Fare evasion is a major international problem in all cities. In Melbourne prior to the start of this study fare evasion represented 12% of trips and a revenue loss of $Aust. 79.3M p.a. (2011-12). This project aimed to understand the psychology behind fare evasion in Melbourne to provide actionable recommendations to improve fare compliance.
The study included an international review of practice and the published research literature on revenue protection, fare evasion behaviours and the psychological aspects of ‘consumer misbehaviour’ research sourced from the retailing industry. A conceptual model to understand fare evasion behaviours was developed from this research based around the theory of planned behaviour, which included concepts of consumer misbehaviour research.
Primary surveys then followed aimed at exploring the validity of this model. A series of qualitative studies were undertaken using anonymous on-line discussion groups and also focus groups with public transport users including those who self-report fare evasion. These were followed up with a large quantitative on-line survey of a range of passenger groups exploring the frequency of travelling without valid tickets and also factors which influence this. Results were used to develop statistically reliable models explaining fare evasion behaviours for deliberate and unintentional fare evasion. Key drivers of deliberate fare evasion were levels of honesty, the perceived ease of fare evasion and permissive attitudes to fare evasion.
There were a number of other major breakthroughs in this research. Firstly it was established that most revenue loss was from a small group of ‘recidivist’ fare evaders who almost always fare evade. In Melbourne $54M p.a. (68%) of revenue loss from fare evasion comes from only 65,400 people who deliberately and always fare evade. That’s a cost per person of $Aust 826 p.a. In contrast accidental or unintentional fare evasion represents a revenue loss of only $Aust 4M p.a. and occurs for 580,000 people (14.5% of all Melbourne residents) who only fare evade once by accident (a revenue loss per person of $6.90 per person p.a.). Policy recommendations suggested targeting recidivists.
In addition the project established an elasticity of fare evasion rates with the percentage of tickets checked of -0.5; this means doubling ticket checking rates will halve fare evasion rates.
The client, PTV, used the research to develop the ‘free loader’ marketing program which highlighted the problem of recidivists. In addition “plain clothed” ticket inspectors were introduced and targeted to locations/groups of recidivist users identified in the research. Ticket checking rates were also increased in line with our findings on their impacts on fare evasion.
Impacts of these initiatives have been impressive; in May 2015 PTV reported the lowest fare evasion rates they have ever measured at 5% of trips. This represents a considerable reduction from the 12% reported before the research was undertaken including a notional saving of revenue loss of some $Aust 50M p.a. recurrent. This research project is probably the most financially effective and profitable project we have ever undertaken for a research client.
Follow up research undertaken by PTRG in London, Paris, Toronto, New York, Boston, Sydney, Brisbane and Perth identified that all these cities had the same problem of recidivism as that identified in Melbourne. This appears to be an endemic international problem in all cities but it not well understood or targeted in current policy. Policy makers in Sydney were consulted about the PTRG research findings and used these to optimise their revenue protection approach; they have informed PTRG this advice resulted in annual savings of $Aust 60M.