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Tuesday, 5 August 2014

Are Periodical Ticket Discounts Really that Great?

Monthly, quarterly and annual MyMulti Tickets will not be available for purchase from 1 September 2014. This is part of a move to a totally "pay as you go" model for Sydney's public transport under the Opal card. 

Some argue that the price of periodical tickets is too heavily discounted in Sydney. This partly stems from comparisons between the price of MyMulti Yearly and Quarterly tickets and the cost of using an Opal card. The logic seems to be "if the Quarterly and Annual ticket price is more favourable than using Opal, then the periodical ticket products must be too cheap".

But if we were to compare MyMulti prices with monthly and annual fare prices in other cities, Sydney's periodical tickets are actually very expensive.

An Annual MyMulti 1 ticket costs 530 times more than a single train trip. In London, an Annual ticket is 430 times the price of a single train trip. In European cities, the discount is even greater. Annual tickets range from 211 times the single ticket (Amsterdam) to just 115 times in Munich.

As the average resident of Munich and Zurich makes 400-500 public transport trips per year, it is not surprising why the take up of periodical tickets in those cities is so high.

Sydney's recent flight from periodical tickets goes against the tide of international practice, which is to embrace them. The international bible of public transport best practice is the Hi Trans Guide. Among the seven top measures it lists to improve public transport is to "cut fares through the provision of integrated season tickets".

The benefit of season or periodical tickets is that, once purchased, passengers have an incentive to make as many public transport trips as possible. Each additional trip comes at no extra cost. 

But in order to encourage the purchase of a periodical ticket, the customer needs to be satisfied that they will make enough trips in the future to justify purchasing it upfront. That's why European cities keep the price of periodical tickets low. 

Having an Opal card is very convenient for passengers, but it could make a much greater contribution to growing public transport use if it included periodical fare options. London's Oyster card does this. And why not make it even easier by allowing users to specify when automatic payment deductions are made, such as on their fortnightly or monthly payday?

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