The Free Tram Zone (FTZ) just turned five. It was introduced in January 2015.

If you’re wondering why there was so much discussion on it last week, it’s because submissions to a Parliamentary Inquiry on the topic just closed.

Transport Matters Party MP Rod Barton, who moved for the Inquiry, posted an article addressing some concerns with the FTZ. You can see his motivation in all this is coming from the right place:

We need to break the cycle of dependence on cars to get around this city and we need to solve the operational issues that are holding our public transport network back.

The problem is he seems to have assumed that fares are the biggest barrier to getting people out of their cars:

We needed to … do more to encourage people onto public transport. … If price will get them there, then we should drop the prices. Our city needs this and our environment needs it.

I don’t think that’s right.

The biggest barrier is lack of good services – public transport that actually presents a viable, time-competitive alternative to driving.

It’s not such a big issue in the CBD and inner suburbs, where the trams (including in the Free Tram Zone) complement the trains and buses, and provide a pretty dense, pretty frequent, connecting network, at least during daytime. In these areas, public transport competes strongly. Only a minority of people come into the CBD by car, for instance.

It’s the middle and outer suburbs where the only option might be buses every 30-60 minutes, and if you’re lucky there are trains, but only every 30 minutes after dark. Most people won’t use these at any cost if they have a car.

Still, given the Free Tram Zone has been around for five years now, the effects of its introduction should be visible…

And the current debate got a few myths flying.

Did the FTZ get more people onto trams?

Yes it did. Budget Papers show patronage rose sharply, from 176.4 million in 2013-14 to 204 million in 2015-16, an increase of 16% in just two years — the highest growth in at least 20 years.

In fact in the data going back to 1947, the only higher jump I could find was following the patronage dip from the 1990 tram strike that knocked the trams out of action for over a month.

But…

Did the FTZ discourage driving?

No it didn’t, and this is the real problem.

In January 2015 there were two major fare changes:

  • Zone 1+2 fares were capped at zone 1 prices;
  • and the FTZ was introduced.

Analysis of VISTA data (which surveys tens of thousands of people and their travel) shows that the first change, capping Zone 1+2 fares, resulted in a reduction in car travel. Some people who previously drove to Zone 1 stations now board trains closer to home. Despite it also introducing some issues to the fares, the effect on reducing driving has undoubtedly been a good thing.

But the VISTA data also showed that within Zone 1 (where there was no price change apart from the FTZ) more people are now driving to the area included in the FTZ. Conclusion: The FTZ has encouraged more driving.

This is in line with car parks promoting their location within the FTZ.

The other thing the data showed was similar to the anecdotal evidence: many people hopping onto trams had previously made their short CBD journeys by walking or cycling (including using the blue hire bikes, partly killed off thanks to the FTZ). This is not a positive change.

Doesn’t everybody benefit from the FTZ?

No they don’t. The people who benefit are those who did not reach the zone by public transport.

If you do catch public transport to the CBD/FTZ, you get trams included in your daily fare (unless you used the Early Bird train fare).

This means that for most paying public transport users the FTZ makes no monetary difference.

Some of the confusion around this might be because in some other cities in Australia, there is no daily fare cap, or it is very high, so you would pay extra for a lunchtime tram trip to the shops. Not so in Melbourne.

Wouldn’t scrapping the FTZ would hurt the poor?

Mostly not.

The main beneficiaries are people drive into the FTZ – who as the Grattan Institute says, are more than twice as likely to earn a six-figure salary as other workers.

Some international and interstate tourists also benefit by not having to buy a Myki card, but only if the entirety of their travel is within the CBD and Docklands. It seems unlikely that those people are unable to afford the cost of public transport fares – though better sales and distribution of Myki cards, for instance through hotels, would be a good idea.

There are some students on low incomes who live in or close to the FTZ. Most of them can already get substantial discounts on fares. But I’ll wager most people living in the FTZ are not hard up for cash.

Melbourne’s “battlers” are more likely to be found in outer suburbs with no efficient frequent usable public transport, struggling to afford the running costs of the cars they need to get where they need to go – or struggling to reach education and work opportunities.

Those people should be the priority for assistance.

Crowding? Can’t they just run more trams?

Crowding has long been an issue on CBD trams, but has got markedly worse with the FTZ.

It’s particularly an issue in evening peak hour, when paying passengers who want to head outbound are squeezed off the trams by free passengers riding a short distance. The above video shows route 19 outbound at 5:45pm.

Rod Barton noted:

Indeed, overcrowding exists across the entire public transport network. However, this is not by any means an insurmountable problem. This is an operational issue that could be solved by adding increased services or shorter shuttle routes that take passengers to the perimeter of the zone.

Running more trams is the logical answer in principle, but problem is that right now, there are no more trams to run.

Could they buy more? Yes. But in the context of them struggling to even provide upgrades to ensure a fully accessible, or indeed fully air-conditioned fleet, where does this money come from?

Nobody expects transport systems (road or rail) to completely pay for all their costs, but at least if patronage is growing on fare paid routes, then revenue is increasing to cover some of this investment.

Funding for expensive upgrades to free services with no financial return is a hard ask when there are so many other demands on public money.

Free Tram Zone

Should the entire PT system be free?

Public transport network revenue for 2018-19 was $982 million (PTV Annual Report 2019).

Even accounting for the huge cost of running the Myki system (about $100m/year — all those upgrades like new faster readers don’t come for free) that’s still a lot of foregone revenue that would have to be covered if there were no fares.

The beneficiaries would be wider than the FTZ of course — but mostly it would be those people who have a service that is good enough to use.

Those in the outer burbs with their hopeless buses would not start using public transport just because it was free. They’d still drive.

Public phone free calls

To draw an analogy: Free outer-suburban public transport is like free payphone calls. Few people make use of it, because frankly the experience of payphones is just nowhere near as convenient as mobile phones, which most people own already – even though they are not free.

Ultimately even if government had that money to spend, upgrading services would do far more to get people out of their cars and using public transport.

As Chris Hale notes: In wealthy cities like Melbourne, potential public transport passengers are indifferent to fare changes or discounts, but respond robustly to enhanced service.

Free Tram Zone: Casino is out, Batman Park is in

Isn’t the FTZ boundary illogical?

Yes it is. It comes within one stop of the Exhibition and Convention Centre, the Casino, the National Gallery of Victoria, and the Exhibition Buildings and Museum.

Remember the history: the Coalition proposed it in early 2014 before the state election, and Labor immediately matched it. It appeared to come straight from the politicians, bypassing the bureaucracy and the transport operators.

It’s almost as if the politicians who designed it back in 2014 just drew a line around the Hoddle Grid, plus Docklands and the Vic Market, and didn’t consider the tourist hotspots… or indeed where the boundary tram stops were located.

Other points

Did the FTZ speed up trams? Few people now need to touch their tickets. But timetable and performance data shows no overall speed benefit, and the tram operator has raised concerns about delays, with CBD trams now averaging just 11 kilometres per hour. Crowding appears to have more than countered any boarding/alighting time saving for individuals.

Was the FTZ to cover for the City Saver Zone, not catered for under Myki? The City Saver Zone was catered for under Myki. It worked on trains and buses provided the user touched on and off.

Unofficially it worked on trams too, but was removed in mid-2010 when touch-off was made optional on trams. This was thanks largely to slow Myki Reader response times, though dodgy GPS may have also been a factor.

Have fare cuts like the FTZ and the nearly flat fares added to upwards pressure on fares generally? Yes. Around the same time the Coalition introduced those changes, they also flagged CPI+2.5% rises from 2015 to 2018, which were subsequently implemented by Labor. A short trip in Melbourne’s Zone 1 now costs about double that of Sydney.

The Free Tram Zone debate

What happens with the FTZ now?

We’ll see. The Inquiry will go ahead obviously, but the government has already said they don’t want to expand the zone – in fact their response to the Herald Sun sounds awfully like “we know it causes all sorts of problems, but expanding it will make it even worse”:

The state government has rejected a call to extend free CBD tram services, saying it would increase crowding and make trams run slower across the network.

Equally I doubt they’ll get rid of it. In 2018, both major parties, as well as the Greens, said they had no plans to change it or remove it.

If the robust debate seen last week proves nothing else, it’s that it’s a politically vexed issue, and it’s probably easier just to ignore the problem.

I’d love to think the government would be brave enough to get rid of the Free Tram Zone – to claw back some revenue, relieve crowding and stop encouraging CBD motorists – but unfortunately for paying passengers, we’re probably stuck with it.

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25 thoughts on “What future for the FTZ?

  1. Why not just make public transport free? Then you can scrap the entire ‘smart’ collection system, which doesn’t seem to be working that well in any of the states.

  2. Living in Perth, I have experience of my own FTZ: the Free Transit Zone. What you say is generally true. The free services are heavily subsidised by council parking levies, resulting in high parking rates. While that discourages parking in the CBD, it doesn’t stop people driving into the CBD. Some privately operated carparks bypass this levy and offer the cheapest parking rates around (look at Watertown Perth compared to CPP Citiplace parking). The free central services create a loss to the government and financially, a loss to the taxpayer (long term, that is). The ‘free’ however, means good for whoever travels on those services, and they are the only people really ever thought about in this kind of planning. The ‘free’ also attracts more people, creating more drivers into the CBD who don’t realise that they’re still paying for the service and those who don’t realise that even people that don’t use the service will be paying for it. Long story short, driving IN the city is discouraged, but driving TO the city isn’t.
    The free services and the loss to government and taxpayers also creates a loss in funding for better transport. More frequent routes down city spines, in outer areas and new routes to serve new areas are then neglected and dumped because the government has to find a way to cover the operation of the FTZ. If the FTZ (any free transport area) was to be dumped, passenger patronage is likely to decrease and traffic IN the city to increase. Traffic TO the city may well remain the same. However, if this was offset with slightly lower fares (the government no longer needs to find a way to cover FTZ cost and so can afford a slight decrease) and new, more frequent buses and trains (etc), patronage in the central, inner-city ring areas may decrease (people might find it cheaper/more convenient to drive) but the outer suburban areas would receive better services and would cause a larger patronage increase. In the end, the goal would probably be to ‘densify’ areas to help slow down urban sprawl, meaning that the government won’t need to operate more new services to new outer areas because the population will be more centralised.
    So in the end, there are two ways to deal with this: in short term, the FTZ needs to go. New funding and no longer having to cover operating costs of the FTZ means better outer PT. A much longer term solution would be to stop new subdivisions in outer areas and encourage densification of inner areas to popularize the FTZ further, stop urban sprawl and stop needing new routes for outer ares. But of course, option 2 would probably take longer than option 1.

  3. any change to the FTZ would unfortunately destroy the green submarine outline, of which I’m particularly fond … :)

  4. Your last sentence is unfortunate to read. Getting rid of the FTZ could be implemented by an incoming government in their first year of government, as long as it was not proposed before the election. Four years later at the next election, some will talk about the history of the FTZ, but most will have forgotten. A smart transport minister could get sound reasons out there for the abolishment of the FTZ in tv and social media sound bites. It will come down to who votes in which marginal electorates who are most advantaged by the FTZ.

  5. “Should the entire PT system should be free?”
    I think you repeated the word “should” in this section header :)

  6. I think that almost none of the MPs have ever actually used a suburban bus themselves, much less even looked at a bus timetable.

    If they did that, I think they would be much more likely to want to fix Melbourne’s buses almost immediately.

  7. Is there consideration of whether the FTZ is economically stimulating, through, say, tourism?

    “The other thing the data showed was similar to the anecdotal evidence: many people hopping onto trams had previously made their short CBD journeys by walking or cycling (including using the blue hire bikes, partly killed off thanks to the FTZ). This is not a positive change.”
    I assume you don’t mean the blue hire bikes, but the rest of the sentence. Why not? Maximising mobility between and choice of modes seems like a good thing to me. One can stereotype it as laziness, but there are considerations like disability, weather, air quality, and so on.

    “Makes crowding worse
    Delays trams
    Annoys paying passengers”
    I don’t think these are valid criticisms. Doesn’t anything that improves ridership do this? Not to be facetious, but wouldn’t making trams extremely undesirable to ride, for example, very smelly, solve these problems?

    “But the VISTA data also showed that within Zone 1 (where there was no price change apart from the FTZ) more people are now driving to the area included in the FTZ. Conclusion: The FTZ has encouraged more driving.”
    I think this is a bit misleading. Doesn’t anything that makes the FTZ more desirable to visit, even entirely unrelated to transport, cause more people to drive there? Are there any figures on whether more people are now going to the area included in the FTZ by public transport?

    “There are some students on low incomes who live in or close to the FTZ. Most of them can already get substantial discounts on fares. But I’ll wager most people living in the FTZ are not hard up for cash.”
    I’ll be frank, this seems like straight up stereotyping? Can one not point to homeless people and illegally underpaid service workers and the actually really very large number of students who may or may not be eligible for discounts under this system?

    And then finally, “Diverts resources from inadequate suburban public transport”
    Does it really though? Perhaps you are better versed in the political realities than me, but it seems like nothing short of something as implausible as a Greens majority government could see investment into regular suburban buses with good coverage. Is it likely that savings would go to public transport, or is it likely that savings would just mean there was less total investment in public transport, lessening the entire system’s viability?

    I see the points that you make, and they seem considered and pragmatic with regards to finance and service. I don’t think the objections I’ve made touch the core of your argument (bar number five, where the data could vindicate you; I don’t know), which is that the FTZ benefits the wealthy more than it does the poor (though I question where the money would go apart from your assumption it could be used on underfunded public transport). But in an ideal world, it would be nice, I agree, if instead of money being spent on the FTZ, it was spent on public transport that is more needy.

    But–and perhaps this is outside of the scope of your analysis, and perhaps it is rightfully so for being too vague be too harsh on me for indulging myself given that disclaimer–isn’t there an argument to be made for society?

    Don’t we imagine a world where we can all get around freely without worrying about what it will cost us? Don’t we want someplace where we don’t have to deal with tickets and cards and inspectors? Don’t we have a beautiful vision of places that are built for humans to live and die in being places that humans can move about freely and equally throughout their lives? Isn’t this what we culturally conceive of in our understanding of the modern city, especially the CBD, with its unfettered opportunity and vast variety, isn’t this why there was that online petition to play the Imperial March outside the Free Tram Zone and funky slap bass inside it? Don’t we want to be, at least in the sense of movement, free?

    Mightn’t the Free Tram Zone, even for its crowding and geographical limitation, even for the fact that its freeness is mostly misconceived as broader than it is, even for its practically inequitable and politically inconvenient placement, give us a window into a future more liberated from cares? Doesn’t it give us hope, to visit a place we all recognise where there is no price on movement, that better things are possible? Isn’t the Free Tram Zone just a little piece of utopia?

  8. Great thoughtful article, Daniel. Thanks.
    Lunchtime trams are an absolute crush. It would be a very brave government that scrapped the FTZ – once the public get something for free you then can’t start charging them for it.

  9. I generally agree, the FTZ causes issues and its boundaries are illogical. Why, for example, is Docklands included but not East Melbourne or South Melbourne, which are just as close to the CBD? And it’s weird that the zone ends at Swanston/La Trobe, when one block away on Elizabeth St you can ride all the way up to Victoria Street. Why does the Queen Vic Market get this preferential treatment over other tourist attractions? It’s all very odd.

    The lack of a short trip fare is the real problem here. Why should anyone anywhere in Melbourne pay $4.50 to go a few stops? I don’t see how the FTZ could be removed without reintroducing a short trip fare. Has the GPS tech improved enough that this could work on trams now?

    Another thought – the system needs disposable 1-day and 3-day public transport cards for tourist use. These are common overseas and very useful; a tourist shouldn’t have to work out local fares and how much credit they need for their stay. Such cards would remove some of the stated need for the FTZ.

  10. If the free tram zone did not discourage cars, but did get more people onto the trams, why remove it? Will that discourage cars? So removing the free tram zone would do what exactly? Raise more money???

    How would it claw back revenue? The only way would be if people drove to the city, and then paid for the tram. Otherwise, everyone who has come to the city with a train / tram ticket (i.e. all day) have already paid for the day and even if they touched on in the FTZ then it would remain revenue neutral.

  11. Just charge based on distance, problem solved, but wait, they couldn’t even figure the old myki out.. i doubt they have the expertise to implement a distance based charging solution.

  12. Call me cynical if you will, but in my experience, payment of a fare on trams outside the FTZ and on buses is regarded as “optional”. by many. There’s certainly a lack of visible enforcement. In that sense, we’re part way towards a no-fares PT system!!

  13. Daniel, it looks like the authorities have changed the path of the airport railway yet again!

    Are you able to do a timeline on the flip flops?

    First it was going to start at Spencer Street Station, then it was going to bypass SSS, then it was going to stop at SSS, and on 8 Feb 2020, they decided to bypass SSS again!

    If they can build skyrail in the eastern suburbs and get re-elected, they can surely build an elevated railway from SSS to Sunshine? I hate expensive tunnels and perhaps the opposition to elevated rail has died with the baby boomers?

  14. One group that would be seriously disadvantaged by abolishing the FTZ is the thousands of people who cycle into the city every day (including me). They didn’t buy a ticket already, so if they know they are going to have to buy a ticket to travel around the city for shopping, lunchtime appointments, business or whatever, they will likely leave the bike at home and get the train or tram to work instead. What will that do to already crowded public transport?

  15. @Daniel

    You have referenced the budget sheets for data on patronage for trams overall, as a proxy to calculate impact of the free tram zone on usage. The challenge here is that this data is accumulated from people tapping their Myki’s… which you don’t do in the free tram zone.

    I actually can’t think of any accurate mechanism in place today that is actually recording exactly how many people get on and get off within the zone. Sampling and surveys could help, but they’re not being conducted.

    The other large point in your article is that people are driving their cars into the city to leverage the FTZ…

    “But the VISTA data also showed that within Zone 1 (where there was no price change apart from the FTZ) more people are now driving to the area included in the FTZ. Conclusion: The FTZ has encouraged more driving.”

    I couldn’t go to the same level of detail as you, but analysing what I could of their dashboards, it appears that driving is overall decreasing. Though I would also highlight that there’s significant roadworks underway, and disruptions to major rail lines. I personally catch a bus into the city for work, but if my train-line wasn’t available, I would be looking to drive before grappling with the havoc of train-replacement buses in peak hour on the daily. Either way this is a bit of an obtuse method to understand people’s usage of public transport after the introduction of the FTZ. There’s too many assumptions and qualitative feedback being weighted without something quantitative we can’t just easily poke holes through.

    Without accurate data on usage, I think synthesising hypothesis or opinions on what comes next is flawed; and will only lead to more mistakes.

    My opinion: As a regular user of the free-tram-zone, I like it. I would be opposed to seeing it scrapped or ended. That would be a disappointing outcome and a mistake.

  16. Using MyKi readers in a crowded tram is a nightmare. You have to do this when alighting after coming in from the burbs. It just slows you down when alighting.
    Making PT free is the best option. Do away with ticketing and charge a small state levy on rates notices (where people live) scaled based on quality of the PT network in their postcode. Those post codes with close access to train, bus and tram pay more than those with scant, or infrequent distant services access.

  17. This article is another example of public transport evangelists missing the forest for the trees, and trying to make things worse.

    The question we should be asking is – does it make people’s lives better? The answer is yes. Now, as to the question of whether it discourages driving, this is an almost irrelevant consideration. The amount of parking in CBD Melbourne is rapidly decreasing as sites are developed, and the amount available is much less than 15 years ago, while the population of the city has increased by half. This is a walking city, and trams are an excellent supplement to walking by increasing the effective distance available.

    If I was to change anything about the free tram zone, it would be to remove the nasty and vindictive removal of the RMIT, MCEC, and NGV stops from the zone. The first causes huge amounts of congestion around the Melbourne Central stop, the second makes the NGV and arts precinct much less accessible, and each means thousands of people are unnecessarily fined each year.

    If you and your friends ever get the ear of a minister (highly unlikely), I’ll be out on the streets fighting against that change.

    Instead, you should be putting your energies towards the ongoing use of trams that fail to comply with Australian disability law. These really are a major strike against mobility and equality of access.

  18. @Wallfly, you do not need to touch-off your Myki when alighting a tram.

    The only exception is for zone 2-only trips, where it’s highly unlikely that the tram is crowded.

    @George, “does it make people’s lives better? The answer is yes.” – I think the question is more nuanced than that.

    Whose lives are made better? For the most part, motorists. If that’s true, is it still a good outcome, and a priority for taxpayer funds?

    Equally it’s more nuanced than “did it get more people onto trams?” If this was at the expense of walking and cycling, then again, is it still a good outcome? I would argue not.

    For everyone who wants more reading, a lot more submissions are on the Parliament web site now: https://parliament.vic.gov.au/eic-lc/article/4270

    Two that are particularly worth noting are:

    RTBU (in favour of expanding the zone)

    Yarra Trams (against expanding the zone)

    The YT one points out some issues with expansion, such as moving the Elizabeth St boundary north to the hospital precinct, or the St Kilda Road boundary south to Domain means that some routes from the CBD to those destinations would be free, but others (eg 57, 58) would not.

  19. @Royyan, Infrastructure Victoria doesn’t make the decision. It just makes recommendations.

    The state government ultimately makes the decision.

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