Pay-as-you-go local transport: A key to turning transportation around?

In order for Germany to achieve its ambitious climate targets, emissions in the transport sector must be reduced by 48 percent by 2030. This creates tremendous pressure to shift mobility to more climate-friendly modes of transport.

Local public transport (ÖPNV [öffentlicher Personennahverkehr]) plays a decisive role here. The car is currently the most frequently used means of transport for commuters, and private cars are also preferred for personal use. Public transport will only become a sustainably attractive alternative if it is improved and expanded. This requires significant investments.

Pay-as-you-go financing - i.e. a regularly recurring fee - represents a promising instrument for this purpose. It can also have a governing effect on the mobility behaviour of the population. In our white paper "Pay-as-you-go local transport: A key to turning transportation around?", we will illuminate pay-as-you-go financing as a component for optimising local public transport.

In the process, we will discuss three variants:

• The citizen's fee is a regular contribution by citizens in a defined catchment area. In return, they have access to reduced ticket prices, up to and including free local public transport without a licence. One example is the tenant ticket in the Sennestadt district of Bielefeld: There, residents pay a flat rate for local public transport with their rent, which they can use for this at no extra charge.
• In the case of employer fees, companies are obligated to make contributions per employed person or as a portion of the total salary. They are thus participating in the operation and expansion of the local transport infrastructure, which they also benefit from. Such a model exists, for example, in French municipalities with 20,000 or more inhabitants for companies with more than nine employees.
• For example, a city toll for drivers is considered a usage fee, with at least part of the revenue going toward the expansion of local public transport, such as in Stockholm or London.

The opportunities and challenges of these variants must be taken into account. For example, a citizen's fee can be comparatively easy to levy and can have a strong effect on revenue due to the large number of contributors. However, social acceptance can be a challenge.

The usage fee is only charged to actual users, but the effort to levy is a heavier burden. It is also important to consider here: Drivers who switch to local public transport are no longer available as contributors to local public transport financing. In turn, in the case of employer fees, there is a risk that companies will migrate from the levy area.

The white paper describes the different opportunities and challenges. It explains what factors to analyse and consider when selecting instruments.

It may be necessary to combine different instruments in specific cases. In addition, a solution should be tailored to local or regional conditions in order to achieve broad acceptance. This includes, for example, socioeconomic and demographic factors or aspects such as tourism and the employer structure.

For the successful implementation of pay-as-you-go financing instruments in local public transport, we present a strategic approach in terms of mobility with a three-pillar model in the white paper:

1. Focusing on the needs of citizens
2. Decision-making based on macroeconomic data
3. Ongoing evaluation of the desired governing effects

The first pillar is at the forefront, because mobility affects nearly all citizens. A citizen-centric approach therefore increases social and sociopolitical acceptance.

We describe how the revenue potential of various instruments can be calculated in order to have a basis for decision-making and what insights can be gained regarding the implementation of reference projects in municipalities such as Tallinn and Hasselt.