Low Cost Flat Public Fare Policy: Induced Demand, Mode Switching and Policy Beneficiaries

Abstract

This study analyses six waves of cross-sectional survey data collected both before and after the introduction of a $0.50 flat fare structure across all public transport modes operating within Queensland Australia. The frequency of public transport trips is reported from 650 to 700 respondents per wave across each of the six waves of data collection, including information on trips that are reported as being trips that would have occurred irrespective of the low fare structure, trips that occurred solely as a result of the low flat fare structuring being introduced, and public transport trips that involve switching to public transport modes from some other mode of transport. Our findings suggest that the low fare structure led to increased public transport trips due to induced demand, with much less scope for mode switching behaviour. Further, the primary beneficiaries of the fare policy appear to be younger lower income individuals and/or those who are already regular public transport users. As such, consistent with the introduction of low or zero fare policies in other jurisdictions, the introduction of a flat $0.50 fare in Queensland has resulted in increased public transport patronage for some groups, while only limited mode switching behaviour is observed to have occurred.