TRAM FARES

Press, Volume LXX, Issue 21088, 13 February 1934, Page 15

TRAM FARES

; REDUCTION NOT FAVOUREI CONCLUSIONS OF GENERAL MANAGER "I should much like to be associated with any proposal to reduce fares, but unfortunately I have to report adversely. If the object is to increase revenue the facts continue to be stubbornly against the proposal." This is the conclusion of the genera manager of the Christchurch Tram ways (Mr Frank Thompson) con tained in a report to a meeting of thi Works and Traffic Committee of tin board yesterday. It followed a pro posal made by Mr W. J. Walter a the last meeting of the board tha each cash section should be reduce! by Id. Mr Walter claimed that th fares were too high. In his report, Mr Thompson says:Fare changes were made on Augus 19, 1929, when the city section casl fares were reduced from 2d to 1( and a new trip ticket was introducec for the city—l 3 rides for Is. On records did not disclose what the 2< ticket sales in the city area had been The 2d ticket previously in us< covered any single section throughou the S3'stem. The sales of 2d ticket; for each section were not kept sepa rate. Another point is that the 2c cash fare ticket was used for child ren travelling over three and foui sections. A Comparative Table These matters must be rememberer in considering the following table comparisons are made with the corresponding period in the previous year:12 weeks commencing September 1(> ' I ; j29—closing December 8, 1929. PRspenuors j .Before Ah-r I change, rliance. Kffoct 2d cash .. 612,3118 401,854 'ICO.M-i | Jo one- section ' r ides 1/6 480.660 SO."). OS.". i2-M'i." Nr:,f city Id rush - H 7.351 tr.T.nr.: 1 N*w city i:; ! rides 1 .'- . . - "(1,700 i:;o,70l : 1.093,058 1,055,016 -37,42'.: I Revenue 1" T * •-'I rash . ."..103 3,765 * 1.33J I.'. one section I rides 1/G .. 2,403 2,525 till | Now cily id ! c'ash .. - - 2SS . 2SE I New cily 13 rides J/- . . -- 118 illf i £7,506 £6,690 *£B2t I * Decrease. 'i Increase. ! Decrease in Revenue | Passengers decreased 3.4 per cent. I while revenue decreased 10.9 pel cent. There may have been seasonal | or economic or other changes responsible for drop in passengers, but these would not explain why the revenue decreased to a greater extent This was due to the introduction oi the cheaper ticket. The next 12-week period is below:— 12 weeks commencing December 9, 1929—closing March 31, 1930. PaEßangers Before After change. chunKC. Effect. 2d cash. .. 87!),052 092,478 *156,574. 15 one. (-eciion rides 1/6 .. 618,855 670,453 1-51,600 New city Id e.'isli -- J 04,7 5a ; 104,7 52 Ni'W rity J 5 rideß 1/- .. -- 35,048 Y35.04S 1,497.007 1,502,723 t4,828 Kcvcnue :'c( cj.-Ii -<:■ 1125 5,771 *1,55J 15 nun section riilns 1/6 . . 3.o'Jt 3.352 i2sfNew rity Id rush . . - - -130 MSC N.-u- city 15 rideß !/. . . J35 J135 S.\ 0,419 £9,694 *i725 'Decrease., 1/ncreasc. This period differs from the last in that there is an increase in passengers, not a decrease. The increase in passengers is only one-third of one per cent., but the revenue decreased 7 per cent. The experiment ceased on June 21, 1930. Generally our experience has been that when decreases in fares have been made the number of passengers increases, but the revenue decreases. If, for instance, a 2d fare is reduced to Id, it would be necessary for the number of passengers to double if no loss of revenue is to be experienced. This doubling of passengers is not to be expected. If a 3d fare is reduced to 2d it would be necessary for passengers to increase by 50 per cent, in order to maintain revenue. If a 4d fare is reduced to 3d the increase in passengers would have to be 33 per cent, and so on. Weekly rasscs Tne last board removed restrictions on concession tickets and introduced weeKly passes. Over an eight-week period the number of passengers increased 147,603, but the revenue declined £1179. Our experience is that while passengers increase in number when fare reductions are made, the revenue falls, yet large sections of persons persist in believing that if more people travel the revenue is bound to be better. Auckland Confirmation The manager of the Auckland Tramways reported to his board on December 8, 1933. One paragraph reads:— "The experience time and again of many transport authorities has clearly shown that the increased t revel resulting from a reduction in fares does not make up the amount of revenue lost by the change. On the contrary experience ■ shows that when fares have been | increased the revenue correspondingly increases with a slight reduction in the number travelling. This is accounted for by the fact that in these days persons do not travel in the trams for pleasure but j only for the purpose of getting from one place to another. In other words, the fare is secondary to the in olive which causes the journey to be taken." Notwithstanding that opinion the Auckland Transport Board introduced Id cash fares in Queen street. The experiment commenced on December 19, 1933. The result was no appreciable increase in passengers, but a drop m revenue at the rate of £2510 a >ear. The consequence was that the 'id tickets were withdrawn on February 1 last. Experience at Invcreargill In Invercargill the fares were formerly: One section 2d, two sections

3d, three sections 4d. On June 20. 1933, the fares were reduced by Id on each section. I have made the following comparisons with the corresponding period in the previous year from iigures obtained from Invercargill. The calculations are mine, only the basic material was obtained from Invercargill:— -Passengers. Kcvenue. £ Before reduction in fares: i Decrease. Decrease. I April, TO?.?, .. 10,098 01 ' ! Increase. Increase. I Mny, Jo3;i .. 45 4 1 ! Hetlucliwi iii fares: ! .In.-rHfo. Dei-reuse. '; .lime, .. 7,nr. 7f> .':i!y .- .. 10,7:14 272 Angus), . . . . 34,701 IGO Restnrntion to higher: 1 fares: Increase. Decrease. ! Sci'lcmber .. 41,;148 ITJ j Oetober .. .. 24.-101 ■)!{ ■j November .. 17,738 S7 I December . . I8,^ t "!!> 107 ■! The reduction in fares look place | in the middle of June and the restoraI tion to higher fares took place in the i middle of September. Complete comjparisons should therefore exclude these I particular months. Effect of Lower Charges In July and August the increase in passengers averaged 22,773 a month, while the decrease in revenue averaged £2Ol a month. After restoration to higher fares the passengers in- ; creased 20,292 a month on the average, | while revenue decreased £79 a month. I It sometimes happens with us that j an increase in passengers, even with- | out alteration in fares, sometimes j shows decrease in revenue due to a ! larger number of persons travelling on ' the lower fare section. The fact stands out that when lower fares were charged the revenue declined £2Ol a j month. When higher fares were reI stored the revenue went do\vn only £79 a month. Expressed in percentages and using April, 1932, as the j datum line, the figures are as follows: i Passengers. Revenue, p.c. p.c. Before reduction in fares: April .. dec. 5.3 dec. 4.1 May .. inc. 3.2 inc. 3.3 During reduction in fares: July .. inc. 9.8 dec. 14.1 August .. inc. 20.7 dec. 5.5 After higher fares restored: October .. inc. 6.4 dec. 8.8 November .. inc. 5.0 dec. 10.0 December . inc. 21.3 inc. 5.5 In October the decrease in revenue was less than when fares were low. In November the decrease was greater, while in December the revenue increased. The trams are helped along by rates, which fact gives a greater significance to the trial of lower fares being abandoned. Experiments Overseas in Brisbane an experiment was made last year to popularise the trams and increase the revenue by reducing the concession ticket rate, but after a trial of three months it was found that whilst the sale of concession tickets increased by 2.63 per cent, during the same period the revenue decreased by 4.13 per cent, or at the rate of £12,064 a year. Glasgow reverted from Id sections a mile to half-penny sections a half-mile, but the operation for 10 months showed that whilst there had been a substantial increase in passengers, the decrease in revenue was such that they again reverted to the Id section. In Auckland an experiment, tentatively for six months, was introduced in 1927 whereby the first sections outward were divided into two sections and Id fares charged on each, but after operating for six weeks the former fares were reverted to as the increased travel contemplated by the city council proved fallacious. Whilst the passengers carried slightly inI creased, the receipts fell at the rate | of £1252 a week or £65,104 a year. I On August 3. 1931, the Auckland board reduced the cost of 'concession | tickets by approximately 8 per cent., | the object being to pass on to the pubi lie by way of reduced fares the 10 ; per cent, reduction in wages and | salaries. .The percentage of concession tickets sold to the cash tickets inj creased to 32.9 per cent. Cash riders l availed themselves to a greater extent ' (2.9 per cent.) of the concession tickets, : but the net result was that the board's revenue from these tickets decreased by £1557. Conditions in America : American conditions differ from New j Zealand so much as to cause hesitancy in using American information,

but it is interesting to note that the American Transit Association, whose officers gave me much assistance when I was in New York in 1931, has just published a book of 300 pages on what is called "fare structures." Referring to the book's comment on the relation between fares and costs, I beg to draw the committee's attention to my report of December 6, 1933, on cost of transport for each of the fare sections in Christchurch. This information should be looked at again if the proposal to reduce fares is to be considered in detail. It is almost unnecessary for me to add that I recognise the question to be a policv one for the board alone to decide.