CASH OR PREPAY? MOTIVATIONS FOR PASSENGER PAYMENT

Abstract

Against a backdrop of an increasing trend towards prepay-only bus services in Sydney, Forest Coach Lines (Forest), a private bus operator operating services in Northern Sydney, has been surprised that uptake of their prepay tickets has not been higher. Despite the discounts and convenience offered by their prepaid tickets, cashless fares represent just half of all tickets used and 60% of peak tickets used. The first objective of this study is to understand the motivations driving payment use in order to determine why many passengers, and in particular frequent passengers, are forgoing the benefits of Forest’s two prepay ticket options and continuing to pay cash for their tickets. The scope and remit of the project evolved in February 2010 when the New South Wales Government announced a new simplified ticket system for public transport within the Sydney Metropolitan region. This new fare system, called MyZone, provided Forest’s customers with more prepay options, for the first time offering an integrated ticket that could be used between different bus operators and a multi-modal ticket which could be used on different modes. Given these significant changes for Forest Coach Lines, the second objective, to explore the effects that this new ticket system had on the payment behaviour of Forest passengers, was established. Following a critical literature review, the key variables influencing passenger ticket choice were uncovered. These variables, relating to journey frequency, type and purpose, as well as the socio-demographic characteristics of the passenger and their attitudes to travel, helped pose the four research hypotheses of this study. Using self-administered questionnaires, two passenger surveys were conducted, before and after the introduction of the MyZone ticket system, respectively, and served as the principal means of data collection. A range of statistical techniques within SPSS and Microsoft Excel — including factor analysis and logistic regression — helped to test these hypotheses. This study discusses the major findings of these surveys which show that prepay use is influenced by travel frequency, journey purpose and socio-economic status as well as respondents’ attitudes to travel. Furthermore, the fare chosen is significantly guided by journey type, with interchanging passengers more likely to pay by cash for their ticket without a multi-modal ticket available. With a multi-modal ticket introduced as a result of MyZone, these interchangers, who are significantly more likely to be younger and less affluent than other passengers, are abstracted onto prepay by this new ticket. This study examines the new ii prepay market created by this ticket, discusses the characteristics of cash and prepay passengers both before and after MyZone, and explores the significant differences in the attitudes to travel held by users of different ticket types. This analysis permits both objectives to be satisfied and all hypotheses to be tested, providing Forest with a better understanding of the appeal and usage of the different ticket types they offer. Finally, the limitations of the project are discussed along with recommendations regarding future research which can expand and develop this study.gainst a backdrop of an increasing trend towards prepay-only bus services in Sydney, Forest Coach Lines (Forest), a private bus operator operating services in Northern Sydney, has been surprised that uptake of their prepay tickets has not been higher. Despite the discounts and convenience offered by their prepaid tickets, cashless fares represent just half of all tickets used and 60% of peak tickets used. The first objective of this study is to understand the motivations driving payment use in order to determine why many passengers, and in particular frequent passengers, are forgoing the benefits of Forest’s two prepay ticket options and continuing to pay cash for their tickets. The scope and remit of the project evolved in February 2010 when the New South Wales Government announced a new simplified ticket system for public transport within the Sydney Metropolitan region. This new fare system, called MyZone, provided Forest’s customers with more prepay options, for the first time offering an integrated ticket that could be used between different bus operators and a multi-modal ticket which could be used on different modes. Given these significant changes for Forest Coach Lines, the second objective, to explore the effects that this new ticket system had on the payment behaviour of Forest passengers, was established. Following a critical literature review, the key variables influencing passenger ticket choice were uncovered. These variables, relating to journey frequency, type and purpose, as well as the socio-demographic characteristics of the passenger and their attitudes to travel, helped pose the four research hypotheses of this study. Using self-administered questionnaires, two passenger surveys were conducted, before and after the introduction of the MyZone ticket system, respectively, and served as the principal means of data collection. A range of statistical techniques within SPSS and Microsoft Excel — including factor analysis and logistic regression — helped to test these hypotheses. This study discusses the major findings of these surveys which show that prepay use is influenced by travel frequency, journey purpose and socio-economic status as well as respondents’ attitudes to travel. Furthermore, the fare chosen is significantly guided by journey type, with interchanging passengers more likely to pay by cash for their ticket without a multi-modal ticket available. With a multi-modal ticket introduced as a result of MyZone, these interchangers, who are significantly more likely to be younger and less affluent than other passengers, are abstracted onto prepay by this new ticket. This study examines the new ii prepay market created by this ticket, discusses the characteristics of cash and prepay passengers both before and after MyZone, and explores the significant differences in the attitudes to travel held by users of different ticket types. This analysis permits both objectives to be satisfied and all hypotheses to be tested, providing Forest with a better understanding of the appeal and usage of the different ticket types they offer. Finally, the limitations of the project are discussed along with recommendations regarding future research which can expand and develop this study.