Schmöcker, J. D. Urban public transport fare design dimensions Post Covid and in a Sharing Society with a focus on Japan.

Published in New Developments in Regional Public Transport Policy, 2022

Determining fares is a complex issue involving a range of stakeholders, including operators, travellers and often government. A core problem with any fare changes is that there is uncertainty as to how a population will react to a fare change. People might choose different modes if the price becomes unattractive or adapt their travel behaviour and travel to different destinations, at different times or at different routes. This make it difficult to find the “optimal” fare. What defines optimality is furthermore a question in itself. If operators can freely decide the fare, revenue optimisation is likely the primary objective. However, even for this simple objective, different answers might be given. For example, different assessment of future risks and different planning horizons can lead to different optimal fares. Revenue maximisation over a short time horizon might not be optimal in the long run. People often require time to adapt so that, for example, a short-term fare increase, might create a revenue surplus but in the longer run could lead to a loss. If public interests are involved defining optimality is even more difficult. Additional objectives such as spatial and temporal coverage of a wide range of travel needs of the population might need to be considered and lead to (multi-objective) social welfare maximisation problems.