Free Fare Incentives to Shift Rail Demand Peaks--Medium-term Impacts

Medium term outcomes of a strategy to reduce peak rail overloading in Melbourne Australia are explored. It aims to shift peak ridership to pre-peak trains using a free ‘early bird’ ticket valid for central business district (CBD) station exit before 7:00 a.m. The program costs $6M in lost farebox (2008) and around 8-9,000 passengers use the ticket/ weekday. Ticket use is increasing (1.7% p.a.) while overall rail usage is stable. A 2008 survey found that 23% of free ticket users had shifted time of travel to the pre-peak; 2,000- 2,600 each peak. The ‘Medium Term Growth Effect’ hypothesis suggests take-up of pre-a.m. peak travel will take time because passengers must adjust life styles to enable early commuter travel. Results confirm this; early bird use is increasing by 1.7% p.a. Another hypothesis; the ‘Winter Dark Morning Effect’ suggests that passengers will time-shift commutes to pre-peak less in dark winter months. While some trends are consistent with this no overall link between darker winter months and lower usage is found. This is due to lighter (and milder) winter mornings in Melbourne compared to Northern American and European cities. After early bird pre 7:00 a.m loads increased 41% reducing pressures for purchase/operations of new peak trains saving 2.5-5.0 trains (2008) to a forecast of 8.05 trains in 2038. Financial analysis suggests the savings would substantively cover financial costs of free fares and benefits will increase over time. Wider economic benefits increase viability. The paper identifies key success factors for wider application and areas for future research.