02How to increase public transport use
What makes people choose public transport?
To encourage modal shift, public transport must be a more attractive option than the private car. When evaluating any policies put in place, we should therefore focus on how they adjust the relative benefits of both.
The factors determining the competitiveness of public transport can be broadly split into two categories: financial and non-financial. If public transport is not the more competitive choice in both categories, policies to encourage modal shift are unlikely to succeed. Public transport must be both the more affordable and the more convenient choice.
Figure 2 outlines the factors determining mode choice and the competitiveness of public transport. A successful approach to public transport should consider the combinations of policies that will encourage modal shift. To create an effective strategy the ‘A’ actions on the left side of the model, based on non-financial factors, should be adopted in combination with the ‘B’ interventions on the right.
Figure 2: Factors determining the attractiveness of public transport
Non-financial determinants
If we consider first the non-financial factors contributing to modal shift, a good starting point is to remember that the key advantage of the car is its convenience. Therefore, to offer a compelling alternative, public transport also needs to be convenient. In practice, this means creating systems with frequent services that are integrated with other connecting services and reliably serve destinations to which people wish to travel.
Policies to help achieve this include better coordination and integration of different modes of public transport, prioritising public transport over other traffic to increase speeds and reliability, and increasing the number of people living around stops and stations.
Enable more people to live near public transport
Maximising the number of people who can easily access a public transport network and creating a viable system is not just about network coverage and service frequency. Greater demand for public transport can be brought about by developing and increasing the density of homes around transport stops, putting more people within reach of services.
Previous analysis by the Centre for Cities has shown this to be a key distinction between cities in the UK and elsewhere in Europe. While the coverage of public transport networks is lower in a number of UK cities, where services exist a consistent difference between large cities here and those on the continent was found to be that the latter had many more people living within service catchment areas, so making public transport accessible to more people.7
Densification and development around stations and stops
Improved and expanded networks (see Policy 2 and Policy 3) or discounted fares (see Policy 5) are unlikely to significantly reduce car trips in low population density areas. Despite improvements to accessibility and affordability, frequency of service and destination choice will not be sufficiently convenient to persuade people out of their cars unless large subsidies are given to service providers, in turn undermining the financial viability of a system.
Therefore, alongside improvements to transport, there should be a push in the UK’s large cities to increase the number of people who live close to stops on existing networks.
There are several examples where cities have brought transport and housing together as they expanded their networks. Lille has a successful history of transit-oriented development (TOD) around its city centre and in the suburbs (see Case Study 1) and has enacted a policy known as ‘DIVATs’ (Disque de Valorisation des Axes de Transports). These are 500 metre zones, with a tram station at the centre, where special planning measures are put in place including specifying minimum densities and an emphasis on mixed-use development and active transport.8
Increasing the density of property development can be an important revenue source for public transport. The funding model for Hong Kong’s Mass Transit Railway (MTR) allows the system operator to develop the land around new stations. In 2019, for every pound collected from tickets, a further 60p came from either property rental and management or commercial businesses using stations.9 10 Montreal has used a development tax to capture the value created by the expansion of its new light rail network, as discussed in Case Study 2. This can work in the UK too: Tax Incremental Financing (TIF) has been used as part of the recent Battersea and Nine Elms extension of the London Underground Northern line (see London case study).
Case study 1: Transit-oriented development, Lille Metropolitan Area
A successful policy of increasing the density of surrounding property was applied during construction of Lille-Europe station in 1994 and improvement of the existing Lille Flandres city station. However, this policy has since been extended outside the central area.
Armentières, a suburb of Lille, is a once-successful commercial area which suffered from deindustrialisation. As part of urban renewal efforts beginning in 2006, a deserted zone around the railway station was redeveloped with an intermodal transport hub alongside commercial and residential space.
The station has been improved with a new forecourt opening on to the city centre, a sheltered bus interchange and a 450-space car park to encourage park and ride journeys. Bus and bike lanes have been constructed to help passengers switch between transport modes. These changes were accompanied by the launch of intermodal ticketing, allowing users to travel by train, bus and bike share across Lille with the same ticket and daily fare caps.
Residential density for the 800-metre zone around the station is now 39 residents per hectare, compared to an average density of 18 inhabitants across the surrounding metropolitan area.11
As a result of these efforts the number of passengers using the station has increased from 3,300 per day in 2005 to more than 5,000 in 2012, making it the second busiest regional rail station in the metropolitan area after central station Lille-Flandres.
In the 800-metre zone around the station the share of journeys taken by public transport is four times higher than the surrounding urban area with the number of car journeys below the metropolitan average. This is particularly notable considering that the wider urban area of Armentières has seen a fall in the share of journeys taken by public transport alongside one of the largest increases in car journeys in the area.12
The underlying success of these densification projects and the wider rejuvenation of Lille is down to strong political intervention, local freedom to make spending decisions and large financial resources. The Versement transport tax (a regional transport tax on employers’ payrolls) alongside waste collection taxes, retaining a share of VAT, and fees from public transport and water treatment, mean that the Lille metropolitan authority raises 78 per cent of its own budget, giving it considerable autonomy to invest in these densification projects.
Case study 2: Land value capture, Montreal, Canada
The Reseau Express Metropolitan (Express Metropolitan Network or REM) is an automated light rail system that is part funded by land value capture. Announced in 2016, phase one opened in September 2023 with construction scheduled to finish in 2027. When complete the system will have 26 stations and 42 miles of track.
CA$600 million (€443.49 million) out of the project’s total budget of CA$6.9 billion (€5.11 billion) is expected to come from a land value capture scheme based on property development charges.14 A tax of CA$10 (£8) per square foot of floor area will be levied on developers for all new construction within a radius of 500 to 1,000 metres from the REM stations over the next 50 years.15
The scheme has faced some local resistance with residents living around the first phase of the route opposing higher density development.16 This is expected to be less of an issue for other parts of the network. Planning bylaws in areas where the network is still under construction permit high density development and the route goes through former industrial land in Eastern Montreal rather than residential areas.17 18 This experience shows how the success of any policy greatly depends on the context that it operates in.
Increase frequency and expand existing services
There are significant gains to be made by integrating and improving existing networks in the UK. For example, recent research by Centre for Cities found that around 300,000 more people could reach Glasgow city centre easily if the existing public transport network – heavy rail, subway and buses – was better integrated and had more frequent services.19
Integrate existing networks
Walking to and from transport stops, waiting and transferring are all viewed as more onerous than riding by many passengers.20 The deregulation of bus services in 1986 in most parts of the UK introduced competition but also created a more fragmented system. Although partnerships between local authorities and transport operators across some areas have successfully improved integration between networks (see Policy 3), more can be done to ensure passengers can switch between modes quickly and easily to reach their destination.
Integration of services offers the opportunity to improve the performance of existing transport networks by making the transfer between modes seamless and simplifying fare structures. The aim of integrating services should be to minimise travel times to key destinations for the largest possible number of passengers.
There are several examples around the world where better integration of services has seen public transport use increase significantly. Often this is linked to the introduction of smartcards.
Switching from cash to smartcard or contactless-based payment helps to reduce dwell times at bus stops which account for between 25 to 30 per cent of travel time in urban settings. If this dwell time is halved overall bus journey times can be reduced by up to 10 per cent.21
New York introduced its MetroCard in 1993, allowing travel across buses and subways with a single ticket. This contributed to a 36 per cent increase in ridership on buses and subways between 1995 and 2005 while the population increased by only seven per cent. The immediate effects were more pronounced for bus ridership with overall bus patronage up 40 per cent and rail ridership increasing by 17 per cent during this period22 while weekday subway ridership grew just 17 per cent.23 The impact of the MetroCard was significant in suburban areas too. Ridership on the Metro-North and the Long Island Rail Road grew by 14 per cent relative to a suburban population increase of 6 per cent. This data suggests that bus rides to subway stations replaced car journeys.
More recently, Portugal integrated existing public transport modes and operators into a single ticket with a monthly price cap designed to incentivise take up. The effect of the policy has varied across the country; Lisbon has experienced a fall of 1.7 per cent in car trips to the city centre and train journeys between the suburbs and city centre increased 25.7 per cent between March 2019 and February 2020.24 The improvements made to public transport integration have been complemented by policies to discourage driving into the city centre such as road pricing and parking levies (see Policy 6 and Policy 7).
Passengers are sensitive to both the total fare for a journey and the number of times a ticket must be purchased. Integrating a transport network allows clearer and simpler pricing structures and the introduction of fare caps where a journey involves transferring between modes. When an integrated zone-based fare system with free transfers was introduced in Haifa, Israel, single ticket sales jumped by 25 per cent over the first year following integration. Fare box data indicated an increase of 7.7 per cent in passenger trips and 18.6 per cent in boarding (one passenger can board multiple buses over the course of a single journey). The number of passengers boarding per trip went up from 1.38 to 1.52 indicating that people were making use of the free transfer option and travelling across a wider range of routes. This simplified fare system is thought to have contributed to reversing a downward ridership trend.25
Effective integration requires a management organisation or operator at a suitable regional level. This is a theme that runs through the case studies in this report including that of Translink in south east Queensland.
Case study 3: Translink, South East Queensland, Australia
Translink covers a coastal region in eastern Australia. It serves a population of 3.8 million, 90 per cent of which is based in three cities – Brisbane (2.6 million), the Gold Coast (600,000) and the Sunshine coast (400,000).
Prior to 2004 there were 18 different operators running public transport, including trains, buses and ferries, in Queensland. After being set up at a cost of AUS$35.9 million (£33.5 million at today’s prices) Translink gained control of setting fares and launched a new integrated ticketing system. This organised the public transport network into eight zones based on concentric circles around central Brisbane. Passengers are now charged according to which zone they travel to and from regardless of the mode or modes of public transport used to complete their journey.
In 2008 Translink introduced smart ticketing with a Go Card on which ticket credits could be stored. In 2019, Cubic, the company behind the London Oyster and New York Metro cards, signed a contract to oversee the introduction of contactless card payments on Translink services.
Since then, smart ticketing has been widely adopted by passengers; by 2015 it accounted for 85 per cent of journeys made by public transport. This is partially due to lower prices for Go Card fares than comparable paper tickets as well as off-peak discounts only being available on Go Card.
Although Translink has used a range of policy levers to encourage public transport use, integrated ticketing has contributed to sustained growth. Analysis by Booz and Co. attributes a 3.5 per cent increase in ridership directly to the integration of ticketing.26
Improve and expand networks and increase frequency
The frequency, reliability and availability of routes is a significant factor in encouraging public transport use. Infrequent and unreliable services make public transport less attractive and prompt would-be users to choose to travel by car.
Bus franchising is one way to improve service levels as it allows local authorities or transport bodies to specify routes, service frequencies and fares rather than, as is the case with a commercially run network, basing decisions on these factors solely on the commercial viability of a route.
Having control of the bus network also means that local authorities can cross-subsidise services with revenue from more profitable routes supporting those which may not be commercially viable but which are seen as being important for connecting communities. This ‘big picture’ approach towards planning an integrated network also allows cross-subsidy between modes – for example, Transport for London uses revenue from the Underground rail system to subsidise the bus network – and allows transport authorities to draw on other revenue generation mechanisms (see Policy 6 and Policy 7). London’s experience of bus franchising in the early 2000s (see London case study) went on to influence franchising in Singapore, as outlined below.
Improvements to services can be delivered without franchising. In England, Enhanced Partnerships – like Bus Service Improvement Partnerships in Scotland and Welsh Bus Partnerships – see operators and local authorities work together in a more incremental approach to improving service standards. Unlike franchising, these initiatives do not allow local government to set routes or remove contracts if operators are underperforming.
Brighton and Hove Council cites its partnership with local operators as the reason for having the highest bus use per head outside London and for bringing into service a new fleet of low emission vehicles. The partnership agreement has been able to achieve increased service frequencies and further bus priority measures, real-time information and improvements to ticketing.27
To supplement commercially run networks local authorities have sometimes chosen to operate their own bus routes. For example, Swansea’s local authority runs its own subsidised routes to complement the commercial network.28 However, such routes can be vulnerable to budget pressures where a local authority needs to free up resources to pay for essential services. This was the case in 2023 when Bath and North East Somerset Council cut a number of routes and replaced some others with Demand Responsive Transit, where passengers book mini-buses to take them to privately operated routes.29
Municipal bus companies remain an option for network expansion. While England’s Bus Services Act 2017 makes it illegal to establish a municipal bus company, Scotland’s Transport Act 2019 will allow the formation of municipal bus companies. Any Scottish city examining this route should consider whether the municipal bus company would operate as a sole operator, part of a competitive market or as part of a franchised network. Providing a service alongside commercial bus operators can prove a challenge; for example, Edinburgh city-owned Lothian Buses had to undergo significant restructuring after substantial losses in competitive ‘bus wars’.30 Establishing a municipal bus company also requires significant capital and revenue investment.
While there are a handful of municipal bus companies that withstood bus deregulation in the 1980s and still operate in the UK, including in Edinburgh, Reading and Nottingham, they too face pressure from constrained local authority budgets. For example, Halton Transport ceased operation in 2020 after falling into debt.31
Case study 4: Bus contracting model, Singapore
In 2016 Singapore’s Land Transport Authority (LTA) took over bus planning and setting fares from individual operators following the model used by Transperth, Australia and quality incentives used in London. The market had previously operated as a duopoly between SBS Transit and SMRT Buses until their contracts expired in 2016. The aim of the change in operating model was to increase services (and therefore ridership) and to keep fares low. Under the commercial operating system operators felt that this was not commercially viable.33
The new system means there is no revenue risk for operators. Operators collect fares but hand this revenue direct to the LTA. They are paid according to the reliability of services with vehicles tracked by the authority to monitor this. A competitive tendering process has increased competitiveness with new operators entering the bus market and performance levels increasing across both existing and new operators.
Using this model, the LTA has introduced higher frequency requirements for operators: targets were upped to require all bus services to run at intervals of not more than 15 minutes with feeder services every six to eight minutes. There are also benchmark reliability targets for each route. Exceeding these targets can mean bonuses up to 10 per cent of contract value for operators while payment can be reduced by up to 10 per cent if the operator misses their targets.34
As a result of these new frequency requirements ridership has steadily increased; up from 3.94 million daily trips in 2016 to 4.10 million in 2019. Further benefits for the city include a 25 per cent reduction in waiting time for 292 high-frequency buses while 75 per cent of bus services are less crowded during peak hours.
Under this model government subsidy is still required. In 2018-19, the operating cost – paying the bus company contracts and maintaining assets – was s$1.925 billion (approximately £1.4 billion in today’s prices.) Fare revenue totalled s$834 million (approximately £614 million in today’s prices) meaning that government grants had to cover the remaining s$1.024 billion (approximately £750 million in today’s price), which is more than half the operating cost.35
Singapore is also able to raise revenue through its road pricing and car ownership measures (see Policy 6) which helps create a low-congestion, efficient – and therefore cost-effective – environment in which to run bus services.36
Prioritise public transport
Giving public transport priority over other traffic both increases its speed and reliability while reducing the convenience of private transport. Bearing in mind the value that passengers attach to service speed, frequency and reliability,37 this has the potential to increase ridership and contribute to a virtuous cycle of greater demand, raising revenue and service provision while simultaneously reducing the number of cars on the road.
Public transport prioritisation measures
Passengers value journey time and reliability. A quarter of non-bus users cite long door-to-door journey times as their main reason for not opting for the bus and a further 18 per cent feel that buses are not reliable enough.38
Bus journey times have risen by, on average, nearly one per cent per annum in the UK. As a result, over the past 50 years bus journey times have increased by almost 50 per cent in congested urban areas. This contributes to a downward spiral for bus services: slower speeds increase journey times and reduce reliability while higher operating costs push fare prices up. As fewer people choose to travel by bus (for these reasons) services decline further.39
It has been estimated that if bus frequencies are maintained, every 10 per cent decrease in operating speeds leads to an 8 per cent increase in operating costs. If this is passed on to passengers through higher fares, estimates suggest there is a 5.6 per cent fall in patronage. If operators choose to reduce service frequency, a 10 per cent deterioration in operating speeds would lead to a 10 per cent reduction in frequency and five per cent fewer passengers.40
There are numerous examples of public transport prioritisation measures across the UK. Bus priority lanes have been used, including in Edinburgh (see Case Study 5), but also guided busways in Manchester as part of the Cross-City package. This includes a seven-kilometre guided busway, as well as restrictions to general traffic on Oxford Road between 06:00 and 21:00. Following its introduction, the journey time by bus between Leigh and Manchester city centre has reduced from 60-90 minutes to a consistent 50 minutes.41 An estimated 20 to 25 per cent of those using the busway previously made the journey by car.
However, what is clear from examples from the UK and the rest of the world is that enforcement and maintenance of bus priority measurements are key. These measures should not be viewed as ’quick fixes’ but long-term traffic management tools.
Case study 5: Bus priority lanes, Edinburgh
Edinburgh’s Greenways, introduced in 1996, provide one example of a high-profile bus priority measure. The lanes, which have green tarmac surfaces, are restricted to buses between 07:30-09:30 and 16:00-18:30 on weekdays with some restrictions also applying on Saturdays between 08:30-18:30. The aim was to prevent bus speeds declining during peak times.
The bus priority restrictions were initially enforced by traffic wardens and it was estimated that private vehicles using Greenways during operational hours were 15 times more likely to be caught compared to driving in a conventional bus lane.39
It has been estimated that, because of Greenways, bus speeds improved by five per cent during the morning peak at the same time as other UK cities saw bus speeds decrease. There was also an increase in the reliability of services using Greenways which was not matched for conventional bus lanes in Edinburgh.43
However, Greenways have since seen their effectiveness decline. This has been linked to a decline in enforcement with over-reliance on cameras to deter car drivers. A lack of maintenance has resulted in sections of lane losing their green colour which has reduced awareness among drivers of the existence of the bus priority measures.37
Financial determinants
While the policies above have focused on improving the value that a public transport system delivers to shift the non-monetary benefits of public over private transport, clearly the difference in monetary costs is an important consideration for many people. Policies that have been used to make public transport financially more attractive include ticket price reductions and interventions to make private car use more expensive.
Make public transport more affordable
Discounted ticketing and fare caps
Post-Covid, discounted ticketing policies such as Germany’s €9 train tickets45, Japan’s ‘Go To Travel’ scheme46 and free commuter rail tickets in Spain47 have made headlines and been heralded as ways to encourage people back on to public transport. Meanwhile in the UK bus fares are capped at £2 until November 2024.48 This is understandable – fare reductions, especially during a cost-of-living squeeze, are eye-catching.
Schemes like those in Germany and Spain proved popular with passengers. In Germany around 38 million people used the scheme – nearly half the population – and as many as one in five Germans said they used public transport regularly for the first time following the introduction of the monthly pass. During summer 2022, while the scheme operated, there was a 42 per cent rise in train journeys compared to 2019 with an 80 per cent rise in travel to tourist destinations.49 In Spain, discounted ticketing prompted an increase in usage of around 35 per cent, restoring passenger numbers to 95 per cent of pre-Covid levels.50
However, if the aim is to encourage long-term modal shift, governments and operators should approach discounted ticketing schemes with caution for the following reasons:
- These schemes come with a hefty price tag. Germany’s €9 ticket scheme cost around €2.5 billion to implement and Spain’s around €700 million.51
- The impact on modal shift remains unclear. In Germany data suggests the scheme generated additional demand without significant modal shift: whilst rail ridership increased by around 40 per cent between June and August 2022 it reverted to 2019 levels from September.52 There are also concerns that free public transport shifts people from active transport while the impact on car usage remains marginal and is often offset after a few years of traffic growth.53
- The ridership gains tend to be short term, lasting for the duration of the discount, as passengers only view the fare reduction as ‘good value’ initially, then view the new fare as the norm. Evidence from short-term free public transport trials shows that any ridership increases dissipate after removal of the financial incentive.54 A flat fare also means that only longer journeys are viewed as being ‘good value’.
- Discounted ticketing policies do not consider increased operating costs, putting the longer-term sustainability of transport networks at risk.
- Discounted ticketing policies may overwhelm network capacity, reducing perception of the network’s effectiveness by those who use it regularly. The popularity of Germany’s discounted ticket scheme resulted in overcrowding on trains and stations which risks deterring existing users.55
- Finally, discounts alone are unlikely to result in a long-term change in travel habits if cars remain the more convenient option. A 2023 Transport Focus survey in the UK found that 27 per cent of former regular bus users would be encouraged to use the bus again through ‘better value’ fares but among people who had never used buses more frequent services were more important than ‘better value’. Only 10 per cent of people not currently using buses said that the £2 capped fare scheme would encourage them to travel by bus.56
From these experiences we can see that any discounts to fares need to be accompanied by improvements to public transport – for example quicker or more frequent journeys – or by measures to make car ownership and driving less appealing (see Policy 6 and Policy 7 below) if they are to bring about long-term change.
Barcelona is an example of a city which has implemented discounted ticketing in conjunction with other policies aimed specifically at reducing car ownership. This is explored in more detail in Case Study 6.
Case study 6: T-Verda card and car disincentivisation policies, Barcelona
The T-Verda card is a travel pass that was introduced in Barcelona in 2017 to encourage modal shift by giving free transport to anyone who gives up an older polluting vehicle. It is particularly interesting in the UK context given the recent controversy surrounding London’s Ultra Low Emission Zone.
The card grants holders free travel by public transport for three years in zones 1 and 6 of Barcelona’s metropolitan area on the condition that the passholder decommission their car or motorcycle and commit to not buy one for the three years covered by the pass. It only applies to cars without an environmental certificate – petrol cars manufactured before 1997, diesel cars sold before 2006 and pre 2004 motorcycles.
Over 12,000 passes were issued between 2017 and 2021 of which half were issued between 2020 and 2021. In 2020 it was estimated that 50,000 vehicles were classed as polluting vehicles under the T-Verda and low emission scheme. Therefore, the scheme represents a possible reduction in polluting vehicles of 24 per cent.
This ‘carrot’ has been accompanied by ‘stick’ policies which have encouraged take up. These include:
- A low emissions zone (LEZ). An uptick in pass applications in November 2020 coincided with the announcement of a low emissions zone operating from Monday to Friday from 7:00 to 20:00 – 729 applications were received during this month of which 595 were approved.
- Converting 121 intersections in the city into ‘superblocks’ – 400 square metre blocks of land within the city into which vehicles are not permitted to enter.
Between January and June 2018, the 2,283 users of the T-Verda card made, on average, 35 trips per month each. The ratio of trips to user is similar to that of other tickets which suggests it is being used for everyday mobility.57 The cost of providing T-Verda cards has amounted to between €95,000 and €200,000 in each year since the start of the scheme, significantly cheaper than ‘blanket’ ticket discount schemes.58
While LEZs in the UK, such as London and Glasgow, have been accompanied by scrappage and vehicle retrofit schemes for individuals and businesses, aimed at improving compliance and reducing pollution, this kind of discounted ticketing has significant potential to encourage longer-term modal shift because it mandates changing transport modes rather than the upgrading of a private vehicle.
Make driving and parking more difficult and expensive
Part of the policy approach to making public transport more competitive is to make private transport less attractive. Charging drivers to use roads and to park their cars, as well as limiting the supply of parking spaces, are all approaches that have been taken in cities in the UK and abroad.
Road pricing measures
One way to make driving less attractive is to charge drivers for road use. Congestion charging levies a charge on vehicles entering a specific area (usually the centre of a city) to deter private car use and in turn reduce traffic congestion. London’s congestion charge is well known but similar approaches have been adopted in Stockholm and Milan.
Increasing car parking charges has been shown to reduce driving in particular areas. In Amsterdam city centre a parking price increase of 65 per cent in 2019 led to demand for parking falling by around 17 per cent. This reduction in demand implies a 2-3 per cent reduction in traffic.59
Clean air zones are another application of road pricing. Here the focus is on reducing vehicle emissions rather than cutting traffic congestion and charges tend to be limited to a smaller number of non-compliant vehicles. London’s Ultra Low Emission Zone has attracted plenty of attention but clean air zones exist in various forms in other UK cities including Bath, Birmingham and Glasgow.
Road user charging is a more sophisticated approach. It charges drivers for use of specific sections of road and dynamic pricing reflects the distance travelled or specific route, time of day and vehicle type rather than applying a fixed fee. This approach typically raises more revenue than a flat-rate charge and can be used to control traffic flows in a city. Singapore has implemented such a policy, discussed in more detail in Case Study 9.
One challenge for all these approaches is their cost of implementation. In the UK London spent an initial £81 million to set up the congestion charge with a further £80 million needed for road traffic measures. This is important because there is not always a clear payback date. In London £115 million was raised in the first year of the congestion charge going live with £55 million of this coming from penalty fines on unpaid charges. However, as compliance increases, revenue falls. In the second year of the London congestion charge only £102 million was collected. Securing initial set up costs for similar initiatives may prove difficult without central government subsidy given that it is not clear how quickly this money can be recouped.
Introducing any form of road pricing can be politically difficult – as the experiences of Manchester and Bristol have shown – so it is important for city leaders to build and maintain public support for these policies. This could include awareness campaigns to make clear the purpose of a policy and highlight the negative impacts of congestion and air pollution, or tangible improvements to public transport that coincide with the introduction of road pricing policies. An example of this can be seen in the London case study below.
Another example can be seen in Ljubljana, Slovenia.60 As part of the city’s 2012-2020 ‘Sustainable Urban Mobility Plan’ (SUMP) the city centre has been closed to private traffic and deliveries are only allowed before midday. Mayor Zoran Janković chose to implement these controversial changes during his first year in office with the aim of allowing residents and critics of the policy to see the benefits before the next election. He has since been re-elected three times.
As a result of these policies and complementary improvements to public transport such as the introduction of smart ticketing, real-time travel information displays, new buses and five new park-and-ride facilities, the city experienced an 18.5 per cent increase in public transport use between 2010 and 2014.
Car ownership and parking measures
Workplace parking levy
Road pricing in the forms set out above does not cover stationary vehicles or directly discourage car ownership. Under a workplace parking levy car parking spaces in a city are licensed and a charge is payable to use them. Revenue from the levy is then used to fund public transport. Businesses with fewer than ten spaces are usually exempt to reduce the impact on small businesses and the administrative burden for councils.
One advantage of a workplace parking levy is that, unlike congestion charging or road user charging, it does not require significant up-front investment beyond creating a database of parking spaces. This makes it a cost-effective policy lever.
In the UK, Nottingham has pioneered the introduction of a workplace parking levy and, by demonstrating a feasible model, has given areas considering a similar approach a clear idea of the costs and risks involved. Case Study 7, below, discusses Nottingham’s approach in more detail. Sydney has had a workplace parking levy since 1993 but, unlike Nottingham, it has two different zones in which different charges apply. The Sydney scheme raises around AUS$100 million (£50 million) a year and this revenue has helped to fund light rail projects and new bus interchanges.
Financial start-up costs may be low but local politics can prove an obstacle to those hoping to introduce a workplace parking levy. For example, proposals in Bristol were abandoned because of opposition from business. While the charges imposed on drivers by a parking levy are tangible, the costs to society of congestion and pollution are much less so. Therefore, any plan to introduce such a policy will need to effectively communicate these intangible costs if it is to persuade communities why the introduction of a workplace parking levy is a step forward.
Case study 7: Nottingham’s workplace parking levy
The workplace parking levy in Nottingham was established in 2012 using powers contained within the Transport Act 2000. It took Nottingham City Council from 2000 to 2009 to get the workplace parking levy scheme order approved before charging commenced in 2012. It remains the only city in the UK to have implemented a workplace parking levy to date.
The cost per workplace parking place for 2023-2024 is £522 and is paid by employers who provide 11 or more spaces in the city.
Total set-up costs amounted to £1.8 million (funded by local and central government) and the scheme costs around £475,000 a year to run.61 It has achieved 99 per cent compliance from employers with about half of firms passing on the cost of providing spaces to employees.62
It is estimated that, as a result of the workplace parking levy, congestion growth in Nottingham has been cut by 47 per cent. By September 2021 a total of 7,840 tonnes of carbon dioxide emissions had been averted since the levy’s introduction. The levy has contributed to a 33 per cent fall in carbon emissions in Nottingham since 2005 and a further 350 tonnes of CO2 have been saved through the introduction of 15 electric buses, paid for by the levy.
In total £83 million of revenue was raised from the levy between 2012 and 2022.63 Some of this has been used to bid for other sources of match funding for transport investment in the city: for every £1 raised £3-4 of other funding has been secured.64 The Department for Transport matched £221 million of local funding (which included income from the workplace parking levy) with £432 million to enable the extension of the city’s tram network.
Parking policy – certificate of entitlement and ‘proof of parking’
Cities can also target stationary vehicles through measures such as changing the minimum and maximum number of parking spaces for new developments, controlling on-street parking, or restricting car sales. While these do not necessarily raise money they offer another tool for discouraging car usage.
The number of parking spaces in central Amsterdam has been reduced in recent years to make it more difficult to park and to put the land to other uses.65 Tokyo has a long history of regulating car ownership as Case Study 8 explores.
Case study 8: Parking policy in Tokyo, Japan
In 1962 Japan introduced its ‘shako shomei’ (proof of parking) policy that required anyone buying a car to prove that they owned or rented a parking space within two kilometres of their residence to local police.
The aim of the policy was to create and sustain a market for off-street parking. Given the lower availability of space in densely populated areas car owners pay more for parking in urban areas where land is expensive than in rural locations where land is more affordable. The policy also encourages people to choose smaller vehicles that fit a parking space on their own property; these cars have lower emissions than might otherwise be the case.
The policy is complemented by a ban on overnight parking in Tokyo which has been in force since 1957 with a penalty of approximately ¥200,000 (£1,090) payable by those found to have flouted the ban. On-street parking restrictions also mean that spaces can usually only be used for one hour. As a result, such on-street spaces are extremely rare – 95 per cent of Tokyo streets have no on-street parking.
This policy has contributed to lower car ownership in urban areas.66 While rural areas see higher rates of car ownership Japan has lower car ownership overall compared to its international peers (1.06 cars per household in Japan compared to 1.24 cars per household in the UK). Tokyo has the lowest across the country of 0.52 cars per household.
The context for this policy is important. First, Japan’s cities have been built at densities much higher than large UK cities. Traditional street layouts are narrow and land ownership is fragmented; this did not change significantly even during post-war reconstruction. Around 35 per cent of Japanese streets are not wide enough for a car to pass and 86 per cent are not wide enough for a car to stop without blocking the traffic behind it.67 Second, the cost of owning a car is high due to an annual automobile tax, purchase tax and bi-annual inspections, similar to an MOT, costing around ¥100,000 (£550). Other motoring costs are high relative to other countries. For example, Motorway tolls in Japan are approximately three times higher than those in France.
The table below shows the population density and number of cars per household for the three largest UK and Japanese cities. Dense development around stations has been encouraged by Japan’s zoning system and by rail companies which also act as property developers, creating urban areas where high numbers of people live close to stations.68 These factors, along with an integrated ticketing system that allows seamless travel between different operators and modes, shift the balance of benefits between using public and private transport.
Table 1: Density and car ownership in selected Japanese and UK cities
| Japanese or UK city | Population density/km2 (Japanese data 2022, UK data 2021)69 | Cars per household (Japanese data 2022, UK data 2021) |
| Tokyo | 14,449 | 0.4 |
| Osaka | 9,995 | 0.4 |
| Yokohama | 4,473 | 0.6 |
| London | 5,596 | 0.8 |
| Manchester | 2,105 | 0.7 |
| Birmingham | 3,649 | 0.9 |
Singapore is an example of a city that has effectively combined both measures to discourage ownership with road pricing.
Case study 9: Road pricing and vehicle certificates, Singapore
Singapore is an extremely dense city-state and has long recognised the need to control car ownership, implementing measures to discourage car travel since the early 1970s. This includes Electronic Road Pricing (ERP) and a series of earlier road pricing policies.
The 1975 Area Licensing Scheme (ALS) required drivers to purchase a licence to enter the city centre at particular times of day. The scheme resulted in an initial drop in car numbers of 44 per cent, falling to 31 per cent by 1988. This overall fall was despite a 77 per cent increase in the number of vehicles in Singapore and employment growth of one third during the same period.
In 1995 the city also introduced a ‘Road Pricing Scheme’ (RPS) on one expressway. This resulted in traffic volume decreasing from 12,400 vehicles in May 1995 to 7,300 vehicles in August 1995 during the restricted hours. Travel speeds increased from an average of 29kph to 64kph on the expressway.
These two policies succeeded in reducing congestion, raising speeds and promoting modal shift. The share of journeys made by public transport increased from 33 per cent before the ALS to 69 per cent after the introduction of the RPS.
The schemes were also cost effective. Revenue from the sale of ALS licences totalled s$47 million (around £61 million at today’s prices) in 1993 while capital costs in 1989 were just s$1.7 million (around £3 million today). The policies did, however, displace congestion to peripheral roads and to times just outside of the ALS operating hours.
Electronic Road Pricing (ERP) was introduced in 1998 as the successor to the two earlier policies. It was intended to simplify the types and cost of licences available under the ALS and RPS, to reduce the costs of operating these manual systems, and to optimise road usage through more precise traffic control.
Under the ERP system vehicles are fitted with unique ‘in-vehicle units’. Debit cards inserted into the units are automatically charged when a vehicle enters the charging zone.
The cost of introducing ERP has been estimated at s$200 million (£215 million at today’s prices), half of which was used to buy and install about 1.1 million in-vehicle units. This is less than s$300 per vehicle (£258 today) based on the number of vehicles in the city at the time.
ERP charges vary according to time of day, vehicle size and specific route to ensure optimum road usage. Charges are reviewed at three monthly intervals and remain fixed for three month periods. Pricing increases or decreases depend on detected average speeds during a given half hour. For example, prices will be increased when a road becomes more congested and average speeds decrease in an attempt to reduce traffic on that route.
Public awareness campaigns ran for more than a year before the ERP was introduced and the cost of the in-vehicle unit installation was met by the government. This clear communication and removal of any financial burden on the individual were important success factors. The use of ERP revenue to improve public and non-motorised transport has helped ensure support for the charging scheme.
Traffic volume in the central area of Singapore reduced by 10-15 per cent following the introduction of ERP in 1998.70 There were 25,000 fewer vehicles in peak hours and average speeds went up by 20 per cent. Bus travel and car-pooling also increased.71
By the early 2000s, nearly 300,000 daily transactions were generating daily revenue of about £630,000 at today’s prices, suggesting annual revenues of more than £230 million.72
ERP brought in about s$150m (£157 million at today’s prices) a year in the early 2010s. This is about 20 per cent less than ALS revenue in the early 2000s due to lower ERP charges compared to ALS. This makes up around 10 per cent of the local transport authority’s income, significantly higher than the 4 per cent raised by the congestion charge for Transport for London in 2019.73
Singapore’s ERP is primarily designed to optimise road usage and reduce congestion; it raises minimal revenue compared to some of the city-state’s other restrictions on car use. These include the ‘Certificate of Entitlement’ – a 10-year car ownership permit purchased by auction. There are a fixed number of permits available in order to cap the net increase in vehicle ownership at 3 per cent per year.74
In August 2023, the average cost of a Certificate of Entitlement for cars up to 1600cc was £60,000 (for a ten year permit) and higher for cars with larger engines.75 Concessions are available for ‘greener’ vehicles. In 2021 revenue from all vehicles, Certificates of Entitlement and vehicular excise duty amounted to s$5.78 billion (£4.1 billion at today’s prices).76