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How fare populism and micromobility are affecting public transport

In the first annual review, Stefan Weigele and Tarik Shah observe increasing ‘fare populism’ in public debate on an attractive public transport system. In addition, they dare to forecast the future development of new mobility and, in particular, the much-discussed stand-up electric scooters in Germany.

What in your opinion were the central topics in public transport over the past year?

Tarik Shah: In 2019, ‘climate protection’ finally became a dominant topic on the political agenda. The Fridays for Future movement and the resultant heightened public awareness have contributed to the fact that the German government has now also made some headway and, with its Climate Package, has for the first time adopted an interdepartmental long-term strategy. The sometimes fierce reactions to the measures adopted, which were rightly perceived to lack ambition, already show that the subject is likely to become even more explosive and dynamic in 2020. The transport sector in particular is likely to remain the problem child with regard to climate change.

Stefan Weigele: In this environment, there are two trends currently visible in the public transport sector: On the one hand, there is an apparent willingness on the part of politicians to provide significantly more funding for measures which should (supposedly or actually) contribute to strengthening public transport in the modal split. This, however, also increases the influence of politicians and public authorities on transport associations and transport companies, because it is a well-known fact that ‘he who pays the piper calls the tune’. This trend is already more or less evident in many transport associations and is likely to continue in 2020.

On the other hand, political decision-makers are increasingly using this influence to demand allegedly ‘simple’ fare measures, such as a €365 annual pass or even free public transport. However, this overlooks the fact that public transport fare measures have proven to have very little effect on increasing demand, especially when compared to greater investment in the quality of the service. What’s more, there is an urgent need for coordinated, long-term concepts for a strong public transport system instead of short-term, selective climate pilots and rash decisions.

A kind of ‘fare populism’ is increasing in public debate.

However, since these ‘simple’ fare measures can be easily communicated to the public as determined action, this type of ‘fare populism’ is currently very popular. This will certainly continue in 2020 and is a major challenge for the industry, since every euro in subsidies can only be spent once – either in fare measures or in strengthening the public transport service. But it is also clear that general aversion reflexes are not the answer here. Instead, it is a matter of entering into constructive dialogue with political decision-makers and making positive use of the fundamentally greater importance of public transport.

What can civity contribute to this debate?

Tarik Shah: We are working to objectify the debate by processing factual information. As part of our independent study entitled The Viennese Approach: Much more than the €365 Annual Pass, we showed in detail, for example, that the low-price annual pass in Austria’s capital city did not win an above-average number of new customers for local public transport. A noticeable strengthening of the modal split in favour of public transport, on the other hand, did take place when those responsible previously invested consistently over a number of years in an attractive transport service.

The example of Vienna clearly shows the importance of the quality of services for the modal split.

At the same time, additional sources of financing were developed in Vienna, for example, by significantly increasing the employer’s levy in favour of public transport (‘underground rail tax’) and, above all, the intensity of parking space management. All in all, this has significantly increased the scope for transport policy in the Danube metropolis in recent years – an insight from which German cities too can learn.

In any case, there is a need for regionally adapted strategies and a coordinated approach between political decision-makers, public authorities, associations and transport companies as to how public transport can best and, above all, sustainably be strengthened in its respective areas. A ‘one-size-fits-all’ solution, on the other hand, is not possible; transport areas in Germany are too diversely structured for that. That’s why we support our clients with a deliberately holistic consulting approach, which also actively considers the involvement of the political level and develops appropriate measures.

How do you assess the further development of stand-up electric scooters, car sharing, etc.?

Stefan Weigele: Another important development in the year that is coming to an end was the launch of stand-up electric scooters as a new mode of transport for micromobility. We were able to support this development right from the start with both data analytics and strategic consulting projects.

At the same time, however, there are increasing signs that the ‘new mobility bubble’ is about to burst and that the opportunities and levers of new transport services are being adjusted to a more realistic level. In the sense of a hype cycle, this is a completely normal development.

Many new mobility providers have started as Uber challengers and will end up as suppliers for public transport. This means that most new mobility business models need to be rethought. In future, these complementary mobility services will be selectively ordered by the public sector in order to complement public transport as required.

Subsidy pools instead of venture capital – must new mobility reinvent itself?

To be honest, it is a mystery to me why many providers actually expected to bring about a turnaround in transport in the urban mobility market and at the same time achieve high margins. If many investors had taken a more in-depth look at the low cost recovery rates of public transport and the sometimes precarious employment conditions in the taxi industry that could have led to a lot less money being wasted.

In future, it will be more a question of which provider takes how much in subsidies. The race will be exciting and I hope that it will not be at the expense of hugely upgrading classic public transport which is so urgently needed. Otherwise, we will end up with many colourful showcase mobility offers with no benefit to climate whatsoever.