Sunday, 10 January 2016

The London Green Party's "fair fares" idea.

This idea has some appeal:

Our three key measures are:
* the phased introduction of a flat fare structure, making zones a thing of the past, with the immediate abolition of zones 6 and 4,
* justice for part-time workers, with a daily cap that matches the rates paid by monthly season ticket holders
* a new 'ONE Ticket' allowing changes across all modes to close the gaps for people who currently pay twice when changing from bus or train to the Tube as well as ensuring that people changing buses pay only once for their journey.

"It's not fair that people in outer London pay so much more to get to work in the centre of the city - especially as it's also easier for people in the centre of town to use even cheaper or free alternatives such as hire bikes, cycling or walking," says Sian Berry, the Green candidate for Mayor of London.

Instinctively, it makes sense to make people pay more if they travel longer distances, but with local transport, people aren't paying for the distance as such, they are paying to get to work, mainly in Zone 1 or 2, or to get into Zone 1 for an evening out or to go shopping.

Currently, annual season tickets cost this much:

Zone 1 only - £1,296
Zones 1-2 £1,296
Zones 1-3 £1,520
Zones 1-4 £1,860
Zones 1-5 £2,208
Zones 1-6 £2,364

That's pretty flat already - a journey within Zone 1 is probably less than a mile, from the outer reaches of Zone 6 into Zone 1 is about fifteen miles, but it only costs twice as much.

But people don't pay to sit or stand on a train or a bus. It's a burden rather than a pleasure.

You could easily argue that Zone 1-2 prices should be higher than Zone 1-6 prices. If Journey A gets a commuter into town in five or ten minutes, then that's a much better service that Journey B which takes three-quarters of an hour to get you into town. That's exactly the same as rents being higher nearer the middle of town - people are paying their landlord for shorter commute times; why not have them pay the body actually providing the transport?

But it would be interesting to see what happens if there were a flat season ticket price of averaged out £1,860 or something. I strongly suspect that the behaviour of people in Zones 2 to 3 would not change that much, they would just pay the extra £300 or £600. Perhaps a few people in Zone 1 would walk to work instead? I also doubt that a £350 or £500 annual saving would encourage many more people to commute in from Zone 5 or 6. The only way to find out is to do it.

Another thing worth mentioning is that Transport for London's income is roughly half ticket sales and half subsidies. Rental values are a function of ticket prices, so a subsidy to travel is a subsidy to landlords. If the subsidies were abolished, an annual season ticket would cost around £3,500 a year (wild guess).

That would push down rental values by the same amount, i.e. instead of a working couple paying £18,000 a year rent and £3,500 for two annual season tickets, they would end up paying £14,500 rent and £7,000 for tickets. This effect would be stronger near the centre and less so on the outskirts, so abolishing the subsidies would be an indirect and slightly crude form of Land Value Tax on London landowners, as well as being a corresponding saving for taxpayers everywhere else in the country. So win-win, I think.


DBC Reed said...

NB Things are going to get easier from our p.o.v. if Corbyn follows up his barbed complaint about the Tories "deliberate stoking of house price inflation" in his "Reshuffle" article in today's Observer ( which is an indigestible mini manifesto.)The anti Homownerist rhetoric is catching on, with less of the old cop out that house price inflation is a by-product of free market forces.

The Stigler said...

I sometimes think this about transportation, especially with fixed transport like tube and tram systems where it's a public utility, and commonly used by locals as a commuter/going to school thing. And don't cities want to reduce congestion? So, get rid not only the cost, but the hassle of ticketing, change etc, and more people will use it.

Lola said...

Yes. Do away with subsidies - all subsidies - they always end up as rents.
Next, if TFL were really on it they would reverse the whole charging structure - that is 'value pricing' so that long, unpleasant journeys would be priced at less than short unpleasant journeys.
Personally I would try and work out how they could benefit from the land value uptick enjoyed by landlords when they, TFL, invest money to build more infrastructure.

Derek said...

In Calgary we have time-based ticketing rather than distance-based ticketing. So when you buy a ticket, it's valid for 90 minutes on bus or train from the time it's stamped. Seems to work quite well.

Mark Wadsworth said...

DBC, as long as anti-HOism is catching on, I'm happy.

TS, do you mean make it free? There's an argument for that but public transport in London is over-used, it is chock full most of the day, bursting at the seams etc. In which case you need pricing for
1. rationing of a scarce good,
2. Save 'the taxpayer' the subsidies
3. To prevent the value spilling over into rental values.

L, agreed.

D, yes, 90 minutes would cover it nicely, you can get from one end of a Tube line to the other in about 90 minutes. Good idea.

The Stigler said...


But there's no price difference on Zones 1-6 between peak and off-peak, so TFL seem to think that people who want to go peak are going to go peak (and the incentive to go off peak is that it's non-hellish).

I wouldn't say it's chock full most of the day. It's still fairly busy, but I sometimes go to London for meeting and after 11 can normally get a seat.

I do think off peak buses and tubes might make sense. We already give off-peak bus passes to the elderly and unemployed, why not just make it everyone? The working people will just square off. You get rid of a load of friction about coins, more people take the bus.

Mark Wadsworth said...

TS, they used to have off peak travel cards, I don't know the details any more because I always buy annual travel cards to keep my life simple.

DBC Reed said...

@MW Guardian letters site has a letter from International officer of
GMB calling for land tax backing for citizens income.

Mark Wadsworth said...

DBC, there were lots of good letters re CI in today's Guardian - but that one was the best of all.
I will post later if I have time.

Bayard said...

"* a new 'ONE Ticket' allowing changes across all modes to close the gaps for people who currently pay twice when changing from bus or train to the Tube"

When I lived in London in the late 80s, we had a thing called a Travelcard that worked on buses, tubes and trains. Does this no longer exist?

Mark Wadsworth said...

B, yes they did and I didn't realise they had stopped. Hmmm...