About half a year ago, I launched the Opal or Not website that compares the fares of Sydney’s new Opal transit smartcard and the paper tickets it replaces. As I’d hoped, this quickly went viral, bringing attention to Opal’s hidden costs and ending up in the Sydney Morning Herald.
Now getting my mug in the SMH is all well and good, but my end goal was to “make Transport for NSW to come up with a saner fare scheme”. Instead, TfNSW sent me a rather bizarre good cop/bad cop letter telling me to they’d love to cooperate, but implying they will sue me if I don’t stop using the Opal logo. When I offered to play ball, changing the logo as a token of good faith, they sent me a 26-page report about all the things with my site that they were unhappy with; quite handy, as you’ll see later, but not exactly the kind of action I was hoping for.
Meanwhile, as they prattled on about how they’re committed to transparency yadda yadda, another arm of the same bureaucracy has been steadfastly stonewalling my request for a copy of that 7% report. At time of writing, after half a year of increasingly absurd effort, they have yet to confirm in writing that the “7%” report they keep talking about even exists. And maybe it doesn’t, because in other places they claim the figure is 4%!
Well, fine. If TfNSW is not going to release their report, based on their vague projections, I’m going to write my own report, based on the cold hard data of the over 130,000 fare comparisons made on the site. And here it is.
The short version
|Who will pay more with Opal?||Cost of Opal to Sydney commuters?|
|Transport for NSW report||4%? 7%? ||They’re not telling|
|Opal or Not report, model A: optimal tickets
||61% ||$98 million/year |
|Opal or Not report, model B: estimated tickets
||26% ||$54 million/year |
Here’s how you can help fix this.
The long version
Now there’s two basic requirements for Opal or Not’s data for it to be of any use: it has to be representative, and it has to be correct.
So the first question is, are the 130,000+ fare comparisons made on Opal or Not a representative sample of the Sydney commuter, instead of (say) an escapist chimpanzee recalculating his fare from Taronga Zoo to Bondi over and over again? In terms of sheer sample size, it should certainly qualify: 812,000 people use Sydney’s public transport on an average weekday, so even if we discount every other comparison, we’re reaching a good tenth or so. For comparison, the Bureau of Transport Statistics Household Travel Survey 2011/12 (HTS) is based on the survey responses of about 3,000 households.
A more useful comparison of the quality, though, is to compare Opal or Not’s mode distribution against the HTS. This isn’t entirely straightforward, since Opal or Not compares door-to-door ‘journeys’ (eg. bus & train) while HTS counts single ‘trips’, but by making the not unreasonable assumption that a bus & train journey equals one bus trip plus one train trip, we get a 70/26/4% split for train/bus/ferry, while HTS has 59/37/4%. This is unsurprising, since Opal for buses remains very much a work in progress, but it does skew the results a bit since the average train commuter loses more from Opal (an extra $65 a year, to be precise) than the average bus commuter. Long story short, if we adjust the mode split to match the HTS, this shaves $5.7m off the paper advantage.
“But wait”, I hear you say, “even if the sample population is representative, what if the calculation itself riddled with errors”? To make sure all potential problems are covered, I’m going to go through TfNSW’s llst of 18 “issues” with the site and analyze their impact on the results one by one. You might want to a brew a stiff coffee before you read on.
1. Incorrect fares shown for some train journeys
Opal or Not computes train distance bands based on actual distance, not wacky-world fare distance, which can throw off estimates by a few km. This means that users whose trip lengths are right on a fare boundary (10 km, 25 km, etc) may be quoted fares for the wrong fare band.
However, Opal and MyTrain bands are defined identically by distance. This means that, even if a user is quoted the wrong zone, they are quoted the correct fares for those zones, and the comparison is thus fair. No adjustment needed.
2. Train journeys that cannot be calculated
There are some cases where the underlying Google Directions API only offers buses, because they’re much faster, so Opal or Not cannot estimate the train distance. But if the site can’t calculate the route, it can’t get the comparison wrong either. No adjustment needed.
3. Incorrect morning peak times for Intercity trains
Opal or Not assumes that morning peak is always 7am to 9am, when it’s actually 6am to 8am when traveling from Intercity stations. However, the website does not ask for exact times, it only asks for time bands, so the relatively few users affected can self-adjust.
But yes, those who do enter 6:30 Intercity trip as “before 7 AM” will get quoted an off-peak Opal fare when they should be paying a peak fare. Since there are more of these people than there are 8:30 Intercity travellers who get quoted peak for off-peak, the net effect of the error is in Opal’s favor: the true cost of Opal is higher.
4. Weekend off-peak fares not included
Opal or Not does not implement train off-peak fares all day on Saturday (or Sunday) for either Opal or paper tickets, instead applying the weekday off-peak rules. This has two effects:
- Peak period travel on Saturday is incorrectly calculated at weekday peak fares. This inflates the cost of both Opal and paper equally, producing no net effect.
- Off-peak travel is calculated with weekday off-peak periods. This gives an unfair advantage to Opal, since this grants ~26% of travelers the discount, vs. ~16% for paper travel. (The actual figure is, of course, 100%.)
All told, the net effect is again in Opal’s favor.
5. Description of MyBus and MyFerry tickets as zonal
This is a wording quibble: MyBus and MyFerry tickets are based on distance travelled, and strictly speaking should not be called “zones”, since that usually implies geographical areas. (By comparison, MyMulti is a true zonal ticket.) Fair enough, but obviously no impact on fares.
6. Change in method of calculating bus fares
The website currently assumes that that MyBus sectors map one-for-one to Opal’s distance-based fares, which is not the case. However, without access to the exact sector data, which TfNSW does not make public, it’s not possible to compute what difference this makes in practice. Opal claims some fares will be cheaper, but the SMH has some cases of people whose fares nearly double, and as we know, while TfNSW probably has their own estimates for this, they refuse to release them. I’ll give them the benefit of the doubt and call it a draw: no impact.
7. Incorrect MyMulti ticket recommended for some journeys
Opal or Not’s determination of what MyMulti ticket to use combines bus and train distance bands, meaning issues 1 and 6 (train and bus distances) apply and users may be quoted the incorrect MyMulti zone. Again, since there is no systemic bias in either direction, this alone does not bias results.
There is, however, one important source of error in the MyMulti calculations: they assume that train fares bands map directly to MyMulti zones. This is correct for trips originating or terminating from the CBD, but will incorrectly compare to a MyMulti 1 for someone traveling from (say) Blacktown to Parramatta, actually MyMulti 2. The diagram to the left attempts to demonstrate this, with the top ‘ovals’ representing how Opal or Not calculates trip costs and the underlying colored bands showing how the actual MyMulti zones apply. The bits marked “+1/2” show undercharging, whereas “-1/2” shows overcharging: for example, somebody traveling from Hurstville to Parramatta would have been computed as MyMulti 3, when actually a MyMulti 2 would suffice.
We can attempt to correct for the error by applying the known distribution of train travel distances to major destinations in and out of the CBD (both courtesy the Compendium of Sydney Rail Travel Statistics, 8th Edition, RTS), times the number of train travellers using MyMultis and finally the cost incurred (or saved) from using the wrong MyMulti zone. The math is fairly hairy and makes a few rather generous assumptions (eg. that each station’s patronage follows the general distance distribution and that the Inner Sydney statistical area is close enough to the rail CBD fare zone), but because the under- and overcharging tend to balance out, the net effect is fairly minor: $300k off paper tickets.
For completeness, I’ll note that the same issue theoretically applies to ferries. However, since ferries are a relatively minor form of transport and the overwhelming majority of ferry travel is to/from the CBD, the approximation used by the website is more than good enough for our purposes: Ferry 1 = MyMulti 2, Ferry 2 = MyMulti 3.
8. No provision for customers with complex travel patterns
Opal or Not is not a general-purpose fare calculator, but a single-purpose tool geared solely at making it easy to check how Opal will affect the cost of your commute. Per the HTS (Table 4.3.3), we know that commuting to work and school/uni account for the vast majority of public transport usage, so this means the results also represent the vast majority of Sydney’s public transport users. And once again, if the site doesn’t support a given travel pattern, then it’s not giving inaccurate results, it just doesn’t support it. No adjustment needed.
9. No consideration of the customer’s current ticket
TfNSW, and quite a few of my readers, think it “unfair” to compare Opal to monthly or quarterly tickets, for two distinct reasons: 1) people do not use them very much, and 2) they are not a good fit for some people. Let’s analyze these in detail.
First, do people actually use them? TfNSW loves to trot out the statistic that only 4% of ticket sales are periodicals, but this is highly misleading: if person A buys a yearly ticket once a year, and person B buys two singles every working day, only 0.2% sales will be for yearly tickets, even though 50% out of A and B use them. The best statistics for actual usage that I’m aware of are in RTS Table 20, which extrapolates from ticket sales and covers trains only: according to this, periodical tickets (weekly or longer) account for 50% of usage, with 8% using monthlies or longer.
At the end of the day, though, this is kind of irrelevant: Opal or Not is all about showing people the best possible fare, and I can only assume that its users are rational economic actors who choose the cheapest fare. In the same way, I’ll give Opal the benefit of the doubt and assume that its users are religious about tapping on and tapping off, so they never get accidentally charged the maximum fare — a lip-smacking $8.10 if you forget to tap off the train!
The second objection is that people are rational and choose not to opt for periodicals because, when accounting for vacation etc, they cost more. However, since a train quarterly covers 13 weeks of travel but costs the price of 10 weeklies, virtually everybody who uses the train would actually be better off buying them, even if they take two weeks off that quarter. For buses and ferries, TravelTens are unequivocally more flexible and cheaper than Opal if you have even slightly irregular commute patterns.
What’s more, comparisons for monthly and quarterly tickets were introduced only after launch, meaning the initial 5,000 or so users did not benefit from them, and a rounding error meant that the next 10,000 or so had quarterlies incorrectly computed as 12 weeks instead of the correct 12.85, again a bias in Opal’s favor.
All in all, I’m going to call it a draw and say no adjustment needed. If you have better stats, or thoughts on how to quantify this, I’m all ears.
Update: By popular demand, I’ve taken a stab at adjusting the pricing comparisons to be in line with ticket usage from RTS Table 20. This is rather rough and ready, because Opal or Not does not collect the user’s actual ticket types or record non-optimal paper fares, but long story short, this shaves $44m off the paper advantage and converts 280k people into the Opal camp, meaning only 26.46% pay more with Opal. This, mind you, is still about 4x more than what TfNSW is claiming, and it goes to underline what we’ve seen from previously: those who win from Opal win a bit, while those who lose generally lose a lot.
The previous calculation is now Model A, and this version is now Model B.
10. Opal trip advantage not always applied
More specifically, the site does not cater to the case where there is less than 60 minutes between the trip out and the trip back. Again, since Opal or Not is a commute comparison tool and most people work/study more than 60 minutes a day, this scenario is irrelevant. No adjustment needed.
11. No provision for journeys with multiple transfers
Setting aside ferries, there are three possible realistic multiple transfer combinations: train/train/bus, bus/bus/train, bus/train/bus. The first and most common is already catered for, since Opal or Not can compute the fares between any two train stations, including transfers. For the second, Opal would be cheaper if you were currently foolish enough to purchase separate tickets, but as we know MyMulti is nearly always the better option even for a single bus/train transfer, much less two; not covering this thus tilts the balance in Opal’s favor.
So that leaves the third option, bus/train/bus. Getting good data on this is hard, but Bus Users in Sydney, 2002 p5 (not a typo, that’s the latest available) tells us only around 7% of bus journeys involve two buses, and Rail Travel Statistics 2012 section 3.2 tells us 17.7% of train users transfer to bus, from which we can determine a conservative upper bound of 1.2% travellers affected. Not that this helps Opal’s case any, as MyMulti will almost certainly wipe the floor with Opal for these poor people, but I’ll graciously not dock Opal’s score for this. In Opal’s favor.
12. Many NSW TrainLink Intercity stations not included
That’s because they were not covered by Opal at the time the service was launched, although support has since been added both to Opal and Opal or Not. Once again, if you can’t compare it you can’t get it wrong, so no impact on accuracy.
14. $2.50 Sunday cap not included
Neither Opal’s all-day-for-$2.50 offer nor the more limited Family Fun Day ticket it replaces is covered by Opal or Not. While this is clearly a win in Opal’s column, for the vast majority of Sydney’s commuters it’s a nice bonus, not an actual commute cost-saver.
The second complication is that since the Travel Reward is accounted for, this applies to only people who travel on Sundays without accruing 8 weekday journeys. Since Opal or Not does not ask about days of week, and I’m not aware of any TfNSW data for this, quantifying the size of this group is difficult.
All in all, no adjustment made, but underlying bias is in paper tickets’ favor.
13. Domestic Airport and International Airport stations not included
15. Opal Child/Youth fares not included
16. Opal Senior/Pensioner fares not included
Opal or Not is a weekly commute calculator, all these are explicitly out of scope and do not affect the accuracy of results. No adjustment needed.
17. Daily tickets not included
The Opal $15 daily cap is included in the site; however, the $23 MyMulti day ticket is not. This skews the results in Opal’s favor.
18. Fares for services and classes of Opal cards that have not yet been announced
I had to read this one twice: TfNSW apparently considers it a flaw that Opal or Not does not cover Opal fares that have not yet been announced? I’ll be happy to address this once somebody lends me a time machine. No adjustment needed.
We’re done! Almost, anyway, since magnanimous soul that I am, I’m going to include a large source of error that TfNSW did not notice:
Bonus. Off-peak fares on trains
Off-peak fares are frequently cited as a major win for Opal, and while Opal or Not now supports them, this option was not available initially, affecting the first 26,925 comparisons. Looking at the additional statistics kept for off-peak fares, we can see three general trends:
- The 15% of train travellers who travel outside both peak periods are unequivocal winners, Opal saving them around $200/year.
- The 20% who have one peak and one off-peak trip come out a wash, gaining or losing less than $100/year.
- The 65% who hit both peak periods pay on average $270/year more.
So while the majority still lose, the gains of the small group of winners are so large that they translate to a 30% decrease in the overall cost. Adjusting the data accordingly (see spreadsheet), this docks some $14 million off paper’s advantage. Better start waking up before 7 AM!
Of the 20 potential issues identified by TfNSW and yours truly:
- 4 bias the results in paper tickets’ favor, and are accounted for by adjusting down by $20m,
- 3 bias the results in Opal’s favor, which means Opal’s actually even costlier than this report indicates, and
- 13 have no measurable impact.
In other words, this report bends over backwards to give Opal the benefit of the doubt, and it still comes up a cropper to the tune of $54 to 98 million dollars.
Call to action
So what should Transport for NSW do to fix Opal? I have two simple suggestions:
- Allow bus, train and ferry transfers. A wide array of wise men all agree: if Melbourne, Perth, Brisbane and Adelaide can all do it, there’s no sane reason why Sydney can’t. Penalizing modal transfers makes Opal a huge leap backwards for Sydney transport.
- Lower the base fare and drop the Travel Reward. The “Travel Reward” is supposed to encourage using public transport, but it ends up discouraging it for many people, and only encourages gaming the system instead.
If you agree, let the Minister for Transport know. Gladys, the buck stops with you here: it’s not too late to fix this, and turning Opal from a PR disaster into a win for your Sydney voters will only take a stroke of your pen.
And if you’re a commuter who wants to hedge your bets, lock in your savings before Opalcalypse on September 1st, 2014, and buy a quarterly or yearly ticket today.
26 thoughts on “The Opal or Not Report: The hidden $98 (or $54) million fare hike”
Good post, but your analysis at point #9 is still deeply flawed, which affects some of your other points too as you assume rail-only travel is more expensive on Opal, which is almost certainly not correct on average.
“I can only assume that its users are rational economic actors who choose the cheapest fare.”
This is certainly not correct when it comes to this point – if that were the case, why would so few people be buying the longer term tickets, which offer real savings? We don’t need to know why really – we just know that they aren’t. You have the numbers – only 8% do.
You then state:
“Opal or Not is all about showing people the best possible fare.”
Okay, fine, but then it’s totally disingenuous to apply the results from your “best case scenario” of everyone buying quarterly tickets, and then extrapolating into made-up $100 million fare hikes. Those numbers are obviously wrong – because 92% of train travelers aren’t using quarterly tickets! It doesn’t matter if they should – they simply aren’t, and switch to Opal therefore WILL SAVE MONEY, for the most common scenario of a weekly train commuter.
I can’t take you seriously until you fix this – the data is there, you can just adjust it by changing all rail only journeys so that the quarterly discounts only benefit 8% of journeys. But I think you never will make this adjustment, because you know this will change the results materially.
Doing that is actually fairly complicated, because the website only records the difference between the Opal fare and the best paper fare. This means I don’t know the aggregate difference between the weekly fare and the Opal fare, which is what you’d need for that adjustment. But if I’m missing something and you think it’s easy, then please make a copy of the spreadsheet and go nuts!
It’s also worth remembering that Opal or Not (and this report) focuses on the hard core of Sydney’s 812k daily commuters. There’s another half million of so occasional users in an average week, virtually none of which whom be using periodicals, so those ticket sales stats are not a great fit.
Those half million will include a lot of PETs.
As Jeremy points out, the elephant in the room is item 9.
You say that “Opal or Not is all about showing people the best possible fare”. That’s fine, and I think we all know that for Monthly/Quarterly/Yearly train ticket holders, Opal is worse. Likewise for many MyMulti ticket holders, as changing modes is badly handled in Opal (well, in Sydney in general).
You can’t, however, extrapolate your statistics into an extra $98m that the state government is ripping out of people’s pockets, because it’s not true. 93% of train commuters are on Weekly or shorter tickets, and most of those would be better off on Opal than what they are currently on. You are twisting the Opal or Not data in a way that you shouldn’t, to come up with $98m. If everyone was on the cheapest tickets, it would be true, but we have plenty of data to show they’re not. It’s not the Opal or Not data that’s the issue, but you just can’t use it the way you’re trying to.
A better estimate would be to use the numbers from the RTS. I plugged them into a spreadsheet, made various assumptions (eg how many weeks people work, that zones % from your spreadsheet are consistent across ticket types etc), and my rough estimate is that train-only commuters (ignoring MyMulti users) would be collectively better off by around $40m/year using Opal. That’s a far cry from $98m worse off, and that’s why your analysis is flawed. I can’t easily calculate the impact from MyMulti users, and my expectation is that it would be negative for Opal, but as a whole, train commuters will be better off.
I realise you did an adjustment in Model B, but you’re still using the same starting point, which is flawed.
The way to do this would be to start collecting the actual customer data in Opal or Not. Ask the customer to select which ticket they are currently using when presented with the comparison. You could then compare the Opal saving to that, as well as the best longer alternative. Then you’d have an analysis worth looking at.
Not quite following you here. The whole point of the “Model B” adjustment is to use the RTS numbers, and after that adjustment, the majority of train users are slightly better off. However, the net effect of Opal is still negative because the losers lose so much, and it’s precisely the MyMulti users you’re ignoring who suffer the most, eg. $728/year in the case of a Dee Why-to-Central commuter using a MyBus 3 & the train.
1. In the case of MyMultis, Opal or Not is recommending Quarterlies, while the majority of trips for Multis (87%) are actually on Weeklies. So while in many cases the Multi users will still be worse off, the amount by which they are worse off is significantly overstated by Opal or Not.
So you need to make an adjustment for this in the Mode Split Adjustment tab. I’m assuming that you don’t have this data, and that the only pieces of data you retain are the items in your Mode Split Adjustment tab ie whether Opal is better or not, the mode or combination of modes, and the max $ saving for each commuter.
You could probably run all of the combinations of train (distance 1-5) and bus zone (1-3) to get an estimate of Opal vs MyMulti Weekly vs MyMulti Quarterly, and then use this to adjust the $ in the raw data. It would be a bit of work.
Simpler may be to do a rough adjustment, based on the fact that Quarterly Multis are $9-$11 cheaper than the corresponding Weekly. This assumes that all bus+train trips for which recommendation was Non-Opal are MyMultis. If this isn’t correct, then you’d have to make an additional % adjustment downwards, but I think it’s likely to be pretty close. So if you adjust by an average of $10/week for 87% (the proportion of Multis that are weekly) of the bus+train trips, you’d get a drop in savings from $7,225,628 to around $1.7m. The Opal data (savings of $1.6m) may also need to be adjusted up, though it it’s more likely that Opal is in front because a Quarterly MyMulti is was not appropriate. It’s hard to know whether and how much to adjust by, so perhaps just leave.
I haven’t made any special adjustment for monthly or yearly, but these roughly net out based on the journey counts.
Bottom line is that Opal vs Non Opal may well be pretty similar for bus+train.
2. Similarly for train only journeys, you have counts of 53,576 and savings of $15.2m for Non-Opal, but again this is based on Quarterlies. Weighted by trip distance, Weeklies cost $9.50 more than Quarterlies. Making the same adjustments as above, using 82% (the proportion of MyTrains which are weekly), in fact gives an adjustment of -$21.7m, and the Non-Opal amount to go to negative $6.5m. This makes sense, as we’re expecting 93% of train-only commuters to be better off. Again, it assumes that all train trips for which recommendation was Non-Opal are MyTrain trips, which may overstate things. At worst case, the adjustment would still be in excess of $16m, and based on my post yesterday, it’s likely to be closer to $19m.
Again, I haven’t touched the Opal amount as it’s unclear whether it needs to be adjusted.
3. Your Quarterly adjustment methodology is wrong. Take the MyTrain Weekly for example. You’ve calculated an adjustment factor of 28.57%, relative to a Quarterly ticket. That’s fine. But the way you’ve calculated that adjustment means that it needs to be applied to the raw cost of the tickets. You’re applying it to the sum of the savings ($27m), which is a much smaller number than the raw cost would be. This means you are way understating the adjustment required for Opal. As I’ve suggested in (2) above, the adjustment for the Non-Opal train-only users is likely to be around $9.50/person/week, and between $16m and $21.7m. Either way, it’s still a lot more than the $3m adjustment for Weekly MyTrain your method is coming up with, and even more than the $7.1m total adjustment your method is arriving at.
As per my previous post, the final Opal/Non-Opal number for train-only trips mathematically has to be in favour of Opal.
4. In both Model A and B, you’ve adjusted both the sets (Opal and Non-Opal) of the count, but only the savings $ amount for Opal. So in Model B, you have 34,669 people still being worse off by $28m, which doesn’t make any sense given that it took 86,772 to be worse off by $28m in the raw data.
You need to adjust both the Opal and Non-Opal $ amounts, as the Non-Opal amount will be much less than $28m after adjustments.
However, as per (1), (2) and (3), you need to correct the earlier calculations first.
In the end, who is going to be worse off?
– almost all train-only users on monthly or longer periodicals
– most ferry users
– most bus-only users on monthly or longer periodicals, plus bus users who currently use a TravelTen, but less frequently than every day
– almost all multi-mode users on monthly or longer periodicals
– some multi-mode users on weekly periodicals
Who is going to be better off?
– most train-only users
– most daily bus users
– some multi-mode users on weekly periodicals
My own case – I work 4 days a week most weeks (sometime 5, sometimes 3), and catch the train, so a weekly ticket is of marginal benefit. I also bike to work occasionally, so there’s no point in buying a weekly if I ride even 1 day a week. So I would have to wait in the queue every morning to buy returns. For me personally, Opal is great, as it’s like an option on a weekly, and saves me time not buying a ticket. I also often end up going to work late or arriving home late, so I get the benefit of the off-peak single trips. So in my case, the savings on Opal are actually greater than what Opal or Not calculates, because it assumes you do the same thing every day/week.
Opal or Not was great for me, it introduced me to Quarterly tickets which I didn’t know existed before. I’ve started using them and even got a few of my colleagues onto them as well. Now I think how stupid I was all those years buying a weekly ticket every week! Even with my annual leave, the quarterly ticket still comes out way ahead over the year. Anyone buying weeklies for more than 10 weeks in a 13 week period (or buying more than 40 weeklies in a year) is absolutely doing it wrong.
Although I guess this is all a bit of a moot point now that the tickets are being discontinued and I’ll have to switch to Opal and go back to paying the weekly cost (minus $1 per week).
From switching from weeklies to quarterlies I can save over $400 a year.
But switching from weeklies to Opal I can only save about $40 a year.
It’s funny because I do remember lots of marketing pushes about the discounts for monthly and quarterly tickets, but I guess they didn’t market it quite enough. These big discounts on periodicals are intended to offset the “cost of sale” – primarily the cost of ticket agents at busy times like Monday mornings. Because Opal also avoids the cost of ticket agents, it’s felt that periodical users can go back to paying more of their “fare share” since they do travel the most often.
Jeremy, not sure where you got “cost of sale” saving as the intended benefit of periodicals- sure this is one dimension (maybe more relevant 10 years ago) but a secondary one. Certainly there is no “cost of sale” benefit for, say, Transport for London when someone loads a monthly TravelCard on their Oyster card.
The primary drivers that I have seen in various literature, including Annual Reports of the former Sydney Urban Transit Authority and Public Transport Commission, are that periodicals provide baseload consistent revenue.
An extreme E.g., if you consider ferries, there is a strong seasonal (tourist etc) fluctuation, and planning capital infrastructure for two nice months a year is tough, so if you can get year-long revenue certainty, that is something which has value to the operator, and as a consequence of price incentives to this end, to the traveller.
Periodicals also encourage a commitment to transit and provide a motivation for consistent baseload transit use- for ancillary journeys like shopping not just the commute.
Due to the comparative massive infrastructure oversupply on weekends and off peaks, this additional use has little or zero marginal cost to the operator, and encourages habitual use.
There are also two dimension you need to break-out here. Sure rail-only periodicals represent some direct discount against a single rail-journey ticket (or single tickets embody a penalty for lack of revenue consistency). But zone based tickets like MyMulti, do not represent a “discount” as such. I suspect your comments reflect a particular Sydney prejudice, that an individual ride on a mode is a commodity in its own right, as distinct from the door-to-door or chained journey.
Strictly speaking, a direct comparison of MyMultis with single trip fares does not reveal a “discount”. It simply reflects a comparison between two different commodities, one called “a ride on a bus” and one called “mobility”. The complex broken and chained multi-modal journeys that occur in true multi-modal transport systems (like in London or Zurich) are composed of many costs other than the fare itself, including waiting time between transfers, walking between transfers etc.
If you really do want to compare say a weekly MyMulti against a week of Opal, or cash fares, for the purpose of claiming that MyMulti is “discounted” what you really need to do is examine an actual, or representative multi-modal journey, calculate the Generalised Cost of the journeys (to the user) including waiting time, waiting conditions/ multipliers for weather exposure, interchange walking time within than typical journey and add that to the $ cost of the ticket. Then compare that with a week of equivalent length single mode tickets.
t’s very difficult, and usually only done by academics. But what I can tell you is that multi-modal periodical usage has been falling steadily as price increases have outstripped inflation and single-mode fares for over ten years. That is what economists call “revealed preference”, and I can assure you, that when sales are declining relative to single-mode fares (due to cross-elasticity of demand, or plain old price eleasticity of demand), it is a statement of plain truth that single-mode fares, not the multi-mode periodicals, that are seen as comparatively better value. That is, customers actions reveal that, when all Generalised Costs are said and done, it is single-mode fares that are increasingly discounted, not zone periodicals.
David, Jeremy was talking about the discount of longer periodical tickets (single or multi mode) compared with weekly (or daily/single) tickets, rather than saying zonal tickets are a discount over single-mode fares. As you say, this is another dimension.
Thanks David, and good to see the link to your blog with some more related commentary. As Jonathan implied, I was mainly limiting my comments to the differences between weekly tickets and the longer term periodicals, which have the more generous discounts. I agree the discussion becomes much more complicated when considering multi-modal periodicals versus singles, but that’s a lot more than I was intending to address.
I understand that consistency of revenue is another “dimension” that explains how long-term tickets benefit the transport agencies, and that’s certainly part of it. But TfNSW has talked a lot about how they are trying to reduce ticket selling costs, particularly the problems that have plagued the system on Monday mornings as large numbers of rail commuters queue up for their weekly. There is a very real cost in providing each one of these sales, particularly with high cost of union labour and the relatively short period that high levels of staffing are needed (say 6am to 9am on Mondays, only three hours per week, simultaneously at hundreds of stations across the system). Although I don’t have any academic sources to back it up, I thought this Monday-morning problem was the main driver behind incentivising quarterly/yearly tickets, even if they forgo about 3 weeks’ revenue (with quarterly tickets costing about 10 weeks’ fares but valid for 13 weeks).
And another thing, you say only 8% use the cheaper tickets (so who cares if less than 1 in 10 are forced to fork out more money as long as you’re not one of them?) – but is that 8% of all train users (including people who may travel only once or twice a month), or is that 8% of trips taken are taken on these tickets, 8% of ticket sales are these tickets, or 8% of regular weekly commuters. It makes a HUGE difference what the calculation is actually done on – can we have the raw data please?
The “raw data” is in RTS Table 20, but it’s only ticket sales extrapolated by fixed factors (Table 28): for example, each quarterly ticket is assumed to be used 137 times. Where this number comes from and how well it correlates to actual usage, I have no idea.
Can I have the cost of Opal on Light Rail services?
Even though it’s not available on Light Rail, annual tickets are being eliminated anyway.
As a result, my commute costs more because of Opal — and I can’t even use it on my commute!
You can still renew your annual MyMulti ticket before Sept 1, and light rail will be available on Opal before it expires. Light rail uses the bus fare bands under Opal by the way, so it will be equivalent to transferring to/from a bus.
I presume you’re a TfNSW employee, as Opal on Light Rail, specifically it’s fare structure, is not published publicly. This is a pattern, TfNSW complaining about people pointing out issues with Opal as they’re going to be fixed “Real Soon Now We Promise”. Full disclosure from the start could have avoided these issues.
Take a leaf from every other transit authority in Australia when they rolled out ‘smart’ ticketing: run both systems in parallel for a year, with 100% rollout, before you can the long term paper tickets. Opal isn’t fully rolled out, so the September deadline is foolish. Maybe if by September 2014 we have 100% rollout, look at sunsetting periodical paper tickets in September 2015.
TfNSW’s rollout of Opal may have started over a year ago, but already paper tickets are being canned and deadlines are set without even having the rollout complete. We don’t know when LR gets Opal, but we do know when tickets are being deprecated. The only indication of LR maybe getting Opal are scanners at Central which have ‘do not use’ stickers on them.
This doesn’t address the another major flaw of Opal — unlike every other smart ticket, I cannot buy and recharge one with cash. This is another thing other states have got right.
They also don’t require a 200 page manual to calculate the fare. Switch to a simple 3-zone system for all services at a flat rate for all modes of transit, based on MyMulti. Then maybe more people will be able to afford to use public transit and take more cars off the road.
Just FYI, I’m fairly sure Jeremy doesn’t work for TfNSW. The Opal fare scheme for light rail, including free bus transfers, was leaked in a planning document a while back, although TfNSW has indeed not said anything about this publicly (or at least intentionally!). A launch date of 2015 has been mentioned though.
Nice work Jani 🙂 It’s been a while since I’ve read a piece of journalism this thorough, & it’s telling that it was on a blog 🙂
Thanks for doing all this work and writing it up, I’ve done similar calculations myself so I know I’m going to pay more, but haven’t seen much in the media or extensive analysis like this so top effort.
I have a request to you though, or to anyone reading this –
If anyone has a template complaint letter that I could use to send to the Minister, I’d really appreciate it. I’ve complained before that I will pay more when I can no longer buy the Yearly MyMulti3 and they reply with things like “oh but if you’re sick or have a holiday you don’t pay under Opal so you’re wrong”. So I need to complain again with a stronger letter that they will take seriously. I’d love to have the information to back it up with figures and calculations so that they can’t refute it and fob me off so easily.
Thanks in advance!
I don’t have a template letter, but I think the key here is just to be reasonable and fair about your calculations, like I’ve encouraged Jani to be about the quarterlies. In this case, estimate how many weeks of annual leave and sick leave you have, and include that in the calculations. For example, if you have four weeks’ annual leave and about one week of other leave, use 47 weeks as a multiplier when calculating the cost of Opal. You should still find that Yearly MyMulti costs quite a bit less so your point will still be valid, yet you will counter their argument.
Maybe I’m not doing it right, but your bus fare comparator seems very generous to Opal. I occasionally use a MyBus3, travelling what would be 9 sections under the old system. The MB3/T10 card is $36.80, as your site confirms. But if I key travelling one day a week, while it correctly shows $7.36 for the T10, it shows Opal as $6.30. The official Opal site has in individual BM3, 8km+ journey at $4.50, and prices the full week’s travel (8 charged trips) at $36, justifying their claim that Opal is ‘even cheaper’ than T10, by some 80c/week in this case. Five days travel using your comparator is showing an Opal cost of only $25.20, in which case I’d buy one in a heartbeat. Is there some subtlety I’m missing here?
Can you send me a screenshot? For MyBus 3 x 5 days, I get $36.80 vs $36, and for 1 day it’s $7.36 vs $9.
Nah, weird, I can’t replicate it any more, either at work or at home. Given my erratic schedule, a bus T10 is still the way to go.
Clearly the Opal was intended to give everyone currently buying a ‘weekly’ train ticket a ‘fractionally’ cheaper experience if they use Opal 10 times a week. Outside that: monthly/quarterly ticket, random T10 or Multi buyer, single trip buyer, part-time user; every else is worse off.
(Although, it lokos like my random late night single train ticket will come down from $5.20 to $3.80 with an Opal, so I just might get one for that use only…
Anyone who takes 2 bus trips to work will be infinitely better off due to the free transfer. This fact will also give immense flexibility to bus users who previously might have walked an extra kilometre to avoid having to take two busses.
The key to the Opal card is that it gives the user flexibility as opposed to the rigidness of the Quarterly — On the train, you can travel ‘the other way’ with your opal card and have it count for your free trips, while for your quarterly you are stuck with travelling in between the stations listed.
As another example on my Newtown to Hurstville weekly, I tried to get off at Central but the gates rejected my ticket and the attendant refused to let me out because Central isn’t ‘between’ Newtown and Hurstville. What a crock. Now i can get off at Town Hall, pick up a loaf of bread at Woolies then get back on the train all for free and without being treated like a criminal.
Once this website starts detailing the benefits and flexbility of opal, you may have a different story to tell than ‘price hikes’.
You’re right about bus to bus transfers being useful and. But someone with a bus-train-bus, or bus-ferry-bus, commute will pay for buses on both ends! These commuters are already penalised by a transport network that is probably fairly slow and inefficient for their particular journey. Now they get to pay even more for the privilege of working or living in an inconvenient spot! (Bus train bus Opal journeys in peak hour will reach the $15 daily cap, for $60/week, compared to MyMulti 1 at $46/week or MyMulti 2 at $54).
FYI, Central is indeed not between Newtown and Hurstville under the old system – you are supposed to transfer at Redfern. But I agree that system was pretty old-fashioned.
Can we all chip in funds to complete a paid FOI request for the missing report from TfNSW?
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