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Post by nickfreckle on Apr 19, 2017 21:04:47 GMT
So giving people a free second ride would not have caused a massive drop in revenue, no? Around what, 70 million journeys no longer being paid for over the course of a year? And there's no evidence that there would be a drop in revenue? I don't need 'evidence' it's common sense that the amount of money taken by fares will dramatically reduce. That's 70 million quid and a halves not coming in.
I'm doing the maths of 70 million quid and a halves, and deducting a bit for people that wouldn't normally have caught a bus. I think my guestimate of £90 million may even be conservative.
It's startingly obvious that there will be a big loss in revenue. Be it in the public domain or not.
Can't wait to see what this debacle really does cost.
And his common 'starter' driver rate is barely any different to what people are getting paid as starter rate now. Another hollow gesture.
I can't stand politicians from all sides of the divide, so don't think this is just anti Khan. Boris was an idiot too, as was Ken. It's a vanity project for all of them to see who can have the better legacy.
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Post by redbus on Apr 19, 2017 22:44:47 GMT
So giving people a free second ride would not have caused a massive drop in revenue, no? Around what, 70 million journeys no longer being paid for over the course of a year? And there's no evidence that there would be a drop in revenue? I don't need 'evidence' it's common sense that the amount of money taken by fares will dramatically reduce. That's 70 million quid and a halves not coming in. I'm doing the maths of 70 million quid and a halves, and deducting a bit for people that wouldn't normally have caught a bus. I think my guestimate of £90 million may even be conservative. It's startingly obvious that there will be a big loss in revenue. Be it in the public domain or not. Can't wait to see what this debacle really does cost. And his common 'starter' driver rate is barely any different to what people are getting paid as starter rate now. Another hollow gesture. I can't stand politicians from all sides of the divide, so don't think this is just anti Khan. Boris was an idiot too, as was Ken. It's a vanity project for all of them to see who can have the better legacy. I understand where you are coming from, but I think your analysis isn't right because :-
- Travel patterns may change as a result of the hopper fare. For instance a stop off maybe made on a journey where it was previously made directly. This would be revenue neutral but be included as a hopper fare. This is what snoggle was pointing out.
- People may make an additional short bus journey where they previously walked. This too would be revenue neutral, but invoke a hopper fare
- Bus routes are being shortened / axed forcing people to change buses where previously they had a direct journey. This is also revenue neutral, but counts as a hopper fare
I also don't know if the hopper fare figures only includes pay as you go, or are all passes eg freedom, travelcard etc included. There would be no loss of revenue for passes, only pay as you go, and even then only if the daily / weekly cap were not being exceeded. I seem to remember from another thread that the average fare income per journey is now 59p not £1.50 as a result of all the discounts, passes, children etc.
The Mayor has budgeted £30 million in revenue loss, which is being paid for by savings elsewhere. Obviously there's a choice how you spend those savings (for instance you could cut / axe fewer buses), but the hopper is supposedly paid for. The actual financial loss I doubt is yet known, we'll have to wait and see I am afraid.
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Post by snoggle on Apr 19, 2017 23:25:30 GMT
So giving people a free second ride would not have caused a massive drop in revenue, no? Around what, 70 million journeys no longer being paid for over the course of a year? And there's no evidence that there would be a drop in revenue? I don't need 'evidence' it's common sense that the amount of money taken by fares will dramatically reduce. That's 70 million quid and a halves not coming in. I'm doing the maths of 70 million quid and a halves, and deducting a bit for people that wouldn't normally have caught a bus. I think my guestimate of £90 million may even be conservative. It's startingly obvious that there will be a big loss in revenue. Be it in the public domain or not. Can't wait to see what this debacle really does cost. And his common 'starter' driver rate is barely any different to what people are getting paid as starter rate now. Another hollow gesture. I can't stand politicians from all sides of the divide, so don't think this is just anti Khan. Boris was an idiot too, as was Ken. It's a vanity project for all of them to see who can have the better legacy. I'm not here "picking a fight" with you. However I do react when people say things when there is official evidence to the contrary. It makes no sense at all for TfL to be lying in official answers or when the Commissioner appears in front of the London Assembly. If TfL don't want to say something then they don't say it or they don't respond to Mayor's Questions. This has NOT happened with the Hopper ticket. You can guarantee that Assembly Members will keep asking questions about this - the three main parties on the Assembly have different reasons for asking. Labour AMs will wish to highlight success, Caroline Pidgeon (Lib Dem) championed the policy and is obviously keen to see that it's working so she can go "told you so, my policy works" and the Tory AMs will be looking for any additional cost so they can slag off the Mayor. I am sure that the moment there is a divergence from the stated £30m cost we will hear about it. I am afraid it is NOT startlingly obvious at all that there will be a *big* revenue loss from the Hopper. Issues are very complex as I have tried to explain. We have debated on here a wide variety of issues that we think are affecting the bus network and its usage. Some of those are our own theories and others are what has been said officially. I have said many times that I'm not convinced that TfL have got a full handle on all of the root causes and influences. Prima facie bus usage *should* be going up - it did under Boris despite fare increases almost every year but he was lucky with the economy and population growth. While the economy has yet to falter in any meaningful way I suspect population growth may have slowed and the impact of high property prices for residential and business purposes are causing some degree of "flight" from the capital. There are a load of other issues like road works, the Night Tube, Uber, congestion, increase in cycling, internet shopping etc etc which are all impacting the usage of buses and travel demand more generally. You simply cannot single out the Hopper fare as the sole cause of the fall in bus network revenue. The one thing you can say is that it is not remotely "obvious" what is actually going on and which are the major factors. At some point TfL will be pressured to give a more nuanced and detailed view - I expect the Transport Committee's report on buses (due fairly soon I'd imagine) will no doubt want a detailed response on a load of issues from TfL. If you don't mind me saying it's not like you to "blow a gasket" on the forum. Has someone or something upset you and triggered this rather vehement set of posts??
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Post by redexpress on Apr 19, 2017 23:41:23 GMT
So giving people a free second ride would not have caused a massive drop in revenue, no? Around what, 70 million journeys no longer being paid for over the course of a year? And there's no evidence that there would be a drop in revenue? I don't need 'evidence' it's common sense that the amount of money taken by fares will dramatically reduce. That's 70 million quid and a halves not coming in. I'm doing the maths of 70 million quid and a halves, and deducting a bit for people that wouldn't normally have caught a bus. I think my guestimate of £90 million may even be conservative. It's startingly obvious that there will be a big loss in revenue. Be it in the public domain or not. Can't wait to see what this debacle really does cost. And his common 'starter' driver rate is barely any different to what people are getting paid as starter rate now. Another hollow gesture. I can't stand politicians from all sides of the divide, so don't think this is just anti Khan. Boris was an idiot too, as was Ken. It's a vanity project for all of them to see who can have the better legacy. I understand where you are coming from, but I think your analysis isn't right because :-
- Travel patterns may change as a result of the hopper fare. For instance a stop off maybe made on a journey where it was previously made directly. This would be revenue neutral but be included as a hopper fare. This is what snoggle was pointing out.
- People may make an additional short bus journey where they previously walked. This too would be revenue neutral, but invoke a hopper fare
- Bus routes are being shortened / axed forcing people to change buses where previously they had a direct journey. This is also revenue neutral, but counts as a hopper fare
I also don't know if the hopper fare figures only includes pay as you go, or are all passes eg freedom, travelcard etc included. There would be no loss of revenue for passes, only pay as you go, and even then only if the daily / weekly cap were not being exceeded. I seem to remember from another thread that the average fare income per journey is now 59p not £1.50 as a result of all the discounts, passes, children etc.
The Mayor has budgeted £30 million in revenue loss, which is being paid for by savings elsewhere. Obviously there's a choice how you spend those savings (for instance you could cut / axe fewer buses), but the hopper is supposedly paid for. The actual financial loss I doubt is yet known, we'll have to wait and see I am afraid.
My interpretation of the figures has always been that they include all PAYG fares - regardless of daily / weekly caps - but not passes, because if a pass is used there is no fare to be charged in the first place. With PAYG it would seem that the system first checks to see if a free hop can be applied, and if the answer is "yes", a £0 fare is applied. Only if the answer is "no" does the system then check against daily / weekly caps to decide what fare to charge. What this means (if I'm right) is that a lot of these "free" hops are irrelevant. My journey history shows dozens of free hops every week, but because I always reach a weekly cap of some sort, TfL aren't losing a penny from any of my "free" hops. That's not to say that the whole thing is revenue neutral, and I'm not in any way standing up for this mayor (or any of the previous mayors!) - I do agree that this is a populist move that hasn't been thought through. But my guess is that the fares freeze is going to do more damage to TfL's finances than the hopper fare.
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Post by snoggle on Apr 20, 2017 8:40:55 GMT
But my guess is that the fares freeze is going to do more damage to TfL's finances than the hopper fare. ... is the right answer. The overall fares freeze is the thing that is wrecking TfL's finances and imposing downward pressure on budgets and contracts. If we think it is bad now wait for a couple of years when TfL are also supposed to be delivering 11% growth in bus usage according to the Business Plan. If that doesn't happen then the consequences will be appalling. That's when TfL will have to adopt a different position on the volume of service they run and at what cost. It won't be pretty.
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Post by sid on Apr 20, 2017 13:34:34 GMT
I understand where you are coming from, but I think your analysis isn't right because :-
- Travel patterns may change as a result of the hopper fare. For instance a stop off maybe made on a journey where it was previously made directly. This would be revenue neutral but be included as a hopper fare. This is what snoggle was pointing out.
- People may make an additional short bus journey where they previously walked. This too would be revenue neutral, but invoke a hopper fare
- Bus routes are being shortened / axed forcing people to change buses where previously they had a direct journey. This is also revenue neutral, but counts as a hopper fare
I also don't know if the hopper fare figures only includes pay as you go, or are all passes eg freedom, travelcard etc included. There would be no loss of revenue for passes, only pay as you go, and even then only if the daily / weekly cap were not being exceeded. I seem to remember from another thread that the average fare income per journey is now 59p not £1.50 as a result of all the discounts, passes, children etc.
The Mayor has budgeted £30 million in revenue loss, which is being paid for by savings elsewhere. Obviously there's a choice how you spend those savings (for instance you could cut / axe fewer buses), but the hopper is supposedly paid for. The actual financial loss I doubt is yet known, we'll have to wait and see I am afraid.
My interpretation of the figures has always been that they include all PAYG fares - regardless of daily / weekly caps - but not passes, because if a pass is used there is no fare to be charged in the first place. With PAYG it would seem that the system first checks to see if a free hop can be applied, and if the answer is "yes", a £0 fare is applied. Only if the answer is "no" does the system then check against daily / weekly caps to decide what fare to charge. What this means (if I'm right) is that a lot of these "free" hops are irrelevant. My journey history shows dozens of free hops every week, but because I always reach a weekly cap of some sort, TfL aren't losing a penny from any of my "free" hops. That's not to say that the whole thing is revenue neutral, and I'm not in any way standing up for this mayor (or any of the previous mayors!) - I do agree that this is a populist move that hasn't been thought through. But my guess is that the fares freeze is going to do more damage to TfL's finances than the hopper fare.Surely a fare increase will only exacerbate the decline in bus usage? TfL have some very real on street competition now in the shape of uber!
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Post by redbus on Apr 21, 2017 21:37:32 GMT
Potentially so, but then so will cutting back routes and reducing frequencies. There are no easy options, and I agree that the likes of Uber and ride sharing offers very real competition to buses.
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Post by mondraker275 on Apr 22, 2017 8:48:00 GMT
My interpretation of the figures has always been that they include all PAYG fares - regardless of daily / weekly caps - but not passes, because if a pass is used there is no fare to be charged in the first place. With PAYG it would seem that the system first checks to see if a free hop can be applied, and if the answer is "yes", a £0 fare is applied. Only if the answer is "no" does the system then check against daily / weekly caps to decide what fare to charge. What this means (if I'm right) is that a lot of these "free" hops are irrelevant. My journey history shows dozens of free hops every week, but because I always reach a weekly cap of some sort, TfL aren't losing a penny from any of my "free" hops. That's not to say that the whole thing is revenue neutral, and I'm not in any way standing up for this mayor (or any of the previous mayors!) - I do agree that this is a populist move that hasn't been thought through. But my guess is that the fares freeze is going to do more damage to TfL's finances than the hopper fare.Surely a fare increase will only exacerbate the decline in bus usage? TfL have some very real on street competition now in the shape of uber! Well not necessarily. Its got to do with elasticities of demand. If the demand is inelastic (does not change much when you change prices) then when you can increase prices, the fall in demand will be small enough that the increased income from those that pay the increased amount will be greater than the loss. What probably should of happened from an economic point of view is that fares should not have been frozen with the hopper fare introduced. The demand for tube currently and in the short term is far more inelastic than the bus. Therefore introducing the hopper fare with the fare increase would have slightly off set that. However, having said that Khan pledged that he will introduce the hopper and have a fare freeze, so he is doing what he said he will do, which may or may not work, but at least he is doing what he said which I respect. Just waiting for another guy to build a wall and a lady to not have an election until 2020...oh wait.
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Post by snowman on Apr 22, 2017 9:07:18 GMT
Surely a fare increase will only exacerbate the decline in bus usage? TfL have some very real on street competition now in the shape of uber! Well not necessarily. Its got to do with elasticities of demand. If the demand is inelastic (does not change much when you change prices) then when you can increase prices, the fall in demand will be small enough that the increased income from those that pay the increased amount will be greater than the loss. What probably should of happened from an economic point of view is that fares should not have been frozen with the hopper fare introduced. The demand for tube currently and in the short term is far more inelastic than the bus. Therefore introducing the hopper fare with the fare increase would have slightly off set that. However, having said that Khan pledged that he will introduce the hopper and have a fare freeze, so he is doing what he said he will do, which may or may not work, but at least he is doing what he said which I respect. Just waiting for another guy to build a wall and a lady to not have an election until 2020...oh wait. Clearly peak hour demand to get to work is inelastic (but exact mode tends to be flexible), many commuters pick a reliable route over one that could be marginally quicker but involves messy changes. I suspect off peak, evening and weekend journeys are much more optional. Clearly will be some loss of revenue from hopper ticket but the big damage to the bus network is going to be travel card and oyster. Bus use is declining, other modes go up so share of travelcard revenue needs to be cut. The bus network is losing £12M per week and these revenue changes will push this to £14M per week. That will be about 3 times bus subsidy for remainder of England. Once some regional politicians start being heard going to be very difficult to justify.
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Post by snoggle on Apr 22, 2017 11:04:28 GMT
Clearly will be some loss of revenue from hopper ticket but the big damage to the bus network is going to be travel card and oyster. Bus use is declining, other modes go up so share of travelcard revenue needs to be cut. The bus network is losing £12M per week and these revenue changes will push this to £14M per week. That will be about 3 times bus subsidy for remainder of England. Once some regional politicians start being heard going to be very difficult to justify. Agree that the pooled revenue share will get much worse which won't help the overall financial situation. I suspect TfL have already provisioned for this provided TfL's overall share is maintained / the pool total is increasing. Surpluses within TfL modes all get shoved all over the place anyway so if the tube and Overground are doing better their surpluses can be used to cover bus network losses at TfL level. Obviously each mode and then TfL subsidiary have their own accounts. I don't agree with your latter point. Yes the subsidy is high *but* the bus network still sustains a huge level of economic activity and social mobility. TfL loses revenue grant imminently so there is no government subsidy to argue about. Non London politicians could moan about the Freedom Pass coverage but that's not a government or Mayoral issue. That's for the Boroughs and the power of the older persons vote which makes it nigh on impossible for anyone to get elected on a platform that would see the Freedom Pass diminished. TfL's bus network funding also covers vehicle replacement and refurbishment which is not typical elsewhere. I FOI'd the numbers from TfL and it ranges from £300m to £480m in the next few years. Therefore the "loss" on the network is actually very small if you strip out vehicle costs and then consider the Freedom Pass revenue contribution. Once you get into the wider debate on the role of the network and the scale of London's economy then even with a fall in patronage we are still talking about a convincing argument for supporting the bus network.
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Post by redbus on Apr 22, 2017 17:37:23 GMT
Clearly will be some loss of revenue from hopper ticket but the big damage to the bus network is going to be travel card and oyster. Bus use is declining, other modes go up so share of travelcard revenue needs to be cut. The bus network is losing £12M per week and these revenue changes will push this to £14M per week. That will be about 3 times bus subsidy for remainder of England. Once some regional politicians start being heard going to be very difficult to justify. Agree that the pooled revenue share will get much worse which won't help the overall financial situation. I suspect TfL have already provisioned for this provided TfL's overall share is maintained / the pool total is increasing. Surpluses within TfL modes all get shoved all over the place anyway so if the tube and Overground are doing better their surpluses can be used to cover bus network losses at TfL level. Obviously each mode and then TfL subsidiary have their own accounts. I don't agree with your latter point. Yes the subsidy is high *but* the bus network still sustains a huge level of economic activity and social mobility. TfL loses revenue grant imminently so there is no government subsidy to argue about. Non London politicians could moan about the Freedom Pass coverage but that's not a government or Mayoral issue. That's for the Boroughs and the power of the older persons vote which makes it nigh on impossible for anyone to get elected on a platform that would see the Freedom Pass diminished. TfL's bus network funding also covers vehicle replacement and refurbishment which is not typical elsewhere. I FOI'd the numbers from TfL and it ranges from £300m to £480m in the next few years. Therefore the "loss" on the network is actually very small if you strip out vehicle costs and then consider the Freedom Pass revenue contribution. Once you get into the wider debate on the role of the network and the scale of London's economy then even with a fall in patronage we are still talking about a convincing argument for supporting the bus network. Another way of looking at this is where would London be without it's buses. Truth is they make a huge positive economic impact which isn't really costed anywhere. If you were to cost the benefits brought to London by it's bus service and offset against the loss made, I think you'd find the buses would suddenly make a very large profit, only those profits can't actually be monetised for TfL.
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Post by snoggle on Apr 24, 2017 10:27:55 GMT
Another way of looking at this is where would London be without it's buses. Truth is they make a huge positive economic impact which isn't really costed anywhere. If you were to cost the benefits brought to London by it's bus service and offset against the loss made, I think you'd find the buses would suddenly make a very large profit, only those profits can't actually be monetised for TfL. More succinctly put than I managed. TfL do, of course, make an attempt to evaluate non financial benefits although I don't think "supporting the London economy" is in the evaluation mix. Thinks like time savings, reduced congestion will be. Not sure where air quality / lower emissions is handled but I expect it must now be somewhere in the process even if it is only a qualitative, rather than quantitative, factor.
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Post by sid on Apr 24, 2017 13:33:37 GMT
Surely a fare increase will only exacerbate the decline in bus usage? TfL have some very real on street competition now in the shape of uber! Well not necessarily. Its got to do with elasticities of demand. If the demand is inelastic (does not change much when you change prices) then when you can increase prices, the fall in demand will be small enough that the increased income from those that pay the increased amount will be greater than the loss. What probably should of happened from an economic point of view is that fares should not have been frozen with the hopper fare introduced. The demand for tube currently and in the short term is far more inelastic than the bus. Therefore introducing the hopper fare with the fare increase would have slightly off set that. However, having said that Khan pledged that he will introduce the hopper and have a fare freeze, so he is doing what he said he will do, which may or may not work, but at least he is doing what he said which I respect. Just waiting for another guy to build a wall and a lady to not have an election until 2020...oh wait. I don't think demand is inelastic, a lot of people commute by bus because it is so much cheaper than the train.
If Mr Khan pledged in his manifesto that he would bring in the hopper ticket and freeze fares then he cannot really be criticized for doing just that.
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Post by mondraker275 on Apr 24, 2017 16:38:40 GMT
Well not necessarily. Its got to do with elasticities of demand. If the demand is inelastic (does not change much when you change prices) then when you can increase prices, the fall in demand will be small enough that the increased income from those that pay the increased amount will be greater than the loss. What probably should of happened from an economic point of view is that fares should not have been frozen with the hopper fare introduced. The demand for tube currently and in the short term is far more inelastic than the bus. Therefore introducing the hopper fare with the fare increase would have slightly off set that. However, having said that Khan pledged that he will introduce the hopper and have a fare freeze, so he is doing what he said he will do, which may or may not work, but at least he is doing what he said which I respect. Just waiting for another guy to build a wall and a lady to not have an election until 2020...oh wait. I don't think demand is inelastic, a lot of people commute by bus because it is so much cheaper than the train.
If Mr Khan pledged in his manifesto that he would bring in the hopper ticket and freeze fares then he cannot really be criticized for doing just that.
You are probably right that many people do travel by bus because its cheaper than tube. However, if the bus fare increased like it has most of the past decade, what are most passengers going to do? Probably pay the increase because there is no alternative 'cheaper' public transport and depending on a typical bus journey it is unlikely that people would transfer into private i.e walk/cycle. Therefore, the demand would be inelastic. However, I would say the longer bus journeys now would make demand more 'elastic', but still inelastic. I respect Khan for following through with his pledge. Does not mean I agree with them, after all I did not vote for him.
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Post by vjaska on Apr 24, 2017 18:57:04 GMT
I don't think demand is inelastic, a lot of people commute by bus because it is so much cheaper than the train.
If Mr Khan pledged in his manifesto that he would bring in the hopper ticket and freeze fares then he cannot really be criticized for doing just that.
You are probably right that many people do travel by bus because its cheaper than tube. However, if the bus fare increased like it has most of the past decade, what are most passengers going to do? Probably pay the increase because there is no alternative 'cheaper' public transport and depending on a typical bus journey it is unlikely that people would transfer into private i.e walk/cycle. Therefore, the demand would be inelastic. However, I would say the longer bus journeys now would make demand more 'elastic', but still inelastic. I respect Khan for following through with his pledge. Does not mean I agree with them, after all I did not vote for him. Neither did I because the fare freeze was always going to backfire one way or the other. It's way I didn't vote in Livingstone the second time either.
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