INFORMATION NOTE. A comparison of incentive schemes offered to frequent users of railway services in selected cities
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1 INFORMATION NOTE A comparison of incentive schemes offered to frequent users of railway services in selected cities 1. Background 1.1 At the meeting held on 16 November 2012, the Panel on Transport requested the Research Office to conduct a study on the comparison of the monthly travel pass scheme of the MTR Corporation Limited ("MTRCL") with similar incentive scheme provided in Berlin, London, New York, Tokyo and Guangzhou. This information note studies the five selected cities and Hong Kong in terms of the background of their mass transit railway operator(s) and the travel passes or other incentive schemes they offer to frequent travellers. It concludes with a highlight of the salient features of various schemes studied to facilitate Members' deliberations on how to improve the monthly travel pass scheme currently offered by MTRCL. 2. Berlin 2.1 In Berlin, the public transport network is operated by the Berliner Verkehrsbetriebe ("BVG"), which is a public body fully owned by the State of Berlin. BVG operates an urban rapid transit rail system known as the U-Bahn, as well as the bus, tram and ferry networks in the city. 2.2 BVG offers public transport travel passes to its frequent travellers 1. These passes are available as monthly pass, 10 a.m. monthly pass and annual pass 2, and the prices of which vary with the number of zones covered in the pass While there are concessionary travel passes offered to specific groups of passengers such as students, retired seniors and disabled people in the places studied, this information note only covers those available to frequent travellers. Some of the places studied in this information note offer both short period (e.g. one-day and/or one-week) and long period (e.g. monthly, quarterly and/or annual) travel passes to meet the different needs of their passengers. This information note limits the study to long period travel passes for a meaningful comparison with the monthly passes offered by MTRCL in Hong Kong. BVG divides its transit rail service areas into a number of zones. A passenger has to pay more for purchasing a travel pass with more zones covered. Research Office page 1
2 Monthly pass 2.3 Berlin is divided into three zones: A, B and C. 4 Monthly passes are valid for two or three zones (e.g. A and B, or A, B and C). The price of a monthly pass for Zones ABC is 95 (HK$947.2) 5, compared with 77 (HK$767.7) for Zones AB and 78 (HK$777.7) for Zones BC. 2.4 Passengers can purchase a monthly pass from BVG which is valid: (a) for a calendar month, i.e. valid from midnight at the start of the last calendar day of the previous month until midnight at the end of the first calendar day of the following month; or (b) from any date, i.e. valid from midnight at the start of the first day of validity printed on the pass until midnight at the end of the last day of validity printed on the pass. 2.5 BVG's monthly pass is transferable and the pass holders are entitled to travel with one adult and up to three children aged six to 14 free of charge on Mondays to Fridays from 8 p.m., and all day on Saturdays, Sundays and public holidays. The provision for free accompanying travellers ends at 3 a.m. on the following day, unless that date is a Saturday, Sunday or public holiday. 10 a.m. monthly pass 2.6 BVG offers 10 a.m. monthly pass 6 targeting at people who travel within city area zones on Mondays to Fridays from 10 a.m. until 3 a.m. on the following day, and all day long on Saturdays, Sundays and public holidays. The transferable 10 a.m. monthly pass is only issued for a calendar month. The 10 a.m. monthly pass for all the three zones in Berlin costs 68 (HK$677.9), equivalent to about 72% of the price of a monthly pass that can be used throughout the day. 4 Zone A is Berlin's inner city up to and including the urban rail ring, whereas Zone B is outside the urban rail ring up to the city boundary. For Zone C, it covers Greater Berlin (i.e. the area approximately 15 km around the State of Berlin.) 5 Based on the average rate of HK$9.97 per euro in It is considered as a kind of off-peak discount in transport economics. Research Office page 2
3 Annual pass 2.7 Travellers opting for a bigger price discount can acquire a longer period travel pass the annual pass from BVG. An annual pass for Zones ABC costs 895 (HK$8,923.2), 22% less than purchasing 12 monthly passes for a whole year. 7 The annual pass holders enjoy the same benefits as stated in paragraph London 3.1 The Transport for London ("TfL") is responsible for the planning, delivery and day-to-day operation of the public transport system in London, which includes London Underground, the Docklands Light Railway, London Overground, London Tramlink and London River Services. 8 TfL is a statutory body created by the Greater London Authority Act 1999 to implement the transport strategy issued by the Mayor of London and manage transport services across London. It is overseen by a Board whose members are appointed by the Mayor of London for their understanding of transport matters. 3.2 TfL offers both monthly and annual zonal passes Travelcard for London Underground, the Docklands Light Railway and London Overground services 9, which are priced according to the number of zones covered in the pass. Monthly and annual zonal passes 3.3 Travelcard holders can enjoy unlimited number of journeys within the zones covered in the pass during the validity period. The annual passes for Zones 1-2, Zones 1-4 and Zones are priced at 1,216 (HK$14,956.8) 11, 1,744 (HK$21,451.2) and 2,224 (HK$27,355.2) respectively, which are cheaper than purchasing 12 monthly passes for a whole year The total cost is 1,140 (i.e. 95 x 12) or HK$11, TfL also runs Victoria Coach Station, London Transport Museum and the Emirates Air Line. The latter, opened in July 2012, is a cable car link across the River Thames in London built with sponsorship from the airline Emirates. There is a separate travel pass for bus and tram services. The London public transport system is divided up into zones that radiate from the centre. There are six concentric zones with Zones 1 and 2 in Central London and Zone 6 covering the outer edge of London. Based on the average rate of HK$12.3 per British pound in For example, the price of an annual pass for Zones 1-6 is 13% less than purchasing 12 monthly passes each at (HK$2,627.3) for a whole year. Research Office page 3
4 4. New York 4.1 The Metropolitan Transportation Authority ("MTA") is a public-benefit corporation 13 chartered by the New York State Legislature in 1965 to manage the public transportation system in New York. MTA provides mass transit railway, local and express bus, and regional rail services in Greater New York 14, and operates multiple toll bridges and tunnels in New York City. Its operation is governed by a 17-member Board. 30-day unlimited ride pass 4.2 MTA offers 30-day pass 15 allowing unlimited subway and local bus rides until midnight for 30 days from the day of first use. The price of a 30-day unlimited pass is US$112 (HK$869) Tokyo 5.1 Tokyo has two rapid railway transit systems, namely Toei Subway (" 都 營 地 下 鐵 ") and Tokyo Metro (" 東 京 地 下 鐵 "). Toei Subway is operated and solely owned by the Tokyo Metropolitan Bureau of Transportation which is Tokyo's public transportation authority. It operates four subway lines and manages more than one hundred stations on its network. Another operator, Tokyo Metro, is run by the Tokyo Metro Company Limited. The latter is jointly owned by the Japanese government and the Tokyo Metropolitan Government. Tokyo Metro has more than 160 stations on nine subway lines A public-benefit corporation is a public corporation chartered by a state designed to perform specific functions for the benefit of the public. Greater New York refers to New York City and its surrounding counties. In addition to the 30-day unlimited ride pass covering the whole New York City, MTA provides monthly passes for the Long Island Rail Road and the Metro-North Railroad allowing unlimited rides during the calendar month indicated on the pass. The Long Island Rail Road is a commuter rail system serving Long Island, whereas the Metro-North Commuter Railroad is a sub-urban commuter rail service. The price of a Long Island Rail Road monthly pass depends on the number of zones covered, while that of a Metro-North Railroad monthly pass varies with the distance travelled. Based on the average rate of HK$7.76 per US dollar in Research Office page 4
5 5.2 Toei Subway has not offered any long period travel pass. 17 In contrast, passengers can purchase two types of longer period travel pass from Tokyo Metro, namely (a) Tokyo Metro All-line Pass covering the whole Tokyo Metro network, and (b) Commuter Railway Pass good for stations along the route specified in the pass. Tokyo Metro All-line Pass 5.3 Tokyo Metro All-line pass allows unlimited rides on all Tokyo Metro lines. Passengers can purchase one-month pass for 16,820 yen (HK$1, ), three-month pass for 47,940 yen (HK$4,650.2), and six-month pass for 90,830 yen (HK$8,810.5). Commuter Railway Pass 5.4 Commuters travelling frequent between home and office can purchase Commuter Railway Pass which allows unlimited rides between stations on the route specified by them. One, three and six-month passes are available to passengers. The cost of these monthly pass depends on the distance of the route travelled. Additional fare will be charged when travelling outside the route specified in the pass. 6. Guangzhou 6.1 The Guangzhou Municipal Government established the Guangzhou Metro Corporation in December 1992 to operate the Guangzhou Metro (" 广 州 地 鉄 "). There are currently a total of eight lines in operation Instead, the Tokyo Metropolitan Bureau of Transportation offers three types of one-day pass: (a) Toei one-day economy pass for unlimited use of Toei subways, buses, streetcar and the Nippori-Toneri Liner, (b) Tokyo one-day free pass for unlimited use of Toei subways, buses, streetcar and the Nippori-Toneri Liner, as well as Tokyo Metro and JR East trains within Tokyo's city area, and (c) Toei Subway and Tokyo Metro Lines Common one-day economy pass for unlimited use of Toei subways and Tokyo Metro Lines. Based on the average rate of HK$0.097 per Japanese yen in Research Office page 5
6 Monthly pass 6.2 Guangzhou used to provide fare discounts to frequent travellers via the travel pass scheme. Three types of monthly pass were offered to passengers of the Guangzhou Metro: (a) a monthly pass of 55 (HK$ ) for 20 single journeys, (b) a monthly pass of 88 (HK$108.2) for 35 single journeys, and (c) a monthly pass of 115 (HK$141.5) for 50 single journeys. Each journey could travel from one station to any other station regardless of distance. A monthly pass was valid within a calendar month only. 6.3 In May 2010, a new arrangement came into effect to replace the monthly pass scheme by the use of Yang Cheng Tong 20 (" 羊 城 通 ") for public transport services. Card holders can use Yang Cheng Tong to take metro and/or bus rides. They can get a 5% off the regular fare for the first 15 trips in a month and a 40% discount from the 16 th trip onwards. According to the Guangzhou Municipal Government, the new scheme offers bigger discount and benefits more people. 7. Hong Kong 7.1 The operator of mass transit railway services in Hong Kong is MTRCL. It was originally established in 1975 as the Mass Transit Railway Corporation with a mission to construct and operate an urban metro system in Hong Kong. Its sole shareholder was the Government. The Company was re-established as MTRCL in June 2000 after the Government sold 23% of its issued share capital to private investors in an Initial Public Offering. MTRCL shares were listed on the Stock Exchange of Hong Kong in October MTRCL was merged with the Kowloon-Canton Railway Corporation, a Government-owned rail operator, in December After the merger, MTRCL operates a rail network comprising nine railway lines, a Light Rail network and a fleet of buses providing feeder services Based on the average rate of HK$1.23 per Chinese Renminbi in It is a contactless smart card which can be used on the metro and most other forms of public transport in Guangzhou. Research Office page 6
7 7.3 The management of the MTRCL is overseen by a chief executive officer and an executive committee. They report to a Board headed by a non-executive chairman and made up of local business and community leaders and government representatives. Mass transit railway passes 7.4 As shown in the Table below, MTRCL currently offers four kinds of monthly pass to passengers for unlimited travel on designated rail routes and free feeder bus services on certain routes in a calendar month. 21 The validity period and coverage of the monthly pass are encoded on the Octopus cards of pass holder. If a monthly pass holder takes rides outside the areas specified in the pass, an extra fare will be deducted from his or her Octopus card. Table Monthly passes offered by MTRCL Monthly pass Travel validity Price Sheung Shui - East Tsim Sha Tsui Tuen Mun - Nam Cheong East Rail Line Standard Class (except for Lo Wu, Lok Ma Chau and Racecourse stations), Ma On Shan Line and East Tsim Sha Tsui Station West Rail Line (between Tuen Mun and Nam Cheong stations) and Light Rail HK$420 (1)(2) HK$440 (1)(2) Tuen Mun - Hung Hom West Rail Line and Light Rail HK$515 (1)(2) Tung Chung - Hong Kong Tung Chung Line and Central Station HK$550 (3) Notes: (1) The above price schedule, which came into effect on 17 June 2012, does not apply to holders of the following monthly passes at discounted prices: (a) the HK$345 Sheung Shui-East Tsim Sha Tsui monthly pass, (b) the HK$345 Tuen Mun-Nam Cheong monthly pass, and (c) the HK$430 Tuen Mun-Hung Hom monthly pass. They can continue to enjoy the discounted prices each month by using the same Octopus card between July 2012 and June (2) As part of the fare promotions package for , passengers received a HK$20 MTR Shops cash coupon for every purchase of the monthly pass between July and December (3) As part of the fare promotions package for , passengers received a HK$20 MTR Shops cash coupon for every purchase of the Tung Chung-Hong Kong monthly pass from October 2012 to March Source: MTRCL. 21 In addition to the monthly passes, MTRCL has recently offered a number of fare promotions and concessions. These include: (a) "Ride 10 Get 1 Free" between 18 June and 30 December 2012, (b) a 10% discount for same-day second trips between 31 December 2012 and 30 June 2013, and (c) free child travel on weekends and public holidays between 28 July and 30 December Research Office page 7
8 7.5 As for the rationale and factors being considered when determining the fare of individual monthly passes, MTRCL has stated that monthly pass is introduced mainly for passengers who live in remote districts and take MTR frequently, as well as for those passengers always taking designated railway lines. In considering the extension of the monthly pass concessionary schemes or introduction of a new monthly pass concessionary scheme, MTRCL will take into account a basket of factors, including market situation, the existing patronage, expected additional growth in patronage after the launch of the monthly pass, as well as the competitiveness of MTR in the respective routes. 22 Enhancing the mass transit railway monthly passes 7.6 In recent years, Members 23 and the general public alike have expressed concerns that the society cannot benefit from the rail line-based monthly passes offered by MTRCL. In particular, most members of the public are unable to reduce their travelling expenses through the use of monthly passes. As such, they have urged MTRCL to enhance the existing monthly travel pass schemes by: (a) implementing a reasonably-priced territory-wide monthly pass scheme for all MTR lines, benefitting both long-haul passengers living in remote districts and short-haul passengers taking trips in urban areas. Such arrangement can address the needs of different passenger groups; (b) reviewing the pricing method of monthly passes in the context that the price of individual passes should be based on the number of zones covered or the distance travelled; (c) extending the monthly passes to other remote districts or areas which mainly rely on the railway for access, such as Tseung Kwan O, so as to benefit more members of the public who often need to travel on MTR; Information based on the reply from MTRCL dated 22 January The Council and the Panel on Transport have discussed the issue related to the mass transit railway monthly passes on a number of occasions over the past two years. For example, the issue was deliberated at the Council meetings of 2 November 2011, 24 October 2012, 31 October 2012, and 5-6 December 2012, as well as at the Panel meetings held on 12 April 2012, 7 May 2012, 27 June 2012 and 30 October Research Office page 8
9 (d) offering long period travel passes (e.g. quarterly, six-month and/or annual passes) with attractive discounts to passengers, thereby alleviating the burden of travelling expenses on frequent travellers and allowing them to have more choices; and (e) considering to adopt a new approach of providing fare discounts to passengers (i.e. volume-based discount). Passengers who have taken a certain number of rides in a month may enjoy a discounted fare. 8. Salient features of incentive schemes studied 8.1 Salient features of various travel incentive schemes studied are highlighted below to facilitate Members' deliberations on how to improve the monthly pass schemes currently provided by MTRCL: (a) the mass transit railway operator in Hong Kong is the only case in this study which is a publicly listed company with a mission to operate under prudent commercial principles. In contrast, the mass transit railway operators in other places studied are owned and managed by either the government or public corporation. They are more likely to be expected to operate public transport services as a social service for the benefits of the community. As a result, they may be subject to greater public pressures of introducing more flexible and concessionary travel schemes for frequent travellers; (b) Berlin, London and New York offer travel passes covering all city area zones. In contrast, Hong Kong's monthly passes only covers specified routes of its mass transit railway lines; (c) Berlin, London and Tokyo offer either zonal or distance-based travel passes to suit the different needs of short-haul and long-haul travellers. The price of a travel pass depends on the number of zones covered or the distance travelled. However, there are only four types of monthly pass available in Hong Kong. They mainly target at long-haul commuters, particularly those travelling frequently between the new towns and the urban areas; Research Office page 9
10 (d) Berlin is the only city covered in this study that provides off-peak discount to passengers. Its public transport operator offers 10 a.m. monthly pass targeting at people who travel within city area zones; (e) Berlin, London and Tokyo offer long period travel passes (e.g. quarterly, six-month and/or annual passes) to their passengers, who can save more if longer period travel passes are purchased; and (f) Guangzhou stands in contrast to other cities studied for not offering any travel monthly pass to the frequent travellers. Instead, it issues Yang Cheng Tong as a rechargeable stored value smart card allowing the card holders to ride all major transportations (including metro and bus) without using cash. They can get fare discount for using the card to take metro and bus rides and the magnitude of which depends on the number of journeys travelled in a month. Table Salient features of individual incentive schemes studied Nature of operator Travel passes covering all city area Zonal or distance-based travel passes Long period travel passes Off-peak discount travel pass Berlin London New Hong York Tokyo Guangzhou (1) Kong Government department or public corporation Listed company X Not applicable X X Not applicable X (2) X Not applicable X X X X Not applicable X Volume-based X X X X X fare discount Notes: (1) Guangzhou does not offer any travel monthly pass to the frequent travellers. Instead, they can get discount off the regular fare and the magnitude of the discount depends on the number of trips they take. (2) Hong Kong's MTRCL only offers rail line-based monthly passes. Research Office page 10
11 References Berlin 1. Berliner Verkehrsbetriebe (BVG). (2012a) The Company: About us. Available from: html 2. Berliner Verkehrsbetriebe (BVG). (2012b) Tickets & Fares: Berlin fare zones A, B, and C. Available from: 3. Berliner Verkehrsbetriebe (BVG). (2012c) Tickets & Fares: Fares Overview Weekly, Monthly, Monthly and Annual Tickets VBB Eco Ticket Monthly Ticket. Available from: 4. Berliner Verkehrsbetriebe (BVG). (2012d) Tickets & Fares: Fares Overview Weekly, Monthly, Monthly and Annual Tickets VBB Eco Ticket Annual Ticket. Available from: 5. Berliner Verkehrsbetriebe (BVG). (2012e) Tickets & Fares: Fares Overview Weekly, Monthly, Monthly and Annual Tickets VBB Eco Ticket 10 a.m. Monthly Ticket. Available from: London 6. London.com. (2012) London Underground. Available from: 7. The London Toolkit. (2012a) London Oyster Card. Available from: [Accessed March 2013]. Research Office page 11
12 8. The London Toolkit. (2012b) London Travelcard Public Transport Pass. Available from: 9. Transport for London. (2012a) Getting around with Oyster. Available from: Transport for London. (2012b) Tickets. Available from: Transport for London. (2012c) Tickets: Discounts for adults: Freedom Pass. Available from: [Accessed March 2013]. 12. Transport for London. (2012d) Tickets: Fares 2013: Tube, DLR and London Overground. Available from: Transport for London. (2012e) Transport for London: Factsheet. Available from: ACTSHEET_ pdf 14. Transport for London. (2012f) Tube: London Underground. Available from: New York 15. Metropolitan Transportation Authority. (2010) Long Island Railway Road: Fares & Ticket Information: New Fares Effective December 30, Available from: Metropolitan Transportation Authority. (2012a) Available from: Metropolitan Transportation Authority. (2012b) Long Island Railway Road: Fares & Ticket Information. Available from: Research Office page 12
13 18. Metropolitan Transportation Authority. (2012c) Long Island Railway Road: Schedules & Fares. Available from: [Accessed March 2013]. 19. Metropolitan Transportation Authority. (2012d) Metrocard: Fares & MetroCard. Available from: m 20. Metropolitan Transportation Authority. (2012e) The MTA Network. Available from: [Accessed March 2013]. 21. The New York Pass. (2012) Public Transportation in New York City New York Metro Card. Available from: [Accessed March 2013]. Tokyo 22. East Japan Railway Company. (2012) Fares & Passes: Ticketing. Available from: Toei Transportation Information. (2011) Services: Toei Subways: Ticket Types. Available from: b_ticket.html 24. Tokyo Metro. (2012a) Company Information: Company Outline. Available from: dex.html 25. Tokyo Metro. (2012b) Corporate Executive Officers and Auditors. Available from: dex.html 26. Tokyo Metro. (2012c) Fares/Tickets/Passes: All Tickets: Passes: Metro Pass Offices & Pass Inquiry. Available from: Research Office page 13
14 27. Tokyo Metro. (2012d) Fares/Tickets/Passes: Passes. Available from: [Accessed March 2013]. 28. Tokyo Metro. (2012e) Tokyo Metro Guide. Available from: _guide.pdf Guangzhou 29. Guangzhou Metro. (2005a) Corporate Overview. Available from: Guangzhou Metro. (2005b) Passenger Services. Available from: Travel China Guide. (2012) Guangzhou Transportation By Subway. Available from: guangzhou/subway/ 32. 中 國 廣 州 政 府 : 關 於 保 留 地 鐵 新 月 票 制 度 的 建 議, 2010 年, 網 址 : [ 於 2013 年 3 月 登 入 ] 33. 羊 城 通 : 最 新 信 息 公 交 地 鐵 票 務 新 優 惠 指 南, 2010 年, 網 址 : [ 於 2013 年 3 月 登 入 ] 34. 南 方 報 網 : 廣 州 地 鐵 限 次 月 票 今 取 消 與 公 交 合 計 次 數 優 惠, 2010 年, 網 址 : [ 於 2013 年 3 月 登 入 ] 35. 廣 州 地 鐵 : 廣 州 地 鐵 新 生 活 幹 線,2007 年, 網 址 : [ 於 2013 年 3 月 登 入 ] Research Office page 14
15 Hong Kong 36. GovHK. (2009) Press Releases: LCQ19: Day pass and monthly pass concessionary schemes offered by the MTR Corporation Limited. Available from: htm 37. Legislative Council Secretariat. (2011) Background brief on adjustment to MTR fares and request for review of the MTR Corporation Limited's Fare Adjustment Mechanism. LC Paper No. CB(1)1841/ Legislative Council Secretariat. (2012) Updated background brief on adjustment to MTR fares and the Fare Adjustment Mechanism of the MTR Corporation Limited. LC Paper No. CB(1)1488/11-12(05). 39. MTR Corporation. (2009) MTR > What's More: Day Pass * Monthly Pass. Available from: _day_pass.html 40. MTR Corporation. (2011a) Business Overview: Corporate Profile. Available from: MTR Corporation. (2011b) Fares & Tickets: Train Services. Available from: MTR Corporation. (2012a) Adjustment to MTR Fares in Paper submitted to the Panel on Transport of the Legislative Council for discussion on 12 April LC Paper No. CB(1)1488/11-12(04). 43. MTR Corporation. (2012b) Monthly Day Pass. Available from: Official Record of Proceedings of the Legislative Council. (2012) 30 May. 45. Transport and Housing Bureau. (2012a) Adjustment to MTR Fares in 2012 and Fare Adjustment Mechanism of MTR Corporation Limited. Paper submitted to the Panel on Transport of the Legislative Council for discussion on 12 April LC Paper No. CB(1)1488/11-12(03). Research Office page 15
16 46. Transport and Housing Bureau. (2012b) Review of Adjustment Mechanism of MTR Corporation Limited. Paper submitted to the Panel on Transport of the Legislative Council for discussion on 30 October LC Paper No. CB(1)66/12-13(02) (Revised). Prepared by Jackie WU 17 April 2013 Tel: Information notes are compiled for Members and Committees of the Legislative Council. They are not legal or other professional advice and shall not be relied on as such. Information notes are subject to copyright owned by the Legislative Council Commission (the Commission). The Commission permits accurate reproduction of information notes for non-commercial use in a manner not adversely affecting the Legislative Council, provided that acknowledgement is made stating the Research Office of the Legislative Council Secretariat as the source and one copy of the reproduction is sent to the Legislative Council Library. Research Office page 16
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