Low cost flat public fare policy: Induced demand, mode switching and policy beneficiaries

Source abstract

ABSTRACT Queensland introduced a flat AUD 0.50 fare across Translink public transport services as a six-month trial commencing on 5 August 2024, before making the policy permanent on 30 November 2024. This study aims to quantify the behavioural response to this deep, system-wide fare reduction and to identify the population segments driving the retention of existing demand, induced demand and mode switching. Distinguishing these responses is important because additional mobility and switching from other modes have different implications for accessibility, congestion, emissions, service capacity and public funding. The analysis uses 10 waves of repeated cross-sectional survey data, comprising a post-announcement but pre-implementation baseline and nine waves collected during the first year of the policy. Respondents reported their public transport trips over the previous two days and classified post-policy trips as existing trips, induced trips or trips switched from another mode. Three zero-inflated negative binomial models are estimated, from which predicted trip frequencies and implied fare elasticities are calculated for the overall sample and key population segments. Relative to the Wave 1 baseline, predicted public transport demand increased by an average of approximately 41 percent across the post-policy waves. The increase was driven primarily by induced demand, while mode switching accounted for a comparatively small share. The implied average fare elasticity was −0.238, indicating a price-inelastic but meaningful response to the substantial fare reduction. Responsiveness was particularly strong among regular public transport users, respondents aged 30 to 44 and those in the lowest-income segment, while older, higher-income and infrequent public transport users responded less strongly. The findings indicate that deep fare reductions can generate substantial mobility and affordability benefits, particularly for groups facing greater financial constraints. However, achieving broader mode switching and attracting car-oriented non-users is likely to require complementary improvements in service coverage, frequency, accessibility, reliability and capacity, together with sustained public funding to offset reduced farebox revenue.