhere.

Fares are capped in many locations anyway. Bus rides in Dunedin and Queenstown have a fixed rate regardless of the distance travelled; adults aged 19+ pay $2.50 with a Bee Card and transfers within 45 minutes are free. Christchurch fares are capped at two trips per day or 10 each week, maxing out at $30 for seven days of travel. In Tāmaki Makaurau, single-journey trips are capped at four zones. This means no one pays more than $7.90. Aucklanders can also take unlimited public transport rides for $50 a week across buses, trains and inner-city ferries (mid-harbour, outer harbour and Waiheke ferries aren’t included). 

People are already turning to public transport. Put rising costs at the pump together with March Madness and the ongoing cost of living crisis and people are choosing public transport. Auckland recorded its highest-use day in seven years in March. Patronage is up in Wellington too. Continued high fuel prices will likely drive even more people to public transport as a cost-saving measure, leading to an increase in ticket revenue. “More fare-paying passengers helps make public transport more viable,” says Eric Crampton, chief economist for the think tank the New Zealand Initiative. “If demand increases mean putting on more buses is warranted, passenger fares provide the funding to help do it.”

Public transport isn’t cheap to run. Operating costs have been going up, pushing Auckland to increase fares in February, and Christchurch to hike bus and ferry ticket prices come July. Without the revenue from ticket sales, the transport system would rely on the other funding streams (like councils, the National Land Transport Fund and advertising) that help pay for it. 

“Public transport isn’t free,” points out Crampton. “Removing fares means more of the burden shifts to people who are not using public transport, including those far from any bus route. Making those who cannot use public transport help to pay the fares of those who can, while they also have to pay their own higher fuel costs, seems unfair.” He says that while free public transport “sounds great”, in theory “it works poorly in practice”.

A surge in use could prove challenging. Commuters in Victoria have complained about stretched capacity since fares were scrapped, particularly at peak hour, as the network grapples with an increase in users. Free public transport, even temporarily, could cause increased demand, which raises concerns about capacity. “Any time something is cheap or free it tends to be, some people would argue, over consumed,” Welch notes. “So there is some risk of buses being full, or trains being full.”

Discounts might be a better option. Train fares in Lithuania were halved for two months. New Zealand did this during Covid too. Auckland mayor Wayne Brown is in favour of discounts. He says that rather than giving 150,000 workers an extra $50 a month as a response to the fuel crisis, the government should further subsidise public transport, according to RNZ. “There’s a crisis at the moment with fuel. It’s a golden opportunity in one form or another to encourage more use of public transport.”