Opportunity abounds for public transport

Russell King reckons there is about to be a golden opportunity to transform public transport in New Zealand, to make it the preferred choice of 10 times as many people as it is today. This article is abridged from a talk which the transport guru and editor of the Transport Leader Newsletter gave to participants at the 2025 Public Transport Australia and New Zealand conference in Auckland

Public transport in New Zealand is already changing lives for the better. Every time someone breathes cleaner air because they took the bus instead of driving; every time a family struggling to make ends meet saves money because they don’t need a second car; every time an elderly person sees their family and friends and isn’t lonely because they can still get around the city. But what if we could multiply that impact tenfold?  

The current challenges are real and daunting. Patronage is still recovering from COVID. Costs continue to rise while revenue growth remains sluggish. Community support feels fragile, and subsidy levels are unsustainable. 

Several US cities are considering record cuts to public transport services, slashing routes that people depend on because the numbers just don’t add up anymore. 

In the US, only four percent of people use public transport, and in New Zealand, as of 2023, only 3.7 percent of employed people commuted by bus, and 1.3 percent by train.

So why am I convinced that everything could change? Because we’re at what I call a “Gandalf moment”. In The Lord of the Rings trilogy, when Gandalf returns as Gandalf the White, he announces that he has returned at the turn of the tide. When it comes to public transport, New Zealand is at the turn of the tide, but most people haven’t realised it yet.

The Game Changer

Here’s why everything is about to change: Road User Charging is on the way.

For the first time, New Zealand is going to start pricing roads properly. Peak-hour travel will have a cost. The “free” infrastructure that made cars so attractive won’t be free anymore.

Look at what happened when New York introduced congestion charging this year: buses suddenly moved 20 percent faster, two million fewer car trips every month and public transport ridership increased by 10 percent, all without optimising pricing or services.

The economic equation that has favoured cars for decades due to public subsidies is about to flip. Road User Charging can create a new dynamic where improved public transport services see significant increases in patronage, allowing for fares that better match service costs, reducing the need for subsidies on current services, and enabling further investment in improvements, thereby creating a virtuous cycle.

The biggest opportunity lies not with the people already using public transport, but with the potential customers who would choose public transport if we got it right. Too many transport agencies have no idea who these people are, where they live, where they work, or what would make them switch from their cars. In effect, they are driving in the dark with their lights off.

Once you understand your customers, you can focus on the “non-negotiables”, the things that determine whether someone chooses public transport — clean vehicles that create a pleasant experience and frequent services that show up when they’re supposed to show up.

Free not the answer

Many people believe the secret lies in making public transport cheap or even free. The evidence says otherwise. 

Queensland tried 50-cent flat fares across its entire system. Result? Virtually no one left their cars at home, but they did slash their fare revenue, making it harder to maintain services. 

Queensland just cancelled a light rail project on the Gold Coast. Lower fares make the business case for new projects less appealing.

The best transport systems do the opposite. They regularly increase fares, not in big jumps, just steady increases slightly above inflation, and use that revenue to improve services. They provide targeted support for people who genuinely can’t afford full fares.

The really smart systems are starting to price more dynamically, like airlines do. Instead of running extra buses at peak times, which increases costs without increasing revenue, they adjust prices to spread demand more evenly.

Become dynamic

Let me tell you the tale of two train operators. The first sees retail space in stations as a distraction from their “core mission.” They’ve created so much red tape that many retail spaces sit empty.

The second actively seeks out great retailers for their stations, makes it easy for businesses to operate, and creates vibrant spaces that people actually want to spend time in.

Guess which one passengers prefer? Guess which one generates more revenue to reinvest in better services?

The best transport systems understand that commercial success and public service aren’t opposites; they’re partners.

Leverage technology 

Technology can be a great support for public transport, but only if we use it intelligently:

• Christchurch has GPS-based real-time passenger information with machine learning for bus arrival predictions
• Santa Clara Valley uses AI to give buses green lights when they’re running behind schedule, resulting in a 20 percent reduction in travel times.
• Transport for London is piloting the deployment of buses dynamically to areas with the highest demand, resulting in a 15 percent reduction in wait times.
• Singapore fine-tunes train frequencies in real-time during peak hours

The leading transport systems are moving beyond contactless ticketing to no-infrastructure fare systems where an app on your phone knows whether you’re on the train or bus and charges you accordingly. This eliminates the need to tap on or off, saving infrastructure costs and speeding up journey times.

The truly innovative agencies are considering incorporating loyalty schemes into their fares and collaborating with local businesses. Imagine your payment card being recognised at the station, the system understanding your morning routine, and the coffee shop at your destination receiving your order and timing it perfectly for your arrival.

Improvement plans

You can do everything right, but if your bus is stuck in traffic because there are no bus lanes, you’re fighting with one hand tied behind your back.

In the UK, they’ve created “Bus Service Improvement Plans”, formal partnerships between transport operators, local councils, and central government. Not just handshake agreements, but funded, long-term commitments to transform buses.

We also can’t build all the skills we need in-house or simply hire consultants; it’s too expensive. We need to collaborate to create a capability that can be shared across agencies. Every operation may have different fares, but that doesn’t mean they can’t share fare-setting expertise. The same is true for marketing, technology, and commercialisation. Several models can be adopted to achieve this goal.

Transport for London’s size means that it makes sense for the city to have the capabilities in-house. However, they provide their expertise to smaller operators on a consulting basis. In New Zealand, as it already possess many of the capabilities, larger operators like Auckland could play an equivalent role, supporting the rest of the country’s public transport capabilities.

The Future Is Within Reach

Imagine getting on a bus in five years. It arrives exactly when promised because AI optimises the routes in real-time. You don’t fumble for a card; your phone handles everything seamlessly. The journey is smooth because buses get priority on roads that charge appropriately for their use. When you arrive, your morning coffee is waiting because the transport system is connected to the entire urban ecosystem.

This isn’t science fiction. Every piece of technology I just described exists today. What we need to do is put it together.

We have all the pieces of the puzzle: Road User Charging creating the economic incentives, urban densification creating the demand, and the people who understand how to make public transport work.

This is about more than buses and trains. When we get this right, we’re moving toward a future where cities are more liveable, air is cleaner, communities are healthier and more resilient, and the economy is stronger.

Key takeaways

• The New Zealand Government has signalled its intention to proceed with Road User Charging (RUC) for all vehicles.
• Road User Charging provides a golden opportunity to significantly increase public transport use in New Zealand as it begins to unwind the subsidies that have supported car use.

Public transport needs to grasp the opportunity through:

• Genuine customer focus to meet the needs of potential customers, not just existing ones.
• High-quality, frequent and reliable services.
• Smart, not cheap fares.
• Embracing commercial opportunities.
• Leveraging technology, such as in ticketing and using AI to provide more demand-responsive services.
• Building partnerships to deliver integrated transport thinking and share capabilities.
• Public transport agencies should aim to make public transport the mode of choice for ten times as many New Zealanders as today.
• The required changes should begin now, rather than waiting for Road User Charges to be implemented.