Good day my good friend.

A slightly shorter essay today, and a slightly short introduction. And its not because I realised at 11:30 this morning that I had not written anything. Nope. No-siree…

📕 I have co-authored a book on Mobility-as-a-Service, which is a comprehensive guide on this important new transport service. It is available from the Institution of Engineering and Technology and now Amazon.

💼 I am also available for freelance transport planning consultancy, through my own company Mobility Lab. You can check out what I do here. 

🎫 Fare deal

An argument that I often see made in favour of reducing or capping public transport fares is that it is equitable, and helps to achieve an equitable outcome. The logic behind it being that as those on lower incomes faces challenges of affording fares on public transport, and are more likely to use public transport, they would benefit most. To be fair, evidence from the likes of the Joseph Rowntree Foundation would appear to support this, with it being well-documented that the most vulnerable in society do face the most issues when it comes to transport poverty.

This is the point where I put in a big HOWEVER. Because a blunt instrument often has unexpected consequences and side-effects. In this case, whilst there is a very sound argument that those on lower incomes may proportionately benefit more from fare caps and similar fare policies, they are not the only ones to. And the total value of the benefit may be made up of those who benefit proportionally the least at an individual level.

Lets work on the assumption that in instituting a fares policy, government wants to, broadly, benefit the most vulnerable in society the most. In this case, the proxy is those on lowest incomes.

Let’s look at buses. A major finding of the impact assessment into the National £2 Bus Fare Cap is that those who used buses already are likely to benefit proportionately more through two ways. The first is reducing the cost of their fares, particularly those who previously purchased single tickets. The second is through existing users making more trips as they can now afford to.

What we know from the National Travel Survey is that those who live in households in lower incomes are much more likely to use buses – taking almost twice as many bus trips as those in the second highest and highest income quintiles. Consequently, you can make a very clear case that providing a fare cap for people who use buses is progressive. This is further boosted by the fact that bus fares have seen the highest increases in fares over the last 10 years compared to other modes.

Modal choice of trips by household income quintile (Source: National Travel Survey)

What if we instituted a fare cap on trains? Take a look at that National Travel Survey data again. What it shows is that those in the highest income households take significantly more trips by train. As in nearly double the nearest other income quintile, which in itself is the second highest income quintile.

Consequently, the logical argument made is that a fare cap on trains would likely benefit those on the highest incomes the most. Furthermore, we know from other NTS data that those on the highest incomes make more longer distance trips, where rail has an advantage over the likes of cars. Thus increasing the benefit.

I bet you are thinking at this point “aha! But James! Rail fares have gotten much more expensive over time, so naturally fewer people on lower incomes are using them!” If only that was true. Looking a time series of use of public transport by those in the lowest and highest income groups since 2002, it can be seen that those in the highest income groups have always taken more rail trips than those in the lowest income groups, and always taken significantly fewer bus trips.

Trips per person per annum by mode of public transport in the lowest income quintile from 2002 to 2023 (Source: National Travel Survey)

Trips per person per annum by mode of public transport in the lowest income quintile from 2002 to 2023 (Source: National Travel Survey)

So this would indicate that for initiatives like fare caps, those that will benefit the most are already using those modes of transport, and that the income bands of those who use buses and trains are very different, and so the impacts will correspondingly be different. As a result, a fare cap on trains seems likely to be less progressive.

This sounds simple, and is sometimes used in bad faith to justify current fare policy on the UK rail network. However, even this is a simplistic take, as a fare policy may bring in an entirely new normal situation for the use of public transport systems.

For example, lets say a national rail fare cap of £10 for a return fare was brought in, and lets assume that the main beneficiaries are those on higher incomes who use trains currently. However, over time due to the lower fare more people on lower incomes start to use trains, changing the makeup of those who use trains, and consequently changing who, in the long run, has benefited from the fare cap.

Finally, the impacts of fare policies cannot be measured over the shorter term, but often are – at least publicly. Years of research into public transport fares has shown one thing above all. That in the short run (1 or 2 years) demand for public transport is relatively inelastic. Namely it does not respond much to price rises in the short run, because people cannot change their travel habits quickly. I mean, if you changed your job every time the train fare went up, how many jobs will you have had?

But over the long run, demand for public transport is relatively elastic. So in response to price rises, there may not be changes in the short term, but in the long run people eventually change. Ever wondered why people constantly complain about poor trains and paying more for them, and only years later finally stop using them? This may be part of the answer.

As always, the impacts of fare policies that instinctively feel like a good thing are always more complex than you think they are. That does not make them bad ideas, but it does mean they work out in ways you may not have thought of before.