The Free Tram Zone (FTZ) just turned five. It was introduced in January 2015.

If you’re wondering why there was so much discussion on it last week, it’s because submissions to a Parliamentary Inquiry on the topic just closed.

Transport Matters Party MP Rod Barton, who moved for the Inquiry, posted an article addressing some concerns with the FTZ. You can see his motivation in all this is coming from the right place:

We need to break the cycle of dependence on cars to get around this city and we need to solve the operational issues that are holding our public transport network back.

The problem is he seems to have assumed that fares are the biggest barrier to getting people out of their cars:

We needed to … do more to encourage people onto public transport. … If price will get them there, then we should drop the prices. Our city needs this and our environment needs it.

I don’t think that’s right.

The biggest barrier is lack of good services – public transport that actually presents a viable, time-competitive alternative to driving.

It’s not such a big issue in the CBD and inner suburbs, where the trams (including in the Free Tram Zone) complement the trains and buses, and provide a pretty dense, pretty frequent, connecting network, at least during daytime. In these areas, public transport competes strongly. Only a minority of people come into the CBD by car, for instance.

It’s the middle and outer suburbs where the only option might be buses every 30-60 minutes, and if you’re lucky there are trains, but only every 30 minutes after dark. Most people won’t use these at any cost if they have a car.

Still, given the Free Tram Zone has been around for five years now, the effects of its introduction should be visible…

And the current debate got a few myths flying.

Did the FTZ get more people onto trams?

Yes it did. Budget Papers show patronage rose sharply, from 176.4 million in 2013-14 to 204 million in 2015-16, an increase of 16% in just two years — the highest growth in at least 20 years.

In fact in the data going back to 1947, the only higher jump I could find was following the patronage dip from the 1990 tram strike that knocked the trams out of action for over a month.

But…

Did the FTZ discourage driving?

No it didn’t, and this is the real problem.

In January 2015 there were two major fare changes:

Zone 1+2 fares were capped at zone 1 prices;

and the FTZ was introduced.

Analysis of VISTA data (which surveys tens of thousands of people and their travel) shows that the first change, capping Zone 1+2 fares, resulted in a reduction in car travel. Some people who previously drove to Zone 1 stations now board trains closer to home. Despite it also introducing some issues to the fares, the effect on reducing driving has undoubtedly been a good thing.

But the VISTA data also showed that within Zone 1 (where there was no price change apart from the FTZ) more people are now driving to the area included in the FTZ. Conclusion: The FTZ has encouraged more driving.

This is in line with car parks promoting their location within the FTZ.

This sign seems to neatly sum up the main beneficiaries of the #FreeTramZone: drivers and car parks. pic.twitter.com/m1vo9Higey — Daniel Bowen (@danielbowen) May 7, 2015

The other thing the data showed was similar to the anecdotal evidence: many people hopping onto trams had previously made their short CBD journeys by walking or cycling (including using the blue hire bikes, partly killed off thanks to the FTZ). This is not a positive change.

Doesn’t everybody benefit from the FTZ?

No they don’t. The people who benefit are those who did not reach the zone by public transport.

If you do catch public transport to the CBD/FTZ, you get trams included in your daily fare (unless you used the Early Bird train fare).

This means that for most paying public transport users the FTZ makes no monetary difference.

Some of the confusion around this might be because in some other cities in Australia, there is no daily fare cap, or it is very high, so you would pay extra for a lunchtime tram trip to the shops. Not so in Melbourne.

Wouldn’t scrapping the FTZ would hurt the poor?

Mostly not.

The main beneficiaries are people drive into the FTZ – who as the Grattan Institute says, are more than twice as likely to earn a six-figure salary as other workers.

Some international and interstate tourists also benefit by not having to buy a Myki card, but only if the entirety of their travel is within the CBD and Docklands. It seems unlikely that those people are unable to afford the cost of public transport fares – though better sales and distribution of Myki cards, for instance through hotels, would be a good idea.

There are some students on low incomes who live in or close to the FTZ. Most of them can already get substantial discounts on fares. But I’ll wager most people living in the FTZ are not hard up for cash.

Melbourne’s “battlers” are more likely to be found in outer suburbs with no efficient frequent usable public transport, struggling to afford the running costs of the cars they need to get where they need to go – or struggling to reach education and work opportunities.

Those people should be the priority for assistance.

Crowding? Can’t they just run more trams?

Crowding has long been an issue on CBD trams, but has got markedly worse with the FTZ.

It’s particularly an issue in evening peak hour, when paying passengers who want to head outbound are squeezed off the trams by free passengers riding a short distance. The above video shows route 19 outbound at 5:45pm.

Rod Barton noted:

Indeed, overcrowding exists across the entire public transport network. However, this is not by any means an insurmountable problem. This is an operational issue that could be solved by adding increased services or shorter shuttle routes that take passengers to the perimeter of the zone.

Running more trams is the logical answer in principle, but problem is that right now, there are no more trams to run.

Could they buy more? Yes. But in the context of them struggling to even provide upgrades to ensure a fully accessible, or indeed fully air-conditioned fleet, where does this money come from?

Nobody expects transport systems (road or rail) to completely pay for all their costs, but at least if patronage is growing on fare paid routes, then revenue is increasing to cover some of this investment.

Funding for expensive upgrades to free services with no financial return is a hard ask when there are so many other demands on public money.

Should the entire PT system be free?

Public transport network revenue for 2018-19 was $982 million (PTV Annual Report 2019).

Even accounting for the huge cost of running the Myki system (about $100m/year — all those upgrades like new faster readers don’t come for free) that’s still a lot of foregone revenue that would have to be covered if there were no fares.

The beneficiaries would be wider than the FTZ of course — but mostly it would be those people who have a service that is good enough to use.

Those in the outer burbs with their hopeless buses would not start using public transport just because it was free. They’d still drive.

To draw an analogy: Free outer-suburban public transport is like free payphone calls. Few people make use of it, because frankly the experience of payphones is just nowhere near as convenient as mobile phones, which most people own already – even though they are not free.

Ultimately even if government had that money to spend, upgrading services would do far more to get people out of their cars and using public transport.

As Chris Hale notes: In wealthy cities like Melbourne, potential public transport passengers are indifferent to fare changes or discounts, but respond robustly to enhanced service.

Isn’t the FTZ boundary illogical?

Yes it is. It comes within one stop of the Exhibition and Convention Centre, the Casino, the National Gallery of Victoria, and the Exhibition Buildings and Museum.

Remember the history: the Coalition proposed it in early 2014 before the state election, and Labor immediately matched it. It appeared to come straight from the politicians, bypassing the bureaucracy and the transport operators.

It’s almost as if the politicians who designed it back in 2014 just drew a line around the Hoddle Grid, plus Docklands and the Vic Market, and didn’t consider the tourist hotspots… or indeed where the boundary tram stops were located.

The Free Tram Zone was the classic politicians’ “let’s draw a line on a map without thinking about it too much”. The original boundary as announced in March 2014 didn’t even consider the location of *tram stops* (eg Fed Square, Batman Park). https://t.co/ZbUxkgU71r pic.twitter.com/qt9gBIqL9X — Daniel Bowen (@danielbowen) February 3, 2020

Other points

Did the FTZ speed up trams? Few people now need to touch their tickets. But timetable and performance data shows no overall speed benefit, and the tram operator has raised concerns about delays, with CBD trams now averaging just 11 kilometres per hour. Crowding appears to have more than countered any boarding/alighting time saving for individuals.

Was the FTZ to cover for the City Saver Zone, not catered for under Myki? The City Saver Zone was catered for under Myki. It worked on trains and buses provided the user touched on and off.

Unofficially it worked on trams too, but was removed in mid-2010 when touch-off was made optional on trams. This was thanks largely to slow Myki Reader response times, though dodgy GPS may have also been a factor.

Have fare cuts like the FTZ and the nearly flat fares added to upwards pressure on fares generally? Yes. Around the same time the Coalition introduced those changes, they also flagged CPI+2.5% rises from 2015 to 2018, which were subsequently implemented by Labor. A short trip in Melbourne’s Zone 1 now costs about double that of Sydney.

What happens with the FTZ now?

We’ll see. The Inquiry will go ahead obviously, but the government has already said they don’t want to expand the zone – in fact their response to the Herald Sun sounds awfully like “we know it causes all sorts of problems, but expanding it will make it even worse”:

The state government has rejected a call to extend free CBD tram services, saying it would increase crowding and make trams run slower across the network.

Equally I doubt they’ll get rid of it. In 2018, both major parties, as well as the Greens, said they had no plans to change it or remove it.

If the robust debate seen last week proves nothing else, it’s that it’s a politically vexed issue, and it’s probably easier just to ignore the problem.

I’d love to think the government would be brave enough to get rid of the Free Tram Zone – to claw back some revenue, relieve crowding and stop encouraging CBD motorists – but unfortunately for paying passengers, we’re probably stuck with it.

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