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Public Transport Pricing

Commission research

Background

Pricing can be an important way to improve the delivery and use of public transport. Fare revenue helps fund services that people want and need, while fare design can be used to better manage peak periods, make journeys requiring multiple trips smoother and help ensure particular groups in the community can access services.

States and Territories’ approaches to pricing public transport services vary, reflecting different modes and service combinations, policy objectives and history. That said, public transport across Australia is heavily subsidised by governments.

Governments may subsidise public transport for several reasons. For example, governments may want to encourage more people to use public transport to reduce pressure on roads during peak times. Nonetheless, in some cities public transport can be crowded during peak times because fares do not include the higher costs on the network of travelling during peak. (At other times, fares could potentially be too high, which would make it more difficult for people to travel for work or personal reasons.) The challenge for governments is how to get the most for the community out of public transport and how to get the balance right between fares and subsidies.

Objectives of the study

This study will look at the different potential roles of pricing in the Australian context and the merits of different pricing methods. It will also look at how States, Territories and select overseas jurisdictions approach pricing, the evidence on outcomes and whether any lessons can be learned.

The study will consider how contemporary developments, such as in ticketing technology and policy concerns such as COVID may bear on pricing approaches.

Expected release date

Late 2021

Contact

Angela Woo 02 6240 3225