"Plateauing" bus patronage in Dunedin means the Otago Regional Council needs to look seriously at raising the subsidy for passengers with GoCards, Cr Michael Deaker says.
Contracted bus services carried 1.5 million passengers in 2009-10, down 9% on the previous year, a report presented to the policy and resource planning meeting this week said.
Cr Deaker said patronage had dropped since the "heady days" of the GoBus and GoCard (integrated ticket) release in late 2007 and a GoCard subsidy increase from 10% to 15% could be needed.
"I'd love for the next council to talk about incentives."
The council subsidised bus trips by $2.59 a passenger in 2009-10; it had a policy of recovering 50% of the cost of fares from passengers.
Results of a customer satisfaction survey of bus users showed overall satisfaction was similar to last year's - 97.8% compared with 98.1% - while 85.1% of users thought the service provided value for money, up on 70.5% the year before.
A total of 90.7% thought the service was more reliable, compared to 80.4% last year.
The differences were not significant so he wondered what impact the council had made with all its investment in bus services, he said.
Cr Bryan Scott said with a reported 74,000 vehicles in the city, people had so many other affordable options for transport.
"You can't assume looking at fares will necessarily impact on patronage."
Cr Louise Croot said people either paid a high price for parking or got on a bus.
"If you have a car full of kids and need to go to the supermarket, you are not going to take the bus."
Cr Duncan Butcher said reducing fares was not that easy, as the council would have to "find the money somewhere".
Cr Deaker told a finance committee meeting this week that given the situation with patronage, the council needed to retain the flexibility to make improvements to its services, something not evident in the council's proposed strategy for the procurement of transport services.
"This council would like to maintain some creative flexibility over contracting services for setting fares."
The council, as an approved provider of transport services, was required to prepare a procurement strategy and have it approved by New Zealand Transport Authority (NZTA) by October 1.
It "troubled him" that the strategy "threatened to take away" the council's ability to drop fares and it also put increasing emphasis on the council having to take the lowest price in any tender round, he said.
"It would be regrettable if we are absolutely bound by that."
Finance and corporate director Wayne Scott said the wording around fares could be changed to "fare adjustments", rather than increases, to give that flexibility.
The lowest cost scenario only applied if the bus company also met set service standards and there was a special circumstance clause available to not use it if the "reasons were right".
This strategy was reviewable and the council could approach the NZTA for approval in a special case, he said.
The finance committee endorsed the strategy with the changes and authorised Mr Scott to negotiate any amendments with the NZTA.
