Future Fare Options for Queensland

Background

In response to the Queensland Government’s six-month trial of flat 50-cent fares across urban public transport services, the Department of Transport and Main Roads engaged NineSquared to provide strategic advice on future fare structures post-trial. The trial, enabled by the rollout of smart ticketing technology across Queensland, aimed to simplify fare systems and boost patronage. However, with the trial nearing completion, the Department sought robust analysis of alternative fare models, including retaining the 50-cent flat fare, to inform long-term policy decisions.

The challenge was to identify fare structures that balance simplicity, equity, revenue sustainability, and operational feasibility. The fare system needed to accommodate Queensland’s extensive geographic coverage and diverse travel patterns, while also aligning with broader transport and social policy objectives.

Our Role

NineSquared utilised its database of public transport fares that contains detailed fare information for over 100 cities across the world to conduct a comprehensive review of global fare systems and modelled three viable options for Queensland: Flat Fares, Zones Crossed, and Zones Used. Each option was assessed for its impact on patronage, revenue, equity, and system complexity.

• Flat Fare Systems offer simplicity and transparency, often leading to increased patronage. However, they can result in revenue shortfalls and equity concerns, particularly for short-distance travellers who pay more per kilometre.
• Zones Crossed Systems align fares with travel distance, improving cost recovery and equity. Yet, they introduce complexity for users unfamiliar with zone boundaries.
• Zones Used Systems strike a balance by offering large zones that replicate flat fare benefits while allowing targeted pricing strategies to support social objectives.

Using detailed patronage and revenue data from SEQ, NineSquared modelled 17 fare scenarios across these three structures. The modelling considered base fare levels, concession impacts, and zone configurations. Key findings included:

• Flat fares generally increased patronage but reduced revenue.
• Zones Crossed and Zones Used systems offered better revenue outcomes with modest patronage trade-offs.
• Including concessions improved equity and patronage but further reduced revenue.

The analysis also highlighted the importance of fare indexation strategies. Transit agencies with flat fare systems, in particular, were found to be less likely to increase fares in line with inflation leading to greater calls on subsidies in future years.

Outcome

NineSquared’s work provided the Department with a clear, evidence-based framework to evaluate future fare options. The modelling demonstrated that while no single option is universally optimal, each has trade-offs that can be tailored to Queensland’s unique transport landscape.

Learn More

Find out more about NineSquared’s expertise in transport economics and public transport advisory.