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Are public transport fares more expensive in Australia than anywhere else?

13 August 2015
Part of our 'Thinking outside the box' series
A recent Deutsche Bank study led the Sydney Morning Herald to claim that 'getting from A to B on public transport costs more in Australia than anywhere else'. Is this being fair about fares or does this ignore important variations within cities and between cities?

The Deutsche Bank study compares “the minimum public transport fare” (p.10) “for single rides” on ‘tube rails or mono rails’ or suburban rail for cities without a metro (p.11) and Table 1 shows Deutsche Bank figures for selected cities around the world.

Table 1: Minimum fares from the DB report for selected cities

City Fare (USD)
Sydney, Australia US$2.92
Melbourne, Australia US$2.89
Auckland, New Zealand US$1.51
Singapore US$0.56
Tokyo, Japan US$1.42
London, United Kingdom US$2.23
Paris, France US$1.95
Capetown, South Africa US$0.56
New York, United States of America US$2.75
Toronto, Canada US$2.37

Source: page 10 and 11 of DB research, exchange rate at 31 March 2015

Is this being fair about fares or does this ignore important variations within cities and between cities? For Sydney’s train network, should we be using the minimum cash fare ($4.00) or the cost of a peak journey using the Opal smart card ($3.38) or off peak ($2.36)? And how should the frequent traveller discount be treated: How do we account for free access to the network when 8 trips in a week have been made?

To investigate Deutsche Bank’s claim, we look at the single fare, defined as the minimum peak smart card or pre-paid fare for a single metro or suburban rail trip (including upfront discounts such as that available in Perth for linking smart cards to bank accounts) as shown in Table 2 alongside the equivalent cash fare. This comparison will be over-estimating the minimum fare where there is a discount for frequent usage (as in Sydney and Brisbane) or where an annual pass is available.

Table 2: Minimum fares for selected cities in AUD$ for travel by metro or suburban rail if no metro

City Cash fare (AUD) Smart card fare (AUD)
Sydney, Australia $4.00 $3.38
Melbourne, Australia n/a $3.76
Adelaide, Australia $3.10 $1.84
Perth, Australia $2.00 $1.50
Brisbane, Australia $4.80 $3.35
Average, Australia $3.48 $2.77
London, United Kingdom $9.22 $4.42
New York, United States of America $3.84 $3.17
Amsterdam, The Netherlands $3.86 $1.24

Source: websites of respective public transport operators. Exchange rates at 17 April 2015

Sydney’s minimum train fares are expensive compared to Perth or Adelaide but comparable to fares in New York or Amsterdam and cheaper than the minimum fare in London. Cash fares are more variable and reflect varying strategy for encouraging smart card take-up. London and Brisbane have made cash fares very expensive relative to smart card fares whilst Melbourne and Amsterdam have abolished cash fares altogether. Cash fares remain cheap in New York as their smart card ticket is not yet deployed.

But what a traveller gets for a minimum fare journey is also significant. In Adelaide, the minimum fare buys you travel between adjacent stations whilst in New York a flat fare covers the entire subway. So better than looking at the minimum fare is to look at how fares vary by distance.

Graph of rail fares by distance for Australian cities

Figure 1: Rail fares by distance for Australian cities

Figure 1 shows the diversity of fares policies in Australia. Melbourne and Adelaide offer almost flat fare systems for their suburban networks whilst the other three cities vary fares by distance. Fares increase sharply beyond the boundary of Melbourne’s flat fare but Sydney offers relatively low interurban rail fares over very long distances. This comparison shows that Sydney is the most expensive city in Australia only for journeys of 10 kilometres.

Graph showing rail fares by distance for Sydney and selected overseas cities

Figure 2: Rail fares by distance for Sydney and selected overseas cities

Graph showing overall comparison of rail fares by distance

Figure 3: Overall comparison of rail fares by distance

Figure 2 shows that Sydney fares are cheap compared to some overseas cities. Amsterdam has the simplest fare structure with a standard flag fall and uniform fare per kilometre. Moreover this fare structure operates across the whole of the Netherlands. New York is like Melbourne with a relatively cheap flat fare in the area served by the subway but with commuter rail fares that rise very steeply outside of New York City’s five boroughs. Rail fares increase by distance throughout London and the adjacent counties and, like New York, fares increase sharply outside the area covered by Transport for London’s Oyster card. Fares are generally higher in London than for comparable trips in New York but Transport for London serves a wider area than New York’s subway which means that fares are cheaper for residents of the outer boroughs of Greater London than for residents of the counties adjacent to New York (i.e. over distances of between 15 kilometres and 35 kilometres).

Only one conclusion can be sensibly drawn from these chart: Australian fares are not the most expensive in the world and, particularly for longer journeys, Australian fares offer very good value in comparison to other cities around the world.

The differences in fare systems mean that considering only the cheapest ticket does not allow for a fair comparison of fares but looking at differences by distance is also not entirely fair as this ignores differences in the ability to pay (wage rates, disposable income), differences in typical trip lengths between cities and differences in the frequency, travel times and quality of service provided. Comparing fares is not an easy task.

Still, fare’s fair, whilst Sydney’s fares are not the cheapest, they are certainly not the most expensive in the world either.

1 Sanyal, S. 2015, The random walk: Mapping the world’s prices 2015, Deutsche Bank Research, Deutsche Bank AG, Hong Kong.