Network Revenue Protection Plan

Network Revenue Protection Plan 2014 Public Transport Victoria Metro Trains Melbourne Yarra Trams Bus Association Victoria V/Line Ventura Transdev Effective 1 January 2014

Table of Contents 1. INTRODUCTION AND PURPOSE 2 2. BACKGROUND AND CONTEXT 5 2.1 Meaning of fare evasion 5 2.2 Recent fare evasion levels 5 2.3 Cost of fare evasion 6 2.4 Fare evasion risk 6 2.5 VAGO Recommendations 6 3. FARE EVASION BEHAVIOUR 7 4. MANAGEMENT OF FARE EVASION 8 4.1 Strategies to reduce fare evasion 8 4.2 Responsibility for management of fare evasion 9 4.3 Revenue Protection Plan Implementation Committee 10 5. MEASURMENT AND MONITORING 11 6. KEY REVENUE PROTECTION FOCUS IN 2014 12 6.1 Improving Authorised Officer impact 12 6.2 Focus on recidivists 13 7. ACTIONS TO BE DELIVERED 14 7.1 User-friendly ticketing system 14 7.2 Compliance support 14 7.3 Enforcement 15 7.4 Marketing and education campaigns 16 Trim Ref: DOC/14/7095 Page 2 of 16

1. INTRODUCTION AND PURPOSE This Network Revenue Protection Plan (NRPP) is prepared in accordance with the requirements of the metropolitan train and tram Franchise Agreements, V/Line Service Level Agreement and relevant bus contracts. These agreements specify the obligations of Public Transport Victoria (PTV) and public transport operators with respect to minimising the level of fare evasion on public transport. This plan covers: > Background and context of revenue protection activities. > Actions and initiatives agreed by PTV and transport operators to be delivered over 2014 to reduce fare evasion. > Key performance indicators that will monitor activities and measure their effectiveness in reducing fare evasion. Two key areas underpin the initiatives to reduce fare evasion in 2014: increasing the impact of Authorised Officers; and a focus on recidivist fare evaders. Given the critical impact of enforcement on fare evasion rates, a key focus in 2014 will be on initiatives to improve the passenger interception rates and impact of AOs. There are two key aspects to this: > Introduction of penalty fares, to allow Authorised Officers to check more tickets and increase the risk to fare evaders of getting caught. > Cross-deployment of Authorised Officers between the public transport operators. Crossdeployment will target fare evasion from a network-wide perspective. The focus on recidivist fare evaders is underpinned by the findings the Monash University study commissioned by PTV, Understanding the Psychology of Fare Evasion. This study found that the vast majority of lost revenue annually comes from recidivist fare evaders who deliberately and frequently evade paying fares 1. Measures directed at reducing the cost of recidivist fare evaders in 2014 include: > Improved strategies at railway station barriers to reduce instances of passengers walking through open barriers without touching on/off. > Continued focus on ticket checking at platform stops on the tram network to define a paid space at high patronage stops. > A renewed focus on fare compliance on bus services, including improved bus driver vigilance and off-vehicle ticket checking at public transport hubs such as shopping centres. > V/Line fare compliance, to ensure passengers are paying the required fare on commuter services. 1 Currie and Delbosc, 2013, Understanding the Psychology of Fare Evasion, Institute of Transport Studies, Monash University. Page 3 of 16

These activities will be monitored and supported through the bimonthly Revenue Protection Plan Implementation Committee meetings, and the alternate bimonthly one-on-one meetings conducted between PTV and the public transport operators. This plan builds on the initiatives already underway as outlined in the 2013 Network Revenue Protection Plan. Similarly, the 2015 plan will build on the work proposed in this plan. Taken together, these plans represent PTV and the public transport operators long term commitment to reduce the cost of fare evasion in Victoria, while retaining strategic flexibility during this process. Page 4 of 16

2. BACKGROUND AND CONTEXT 2.1 Meaning of fare evasion Fare evasion is defined as paying less than the correct fare to travel on public transport. Note that this definition has two aspects to it, both of which must be satisfied: Legal liability: a passenger is only fare evading if they are legally liable. They are not fare evading if they have a statutory defence for travelling without a valid ticket; ie, they took all reasonable steps to obtain a valid ticket before their journey, there was no reasonable opportunity to obtain a valid ticket during their journey, and they took all reasonable steps to obtain a valid ticket after completion of their journey. Loss of farebox revenue: a passenger is only fare evading if they have cost the system some money. If they have breached the ticketing conditions (for example, by failing to touch on at the start of their trip) but there is no loss in farebox revenue (for example, because they have a valid myki pass for their trip), this is not regarded as fare evasion. It is, however, important to continue to encourage passengers to touch on every time they travel. This simplifies the message that it is a legal requirement and minimises the risk of unintentional fare evasion. 2.2 Recent fare evasion levels Fare evasion is measured through surveys conducted twice a year, and the estimated rate of fare evasion since the beginning of surveying is shown below (surveying on V/Line interurban train services began in 2012): Fare evasion on public transport peaked across the metropolitan network in May 2011 at 13.5 per cent and has since declined to 8.9 per cent in October 2013, Page 5 of 16

PTV and operators will continue working to reduce the level of fare evasion across all modes. The network fare evasion target for the metropolitan area is 8 per cent in May 2014 with further reductions to follow. 2.3 Cost of fare evasion The loss to farebox revenue during 2012-13 is estimated at around $64.3 million ($61.0 million on the metropolitan network, $3.3 million on V/Line trains). While it is not practical or possible to achieve 100% fare compliance across an open public transport system such as Victoria s, there is scope to significantly reduce the cost of fare evasion. 2.4 Fare evasion risk From 1 January 2014, Metro and Yarra Trams will share 70 per cent of the total metropolitan farebox revenue. Previously, until 31 December 2013, the Government guaranteed Metro Trains and Yarra Trams the level of revenue contained in their franchise bids. Accordingly, the operators have a financial incentive to reduce fare evasion on all modes across the network, not just their own services. This will allow operators to build a collaborative and network-wide approach to tackling fare evasion. 2.5 VAGO Recommendations In August 2012, the Victorian Auditor-General s Office (VAGO) tabled an audit into fare evasion. PTV s response to each of the five recommendations is summarised below. 1. Develop survey-based estimates of fare evasion across regional public transport Surveys of V/Line interurban services were conducted in 2013 and will continue in parallel with metropolitan fare evasion surveys. In 2014, regional buses (myki) will be included in fare evasion surveys. 2. Review the cost-effectiveness of ticketing enforcement on Melbourne s trains, trams and buses and on regional public transport PTV has assessed the value for money of Authorised Officer revenue protection activities. 3. Consider the economic case for allocating additional resources to this task The evaluation has been completed. 4. Develop and deliver a plan to: a. complete the full rollout of myki without increasing fare evasion b. reduce fare evasion to match, or better, the lowest fare evasion rates achieved between 2007 and 2009 This Network Revenue Protection Plan (NRPP), which builds on the work of the 2013 NRPP, addresses this recommendation. 5. Publish the fare evasion survey results and provide the detailed data to the public transport operators when the results have been confirmed. PTV will continue to meet the outcomes required by this recommendation, noting that exceptional circumstances may sometimes occur. Page 6 of 16

3. FARE EVASION BEHAVIOUR Fare evasion is a complex behaviour. The report Understanding the Psychology of Fare Evasion commissioned by PTV and undertaken by Monash University s Institute of Transport Studies, identified that the largest amount of annual lost revenue comes from recidivist fare evaders who deliberately and frequently evade paying fares. Deliberate fare evaders tend to have a poorer opinion of public transport than others and have a stronger opinion that it is run for more commercial than social objectives. These fare evaders are also influenced by perceptions that other passengers are fare evading ( the domino effect ). The study concluded that recidivist fare evaders, which equate to around 67,200 people, are responsible for around 14 times as much lost revenue as accidental fare evaders (representing 597,000 people). It is therefore appropriate to focus revenue protection activities towards recidivist fare evaders. This plan outlines three key initiatives that seek to reduce the cost of recidivist fare evasion. These are discussed in detail in Section 6 below. Page 7 of 16

4. MANAGEMENT OF FARE EVASION 4.1 Strategies to reduce fare evasion The complexity of fare evasion behaviour means that a range of actions are required for effective revenue protection, with PTV and public transport operators being responsible for different components. A successful revenue protection strategy requires engagement by PTV and operators and includes the following elements: > A ticketing system that is easy to use and understand, including to top up and touch on > Compliance promotion measures such as ticket barriers at railway stations, and staff at stations and on trains, trams and buses > Enforcement activities by Authorised Officers > Marketing and education campaigns Each of these elements is important but none is sufficient on its own. Effective revenue protection requires a suite of measures designed to create a culture of fare compliance that makes it easy to do the right thing and difficult to do the wrong thing. It is important to avoid inadvertent fare evasion leading to one-off opportunism, which passengers then learn and adopt as normal behaviour. Authorised Officers remain a key element of revenue protection both as a result of checking tickets and as a visible presence on the network. Historical metropolitan data demonstrates an inverse relationship between the number of ticketing infringements issued (ie, fare evaders caught and penalised) and the rate of fare evasion, demonstrating the importance of maintaining a focus on this aspect of revenue protection. Fines 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2005 1 2006 2 2007 3 2008 4 2009 5 2010 6 2011 7 2012 8 2013 9 16 14 12 10 8 6 4 2 0 Fare evasion (%) Fines Fare evasion Page 8 of 16

4.2 Responsibility for management of fare evasion Responsibility for managing fare evasion is shared between PTV and public transport operators. PTV is responsible for: > Setting the strategic framework for development of revenue protection policy. > Developing and undertaking marketing and information campaigns. > Planning system upgrade projects (for example, installing additional myki readers, CVMs, retail outlets or ticket barriers). > Managing updates to the ticketing conditions. > Undertaking regular fare evasion surveys, sharing the results with operators and publishing overall results in a timely fashion. Agreements between operators and PTV contain a number of contractual obligations relating to revenue protection. While the conditions vary between operators, some key elements are: > Using reasonable endeavours to ensure passengers have valid tickets (including eligibility for concessions). > Employing minimum numbers of Authorised Officers and managing their deployment. > Employing minimum numbers of customer service staff and managing their deployment. > Working with PTV to develop, implement and comply with a Network Revenue Protection Plan. > Maintaining accurate records and providing reports to PTV on revenue protection measures. Supporting and assisting PTV in the collection and analysis of PTV Network Data under the obligations of the Network Services Schedule. > Closing and staffing ticket barriers at nominated stations for a set time every day (Metro). PTV and operators may also agree that the Network Revenue Protection Plan may allow for staff to be flexibly deployed across train, tram and bus networks. As part of the contractual requirements on operators, PTV sets flexible benchmarks for Metro, Yarra Trams and Transdev each year. For 2013-14 two of these benchmarks relate to Metro and Transdev s revenue protection activities. Specifically: Metro is required to have a fare evasion rate of 9.5 per cent or lower in the May 2014 fare evasion survey. Transdev is required to have a fare evasion rate of 10 per cent or lower in the September 2014 fare evasion survey. There is no flexible benchmark related to fare evasion for Yarra Trams in 2013-14; however, reducing fare evasion continues to be a key focus as it is aligned to the farebox revenue. Page 9 of 16

In addition to their Franchise Agreement requirements, public transport operators and BusVic are responsible for: > Managing customer service staff to minimise fare evasion, (eg, through staffing ticket barriers at stations, providing information at tram stops) > Supporting the conduct of the fare evasion survey through commitment of Authorised Officers > Providing timely and accurate metrics to support monitoring of revenue protection activities. The Department of Transport, Planning and Local Infrastructure (DTPLI) is responsible for: > Issuing ticket infringement notices and managing appeals and payment related to these > Prosecuting offenders through the Courts where necessary. > Accrediting Authorised Officers to ensure they have the legal power to undertake their duties > Introducing regulatory and legislative change relating to enforcement. 4.3 Revenue Protection Plan Implementation Committee The Revenue Protection Plan Implementation Committee (RPPIC) is responsible for delivery of the initiatives contained in the Network Revenue Protection Plan. This group will continue to meet every second month and include representatives of: > PTV Customer Services > PTV Network Operations > PTV Marketing and Product Development > DTPLI > Metro Trains > Yarra Trams > Bus Association of Victoria > Ventura > Transdev > V/Line Page 10 of 16

5. MEASURMENT AND MONITORING In order to monitor the successful delivery of revenue protection initiatives, PTV tracks revenue protection metrics across the network. These metrics are regularly reviewed to meet ongoing needs, and changes will be made where improvements are identified or different metrics are required. PTV tracks by month the work performed by the operators in terms of tickets checked, TINs issued, and TINs per 100 tickets checked. It also compares the farebox revenue by month, compared to the corresponding month the previous year. Data for myki top ups and touch ons is also collected. Additionally, PTV tracks and compares fare evasion rates by mode, the percentage of passengers who saw an AO in the previous six months, fare evasion rates by type of fare evasion, and myki top ups by channel. Other ad hoc data will also be collected during the year to inform and support activities and initiatives in this plan as required. Regular meetings are held between PTV and public transport operators to ensure ongoing compliance with the initiatives outlined in this plan. Page 11 of 16

6. KEY REVENUE PROTECTION FOCUS IN 2014 As noted in Section 1, two key areas of activity underpin the initiatives to reduce fare evasion in 2014: improving the impact of Authorised Officers; and a focus on recidivist fare evaders. 6.1 Improving Authorised Officer impact The Monash University study found that the risk and perceived risk of being caught for fare evasion has a significant impact on the decision to fare evade, particularly for recidivist fare evaders. This is borne out by historical trends in fare evasion and fines issued. There are two key areas of focus to support improved AO impact: The introduction of penalty fares will provide Authorised Officers with the capacity to check more tickets and increase the risk to fare evaders of getting caught. This approach, which allows Authorised Officers to issue an on-the-spot penalty fare of $75, will also reduce the risk of unpaid Ticket Infringement Notices by requiring immediate and full payment. Penalty fares provide an opportunity to increase fare evasion detection rates, thereby reducing overall levels of fare evasion If a passenger elects to pay the penalty fare, a receipt is issued but no further enforcement activity is required. This reduces the time of each interaction between the Authorised Officer and the passenger, thereby allowing each Authorised Officer to check more tickets during each shift. The success of penalty fares will be dependent on passengers fully understanding their rights and obligations under the initiative. To this end, PTV will undertake a comprehensive communications campaign to support the rollout, and operator staff will support the initiative in face-to-face dealings with passengers. The cross-deployment of Authorised Officers between the public transport operators will target fare evasion from an holistic, network-wide perspective. Cross-deployment initiatives in 2014 will build on cross-deployment work undertaken in 2013. Under this initiative, Authorised Officers employed by one operator may be deployed to check tickets and report offences on another operator s services. Cross-deployment is intended to maximise the value of Authorised Officers as the key, frontline barrier to fare evasion. Through the sharing of resources, the public transport operators are better equipped to undertake targeted, high-visibility enforcement activities, particularly at large modal interchanges and on busy bus routes. Cross-deployment will also allow the public transport operators to efficiently target train, tram and/or bus services in specific geographic areas. Page 12 of 16

6.2 Focus on recidivists The focus on recidivist fare evaders is underpinned by the findings of the Monash University study commissioned by PTV. Reducing recidivist fare evasion requires a range of measures that will make it increasingly difficult for recidivists to avoid paying a fare. Measures in 2014 include: Improved strategies at railway station barriers to reduce instances of passengers walking through open barriers without touching on/off. Ticket barriers are a key deterrent to fare evasion, and to be effective they must be kept closed and with effective staff supervision. Improved training and new scripting will be investigated as a means to better equip these frontline staff members, and they will be supported with AO deployment as necessary to enable them to do their jobs effectively. Simple station design improvements will also be considered where appropriate to allow selected barriers to be kept closed without providing additional barrier staffing. Continued focus on ticket checking at platform stops on the tram network. Yarra Trams has been using temporary bollards and banners at high patronage stops, making it easier for Authorised Officers and Customer Service Staff to check passengers tickets. This will continue in 2014 and opportunities to expand this type of operation will be sought. A renewed focus on fare compliance on bus services will include improved bus driver vigilance and off-vehicle ticket checking at public transport hubs such as shopping centres. BusVic and bus operators will put in place improved training and other supporting measures to ensure that bus drivers are encouraging passengers to touch on, without putting at risk their personal safety. Additional AOs will support drivers in this, and drivers will reinforce to passengers who refuse to touch on that they are more likely to be intercepted by an Authorised Officer due to increased ticket checking. V/Line will work to promote improved fare compliance on V/Line commuter trains, to ensure passengers are paying the required fare on commuter services. The key compliance role on V/Line services lies with the train conductor. V/Line will focus AOs on busy commuter trains where the conductors are not able to check every ticket on the service. More broadly, V/Line AOs will be tasked to undertake specific targeted revenue protection operations through intelligencebased deployment. Page 13 of 16

7. ACTIONS TO BE DELIVERED In addition to the activities required contractually, the following actions will be delivered by PTV, BusVic and public transport operators during 2014. Actions have been categorised according to the strategic elements identified in section 4.1 and include the key revenue protection activities identified in section 6. More broadly, at a system-wide level, there is a need to continue current work in promoting a culture of fare compliance across all organisations. If ensuring passengers pay is to be a central part of public transport service delivery then staff need to care about this. Further embedding this culture in the industry will continue to drive improved passenger compliance across the public transport system. 7.1 User-friendly ticketing system > Identify the optimal solution to promote convenient sales and top up of myki cards to support the tram network, including additional retailers and CVMs where required PTV. > Enable and promote passenger use of more convenient and efficient top up channels to facilitate ease of myki top up (eg, more auto top up, less reliance on CVMs, card payments rather than cash) PTV (with operator support). > Monitor the performance of the ticketing system to minimise the number of customer minutes lost through the unavailability of myki revenue collection devices PTV. 7.2 Compliance support > Work to ensure ticket barriers are not left open at any time and that passengers who complete a trip without a valid ticket are directed to pay for their travel when Authorised Officers are not present Metro, V/Line. > Trial an alternative location for bus FPDs on new buses PTV, BusVic, Transdev. > Review the outcomes required for a Hand-Held Device hardware refresh PTV. > Install new myki gates at Footscray, Sunshine, Mitcham and Springvale railway stations PTV. > Consider the economic case for the installation of additional myki barriers at ungated stations and additional myki readers at key locations on other modes PTV. > Undertake regular presentations to relevant staff to help them understand how their role is vital to the success of public transport by ensuring passengers pay for the services they are using PTV, Metro, Yarra Trams, V/Line, BusVic, Ventura, Transdev. > Improve passenger fare compliance (touch ons) during rail replacement occupations Metro, V/Line. Page 14 of 16

> Promote driver compliance with correct BDC usage and fault reporting BusVic, Ventura, Transdev. > Drivers encourage passengers to touch on, while maintaining driver safety BusVic, Ventura, Transdev. > Increase ticket checking through the deployment of authorised persons Yarra Trams, BusVic. > Develop survey-based estimates of fare evasion across regional public transport PTV. > Harness existing operator communication channels to encourage fare compliance (eg, PA announcements, Twitter, apps, PIDs, on-network communications) PTV, Metro, Yarra Trams, V/Line, Ventura, Transdev. > Review regular revenue protection reports to better meet operational needs PTV, Metro, Yarra Trams, V/Line, BusVic, Ventura, Transdev. 7.3 Enforcement > Introduce penalty fares to allow AOs to check more tickets and increase the risk to fare evaders of getting caught PTV, Metro, Yarra Trams, BusVic, Ventura. > Increase cross-deployment activities, including enforcement at interchange multimodal hubs, Metro, Yarra Trams, V/Line, BusVic, Ventura, Transdev. > Strategic deployment of Authorised Officers based on fare evasion survey data and other information (hotspots) Metro, Yarra Trams, V/Line, BusVic, Ventura. > Increased focus of V/Line AOs on busy commuter services where the conductor may not be able to check the ticket for every passenger V/Line. > Implement a single PTV AO uniform across the state for all operators PTV, Metro, Yarra Trams, V/Line, BusVic, Ventura. > Undertake corralling exercises (banners and bollards) at platform tram and bus stops to increase ticket checks Yarra Trams, BusVic, Ventura, Transdev. > Deploy Authorised Officers at satellite depots to target specific routes and areas while reducing AO travel times Yarra Trams. > Strategic deployment of Authorised Officers to school hubs for education and enforcement BusVic. > Deploy Authorised Officers in varying team sizes, from two at appropriate and safe locations to teams of six in transport hubs with high incidence of fare evasion across the bus network, to increase productivity and coverage BusVic. > Undertake behaviour change enforcement work, focusing Authorised Officers at selected locations intensively for at least three weeks to drive a change in behaviour by passengers in these areas Metro. Page 15 of 16

> Review the current intelligence-based deployment strategy through a better understanding of the data Metro. 7.4 Marketing and education campaigns > Undertake continuing fare compliance campaigns to encourage passengers to travel with a valid ticket at all times PTV. > Undertake campaigns at schools to educate children on behavioural requirements and the need to have a valid ticket Metro, Yarra, BusVic, Ventura, Transdev. > Pop-up activity by PTV customer service officers to provide tailored myki information to customers, including encouragement to use auto top up PTV. > Increase card expiry awareness to ensure customers are informed that they can receive a free replacement myki PTV. > Trial new branding on the myki check device to better differentiate it from FPDs PTV. Page 16 of 16