Germany’s 2.5bn Euro public transport pricing experiment has ended. What have we learnt from it?
Germany’s 9 Euro Ticket offered unlimited travel on local and regional public transport for just nine euros a month during June, July and August
BY Marc Bichtemann
It’s been dubbed a huge success all round, and as the numbers for the 9 Euro Ticket in Germany come in, it certainly makes for a pleasing read. Over 52 million tickets sold in three months, 20% of travellers opted for public transport instead of the car, leading to 1.8 million tons of carbon saved. All very impressive figures which VDV, the German association of public transport operators, is keen to point out via its social media channels.
So, all good?
Well not quite. The 2.5bn Euro experiment also led to delayed and overcrowded trains, – though there are very few stories about crowded buses – and very little long term modal shift. One survey suggests that just 9% of those who purchased a 9 Euro Ticket will use public transport more often after the promotion ends, though the sample included a share of regular public transport users who are likely to just return to their normal travel patterns. Incidentally, the headline 52 million ticket sales also counted those who had monthly or annual tickets and whose subscription were turned into 9 Euro Tickets for the three-month period.
Overseeing a regional bus company, I was out and about during the first week in June when the 9 Euro Ticket launched, speaking to customers and staff about their initial impressions.
Reach
My encounter with Christine, a council worker who had bought the 9 Euro Ticket to “try and use the bus to get to work” really intrigued me.
She normally drives and told me that taking public transport, due to the connection required, adds about 30 minutes each way to her commute. Yet she tried anyway! Why? She was prepared to spend nine Euros on “this experiment”. She could have tried before the introduction of the 9 Euro Ticket and it would have cost her only 5 Euros for a day ticket. So, was price the driving factor to make Christine think about using public transport?
The 9 Euro Ticket was the talk of the town on a national level. It was in the news every day since it was first mentioned in February. It became a brand. People were looking forward to having it. There was a real hype around it. Everybody wanted one
No. See, the crux is that we would have never reached Christine with a local ticket offer unless we had invested our whole annual turnover into marketing.
Instead, the 9 Euro Ticket was the talk of the town on a national level. It was in the news every day since it was first mentioned in February. It became a brand. People were looking forward to having it. There was a real hype around it. Everybody wanted one.
Simplicity
The second aspect is simplicity – in her article from August 31, BBC correspondent Jenny Hill explained the success of the ticket with its nationwide validity which meant the user did not have to deal with the fragmented fare structure in Germany. There’s some truth in that, though the fare system is still nowhere near as fragmented as in some areas in the UK. Operator-specific tickets are rare in Germany as most are organised in regional transport associations where cross operator ticketing is standard. Still, the 9 Euro Ticket took away the fear of having the wrong ticket because you traveled across various fare zones.
As the 9 Euro Ticket was not valid on long-distance trains and coaches, few users have used the tickets to make longer inter-regional journeys across several fare boundaries, but it was good to know you could have without having to research and buy a range of ticket options.
The simplicity also benefited some of the operators. Our bus drivers loved it. No more searching for the correct fare on the ticket machine. Not having to worry about change made their life a lot easier and add to that with most customers having a 9 Euro Ticket after the first week or so, we started to see a real drop in dwell times at bus stops, improving punctuality. It is worth noting that cash sales on regional bus routes still represent a fair share of the revenue taken. In urban centres, the picture was quite the opposite with patronage growth causing crowding at interchanges and slowing down trams, buses, and regional train services due to the sheer number of people.
Revenue impact
Revenue protection was difficult too. Due to the short-term nature of the ticket, there was just no way to validate a 9 Euro ticket issued by another operator 300 miles away whose design and set up a driver or RPO had never seen before.
Then there is the issue of revenue allocation. In a multi-operator regional transport association with commercial and tendered routes, cross fare border agreements, route subsidies, etc. this was a real science. It is safe to say that the calculations of the balancing payments to make up for revenue loss, were crude and payments therefore higher than they would need to be. In the end, it involved a lot of guesswork.
Lessons for the UK
So what should a similar offer in the UK look like to make it a success?: Here are four tips:
Make it big. The price is not the deciding factor – yes, it needs to be attractive, catchy almost, but the key is to keep it in the news so that you reach the biggest possible audience. With a coordinated marketing effort, supporting the public discussion, reach would be amplified significantly.
Stick to the simplicity. One ticket, for the whole country and all local and regional modes of transport – no need to reinvent the wheel here. It worked.
Clearly the challenge in the UK, even more than in Germany, would be a fair revenue allocation and reimbursement. I would have suggested that an additional criterion for success of a ticket offer, is plenty of time to prepare. I fear though that this would have led to failure. Drawing up agreements, allowing legal challenges and so on would just have seen the ticket disappear into the box labelled “too difficult”. Instead, the spark and (almost unreasonable) deadline provided by the political parties when the 9 Euro Ticket was announced, acted as an enabler to just get it done.
Make it digital. Though this will limit access to the ticket somewhat, the data gained will by far offset the loss of a small customer group. Additionally, a digital ticket will be much easier to validate via On Board QR code scanners and ticket gates and potentially a huge data source on behaviour.
Make it longer. Three months was simply not enough to drive modal shift on a more permanent basis. People just won’t sell their cars if they know they’ll be back to square one in 12 weeks’ time. But a longer offer, even if more expensive, gives people an opportunity to plan, adjust and adopt a new habit. It also enables operators to extend and improve their networks and timetables, knowing they have the security of an attractive offer to fill those additional trains and buses.
£2 single fare
All these points draw into question how successful the planned £2 single fare offer for England will be. It barely made the headlines and circumstances (death of The Queen, new prime minister, and strong focus on household energy bills) as well as not being applicable in London, did its reach no favours.
If the offer is successful in attracting more first-time customers, it is likely to make things more difficult for operators. A sharp increase in the share of sales of single tickets on board, would result in additional dwell time at bus stops, reliability issues and a diminished customer experience, affecting particularly those who use the bus every day.
A similar point had been raised in Germany whereby regular users of public transport were suddenly faced with crowding and delays particularly on local railway services. However, the 9 Euro Ticket benefited those customers in equal measure as their monthly tickets were automatically discounted or part reimbursed, and their validity extended across the nation. This somewhat smoothed the anger.
In England, regular customers will not really benefit from the £2 fare but will face the potential consequences if more first-time customers take up the offer.
Germany in the meantime has agreed to have a follow up offer. Starting in January, it will be longer, digital, and valid across the country. But being priced somewhere between 40 and 60 Euros it will require most areas to completely change their fare structure. Lots of work ahead but there hasn’t been a day since the 9 Euro Ticket ended when the question of the new offer and the future of public transport in Germany wasn’t debated in the media for some reason or another. Now that can only be good news.
ABOUT THE AUTHOR: Marc Bichtemann is managing director at Kahlgrund-Verkehrs-Gesellschaft (KVG), a public transport operator in central Germany. He previously worked in the UK as managing director of bus operator First York and in various management roles with Virgin Trains East Coast.
This story appears inside the latest issue of Passenger Transport.
Lessons from Germany’s 9 Euro ticket
by Passenger Transport on Oct 6, 2022 • 3:08 pm No CommentsGermany’s 2.5bn Euro public transport pricing experiment has ended. What have we learnt from it?
BY Marc Bichtemann
It’s been dubbed a huge success all round, and as the numbers for the 9 Euro Ticket in Germany come in, it certainly makes for a pleasing read. Over 52 million tickets sold in three months, 20% of travellers opted for public transport instead of the car, leading to 1.8 million tons of carbon saved. All very impressive figures which VDV, the German association of public transport operators, is keen to point out via its social media channels.
So, all good?
Well not quite. The 2.5bn Euro experiment also led to delayed and overcrowded trains, – though there are very few stories about crowded buses – and very little long term modal shift. One survey suggests that just 9% of those who purchased a 9 Euro Ticket will use public transport more often after the promotion ends, though the sample included a share of regular public transport users who are likely to just return to their normal travel patterns. Incidentally, the headline 52 million ticket sales also counted those who had monthly or annual tickets and whose subscription were turned into 9 Euro Tickets for the three-month period.
Overseeing a regional bus company, I was out and about during the first week in June when the 9 Euro Ticket launched, speaking to customers and staff about their initial impressions.
Reach
My encounter with Christine, a council worker who had bought the 9 Euro Ticket to “try and use the bus to get to work” really intrigued me.
She normally drives and told me that taking public transport, due to the connection required, adds about 30 minutes each way to her commute. Yet she tried anyway! Why? She was prepared to spend nine Euros on “this experiment”. She could have tried before the introduction of the 9 Euro Ticket and it would have cost her only 5 Euros for a day ticket. So, was price the driving factor to make Christine think about using public transport?
No. See, the crux is that we would have never reached Christine with a local ticket offer unless we had invested our whole annual turnover into marketing.
Instead, the 9 Euro Ticket was the talk of the town on a national level. It was in the news every day since it was first mentioned in February. It became a brand. People were looking forward to having it. There was a real hype around it. Everybody wanted one.
Simplicity
The second aspect is simplicity – in her article from August 31, BBC correspondent Jenny Hill explained the success of the ticket with its nationwide validity which meant the user did not have to deal with the fragmented fare structure in Germany. There’s some truth in that, though the fare system is still nowhere near as fragmented as in some areas in the UK. Operator-specific tickets are rare in Germany as most are organised in regional transport associations where cross operator ticketing is standard. Still, the 9 Euro Ticket took away the fear of having the wrong ticket because you traveled across various fare zones.
As the 9 Euro Ticket was not valid on long-distance trains and coaches, few users have used the tickets to make longer inter-regional journeys across several fare boundaries, but it was good to know you could have without having to research and buy a range of ticket options.
The simplicity also benefited some of the operators. Our bus drivers loved it. No more searching for the correct fare on the ticket machine. Not having to worry about change made their life a lot easier and add to that with most customers having a 9 Euro Ticket after the first week or so, we started to see a real drop in dwell times at bus stops, improving punctuality. It is worth noting that cash sales on regional bus routes still represent a fair share of the revenue taken. In urban centres, the picture was quite the opposite with patronage growth causing crowding at interchanges and slowing down trams, buses, and regional train services due to the sheer number of people.
Revenue impact
Revenue protection was difficult too. Due to the short-term nature of the ticket, there was just no way to validate a 9 Euro ticket issued by another operator 300 miles away whose design and set up a driver or RPO had never seen before.
Then there is the issue of revenue allocation. In a multi-operator regional transport association with commercial and tendered routes, cross fare border agreements, route subsidies, etc. this was a real science. It is safe to say that the calculations of the balancing payments to make up for revenue loss, were crude and payments therefore higher than they would need to be. In the end, it involved a lot of guesswork.
Lessons for the UK
So what should a similar offer in the UK look like to make it a success?: Here are four tips:
Make it big. The price is not the deciding factor – yes, it needs to be attractive, catchy almost, but the key is to keep it in the news so that you reach the biggest possible audience. With a coordinated marketing effort, supporting the public discussion, reach would be amplified significantly.
Stick to the simplicity. One ticket, for the whole country and all local and regional modes of transport – no need to reinvent the wheel here. It worked.
Clearly the challenge in the UK, even more than in Germany, would be a fair revenue allocation and reimbursement. I would have suggested that an additional criterion for success of a ticket offer, is plenty of time to prepare. I fear though that this would have led to failure. Drawing up agreements, allowing legal challenges and so on would just have seen the ticket disappear into the box labelled “too difficult”. Instead, the spark and (almost unreasonable) deadline provided by the political parties when the 9 Euro Ticket was announced, acted as an enabler to just get it done.
Make it digital. Though this will limit access to the ticket somewhat, the data gained will by far offset the loss of a small customer group. Additionally, a digital ticket will be much easier to validate via On Board QR code scanners and ticket gates and potentially a huge data source on behaviour.
Make it longer. Three months was simply not enough to drive modal shift on a more permanent basis. People just won’t sell their cars if they know they’ll be back to square one in 12 weeks’ time. But a longer offer, even if more expensive, gives people an opportunity to plan, adjust and adopt a new habit. It also enables operators to extend and improve their networks and timetables, knowing they have the security of an attractive offer to fill those additional trains and buses.
£2 single fare
All these points draw into question how successful the planned £2 single fare offer for England will be. It barely made the headlines and circumstances (death of The Queen, new prime minister, and strong focus on household energy bills) as well as not being applicable in London, did its reach no favours.
If the offer is successful in attracting more first-time customers, it is likely to make things more difficult for operators. A sharp increase in the share of sales of single tickets on board, would result in additional dwell time at bus stops, reliability issues and a diminished customer experience, affecting particularly those who use the bus every day.
A similar point had been raised in Germany whereby regular users of public transport were suddenly faced with crowding and delays particularly on local railway services. However, the 9 Euro Ticket benefited those customers in equal measure as their monthly tickets were automatically discounted or part reimbursed, and their validity extended across the nation. This somewhat smoothed the anger.
In England, regular customers will not really benefit from the £2 fare but will face the potential consequences if more first-time customers take up the offer.
Germany in the meantime has agreed to have a follow up offer. Starting in January, it will be longer, digital, and valid across the country. But being priced somewhere between 40 and 60 Euros it will require most areas to completely change their fare structure. Lots of work ahead but there hasn’t been a day since the 9 Euro Ticket ended when the question of the new offer and the future of public transport in Germany wasn’t debated in the media for some reason or another. Now that can only be good news.
This story appears inside the latest issue of Passenger Transport.
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