Are bus fares fair? Not when zero-hours workers pay a huge poverty premium

busesEVERYONE wants to tackle inequality, don’t they? Our politicians are never done talking about it, whether in vague, aspirational terms or in the language of pilot schemes and action zones. Yet they seem a little less keen to pinpoint areas where some consumers get a sweet deal and others a raw one, and take action to close the gap.

Bus fares in Glasgow went up this week, after not so much a blaze of publicity as a spark from a damp match. Doubtless many passengers were caught out; “exact fare only” is a right old swizz when you’ve only got last week’s exact fare in small change.

With in-work poverty high on the agenda, why is no-one starting a conversation about getting-to-work poverty?

However, season ticket holders will have been pleasantly surprised to find their fares frozen or reduced, in some cases by as much as £1.50 a week. They probably won’t be pausing to ask who is paying the price. But with in-work poverty high on the agenda, why is no-one starting a conversation about getting-to-work poverty? When the National Minimum Wage for twentysomethings starts at just £5.30, how can it be right that a standard return bus journey of just a few miles costs £3.20 in Edinburgh, £4 in Aberdeen and £4.30 in Glasgow?

When researchers talk about the poverty premium, they’re referring to the difference in the price paid by the best-off and the worst-off for the same product or service. The most commonly referenced examples are the extra costs associated with pre-payment gas and electricity meters and the sky-high rates for consumer credit such as payday loans. The problem here isn’t that those in poverty are somehow too dim to grasp that these options are more expensive, as those benefiting from the best deals might prefer to assume. It’s that they have fewer options as a result of their circumstances.

If you don’t know where your next wage is coming from, can you be confident about setting up Direct Debits?

No savings, no bank account, no internet access and a poor credit rating are all factors that restrict access to the best prices, tariffs and interest rates. But another significant factor is job insecurity – if you don’t know where your next wage is coming from, can you be confident about setting up Direct Debits, or paying upfront for a service that you can afford now but might have to give up in a few months’ time?

Transport costs tend not to be factored in to the headline figures about the poverty premium – which is taken to be about 10 per cent – despite the fact that they represent a significant outgoing for those on modest wages, and for young people in particular. The difficulty here is that while those with cars can access the cheapest offers – a supermarket three-for-two here, an Ikea sale purchase there – the costs of running your own vehicle add up. Remove this from the equation and look purely at costs per bus journey, and huge differentials appear.

Of course everyone knows that season tickets are cheaper than singles, but the difference in price between daily, weekly and annual fares varies dramatically across the country. Let’s assume our passenger, zero-hours worker Bussy McBusface, potentially needs to make a return journey five days a week. But not definitely, because the rota changes week to week and sometimes she’s only put down for three or four shifts. And depending on when her line manager texts her, she might not know on Monday whether she’s working on Friday.

If Ms McBusface lives in Edinburgh, where municipally owned Lothian Buses dominates, she would be better off buying 10 single tickets per week at £1.60 than paying upfront for a week-long Ridacard, even if her five shifts a week were guaranteed (and assuming she wasn’t planning any recreational bus travel). But if she was in the position to buy a year-long Ridacard (ie, if she was confident she’d be making this journey five days a week for 44 of the next 52 weeks, and could set up a Direct Debit) the cost per week would be £13.60 a week compared to £16, a difference of 18 per cent.

In Aberdeen, where First dominates, there’s no flat fare and a mid-range single ticket costs a whopping £2.60. Here, Ms McBusface could spend £20 per week on £4 day tickets or £18 for a week-long ticket, but an annual ticket would bring her weekly transport cost down to £15 a week – making for a poverty premium of 11 per cent compared with weekly tickets, or 33 per cent compared with day tickets.

In Glasgow, our zero-hours traveller really pays the price for her insecure employment, and would do well to carefully scrutinise the full set of revised fares

In Glasgow, our zero-hours traveller really pays the price for her insecure employment, and would do well to carefully scrutinise the full set of revised fares to ensure she isn’t clobbered with extra expense. If she has to hedge her bets at the start of a given week, she need not pay the full fare of £2.15 each way as a Flexi 10 reduces these journeys to £1.90 each (assuming she has £19 in her purse on day one). And weekly tickets have been reduced to £15.50, meaning further savings if she can be sure she’ll make the most of one. But an annual ticket – rumoured to be available from First’s depot in the city, though certainly not widely advertised – brings the weekly cost down to a mere £10.20. This means that in Glasgow, where the problem of inequality has vexed social scientists for decades, the poverty premium for the savviest bus passengers is 52 per cent compared with weekly tickets and a whopping 86 per cent compared with cut-price singles.

Some may argue that the gulf between these costs is not something for meddling politicians and policy-makers to concern themselves with, and that passengers paying up front is crucial to the business models of transport firms. But with interest rates on savings at rock bottom, do these passengers really need savings incentives worth hundreds of pounds? And, is it right that a low-income young worker – already paid less than an older colleague for doing the same job – pays almost twice as much to get to work as a well-heeled commuter who also benefits in may other ways from the security of having a permanent contract?

It’s perhaps no coincidence that the gap between single and annual ticket prices is smallest in the city where buses have remained in public ownership

It’s perhaps no coincidence that the gap between single and annual ticket prices is smallest in the city where buses have remained in public ownership. Until recently Edinburgh’s flat-rate single fare matched that of London, which notably avoided deregulation in the 1980s and subsequently saw bus passenger numbers double. The beauty of London’s system is that £1.50 gets you wherever you need to go, and passengers don’t need to be fortune-tellers to get the best deals. There are no cash fares, and daily and weekly caps kick in automatically when you use a Oyster or contactless payment card.

This summer’s roll-out of smart tickets across the Scotrail network is a step in the right direction, but it will only apply to season tickets and as yet there’s no timescale for making buses smart, despite broad ambitions to join up transport services across the country. The task of leaning on operators to make fares fairer and simpler should not be postponed until the smart revolution arrives. If our politicians are happy to wait, it will be hard not to conclude that they really don’t mind the gap.

A version of this article first appeared in The Herald.

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