Managing peak period rail travel: How fares should be constructed to spread commuter loads in the post-Covid working environment

The capacity of Sydney's metropolitan railway system has been designed to meet the City's dominant mono-directional passenger flows in the morning and evening peaks which are in and out of the central business district (CBD). Achieving this is extremely costly given that the additional rolling stock, human resources and physical infrastructure necessary to satisfy pre COVID-19 peak demand is only required for a few hours on five days of the week.

As such, policies which can smooth demand across the day and week have the potential to save on costly capital expenditure by enabling public transport operators to squeeze more out of their existing resources.

COVID-19 has significantly altered travel patterns, but the effect is variable across different days of the week. Total peak period commuter travel has not only fallen but concentrated in the middle of the week. This has resulted in significant spare capacity on Mondays and Fridays. Further, hybrid working arrangements give individuals far more flexibility regarding the hours they spend in the office, enabling a potential spreading of the peak on any given day.

Regrettably, Sydney's opal system was adjusted in June 2020 to enlarge the number of hours customers are charged the peak fare.¹ Whilst the publicly proclaimed intention of the policy was to spread patronage across the day during the pandemic, by halving off-peak fares, this was constrained, in practice, by extending the peak time period. In the post pandemic environment this is likely to lead to the opposite of the avowed intention of spreading peak period patronage, particularly given that half price off peak fares have since been removed. The tables below illustrate the current and pre-June 2020 morning and afternoon peak periods for the Sydney railway network.

Lengthening the peak may enlarge farebox collection and offset some of the revenue losses caused by declining ridership, but the net effect is that it has become extremely difficult for commuters to avoid peak travel times. Increasing the peak fare window by three hours removes the incentive for workers to adjust their schedule and flatten the peak. Adjusting one's schedule by 30mins to an hour off the classic arrive at 9am and leave at 5pm schedule was quite achievable under the former peak period definition. For instance, someone travelling an hour to work tapping on before 7am to get to work and leaving work just before 4pm. Likewise, one could leave just after 9am and leave work after 6:30pm. Scope for making these adjustments has been made easier by flexible working arrangements introduced since 2020.

However, under the current peak pricing window, it is extremely difficult to avoid the peak without a very early start and/or late finish. Accordingly, many commuters will simply give up attempts to make deliberate adjustments and simply schedule travel once more in the high peak period. This places an unnecessary pressure on Sydney's public transport network for a busy half hour period in the morning and evening on only three days per week!

Whilst farebox revenue will fall if the peak window is returned to its pre-June 2020 setting, I make the case for this change on the premise that flattening the peak has much larger benefits in terms of reducing the transport network's maximum peak utilisation and corresponding capacity requirement. If this can be achieved, government will be able to avoid costly new transport infrastructure that provides minimal benefits. Instead, the focus can be directed towards operation of a reliable seven day per week public transport system that provides efficient and frequent services during the off-peak and on weekends.

Further changes could be made in light of the clustering of commuter demand on Tuesday, Wednesday and Thursday. To spread the peak load across all five workdays, a discount could be implemented for peak travel on Mondays and Fridays. Overall, constructing fare structures to smooth peak time travel has significant benefits to government in the form of reduced capital expenditure. By having an extended peak window, the present fare structure disincentivises commuters from making minor shifts to their travel plans to flatten the peak.