A Dunedin bus operator says fares may have to rise 25% to keep up with inflation, while another says he is embarrassed by some of the buses he puts on the road.
At the Otago Regional Council hearings committee for a proposed change to the Regional Passenger Transport Plan in Dunedin yesterday, both Citibus and Dunedin Passenger Transport bosses said the Dunedin bus system badly needed investment, and lowering fares did not attract more passengers.
The committee was Cr Michael Deaker (chairman) and Crs Bryan Scott, Sam Neill, Duncan Butcher and David Shepherd.
The proposed change to the plan was to provide for the new GoCard integrated ticketing system, and align the process of reviewing bus fares with setting transport rates each year.
Citibus general manager Tony Collins told the hearing only 5% of passengers were concerned with the fare price, while the other 95% were more worried about reliability, convenience, professionalism of drivers and quality of buses.
The company needed to spend $11 million over the next three years in capital investment, but he would find it hard to justify to the Citibus board when there was not an adequate return.
In the past six months, revenue on a commercial three zone route had increased by 10.2%, while in the same period, council-contracted route revenue dropped 2%.
The level at which a fare became prohibitive needed to be studied. ‘‘Lower fares don't necessarily mean more passengers. If you put the price of food down, it doesn't mean people are going to eat more,'' he said.
In his submission, Mr Collins said patronage growth came from attracting people who could make a choice over transport.
Focusing on a low-fare policy only encouraged, in a competitive tendering environment, the minimisation of investment in staff wage levels, plant, maintenance and replacement, in order to win contracts.
The company had 25-year-old buses on main routes, which Mr Collins said he was embarrassed about. Fares should differ on different routes, and at different times, he said.
The GoCard system had huge potential, he said.
Dunedin Passenger Transport director Kayne Baas said fares had not been increased since 2004 on council-contracted routes.
Fares should rise by 25% to keep up with inflation, he said. Fuel and labour costs had increased.
Both men favoured removing a cap on maximum fares and Mr Baas said competition would still deliver the cheapest fares possible.
‘‘It's hard for people to understand a 25% increase and get nothing out of it. We want to put better buses on,'' Mr Baas said.
The system in operation since 2004 had been unfair to operators and parking was too readily available in the city, he told the committee.
