As part of its annual plan process, the council is consulting the community on its new fees and charges.
The draft plan proposes an increase in bus fares from $2.20 to $4 for all patrons over 13 years old.
Strategic asset planning manager Doug Rodgers told councillors during an Infrastructure and Projects Committee meeting earlier this month the need for an increase was caused by the central government’s request for public transport authorities to increase the share of funding realised from private sources.
The council has a private share level (fares) of 9% over the past 12 months.
With the withdrawal of New Zealand Transport Agency (NZTA) subsidies for fares, the government has indicated it is not satisfied with the level of funding required of the government and local government.
Mr Rodgers said council took in about $170,000 per year in public transport fares, and received matching funding from NZTA.
To meet the government’s expectations, the council would need to be "doubling or tripling the fares," which was not feasible, so since December he had been having conversations with NZTA to find a "sweet spot", he said.
For that, it was proposed a flat fare of $4 for the next financial year and then $6 for the following two financial years should be the target.
"They [NZTA] are sympathetic to smaller centres. The trouble is our costs are quite fixed and the income we get varies with patronage.
"So [if] patronage flattens out, our costs will continue to remain, but our ratios get worse."
He said patronage had been growing in recent years, but he believed the fare increase would have a "slightly negative effect".
His modelling predicted a drop in patronage by 30% and he said the service was used more by "transport disadvantaged people" which were young and elderly people and people with disabilities.
"Yes, we will get more revenue, certainly, but we might have less people on the bus."
Mr Rodgers also said the council topping up funding to keep fares down was off the table and they would be looking into other commercial opportunities and streams of revenue such as advertising on bus stops.
Invercargill Mayor Nobby Clark said it was a bit of a "chicken and egg situation" as the council was forced to push up the rate of bus trips and, usually, there was not much appetite in the market to subsidise transport fares.
Speaking to the Otago Daily Times yesterday, resident Peter Barnes said while only a small part of the population in Invercargill relied on public transport, they were usually the ones that needed it the most.
"I think this increase will hurt many as everything is so expensive at the moment and the bus prices just went up not that long ago."
Consultation about fees and fares ends on April 13.
