Should the bus be free? Wrong question.
There's a version of this newsletter I could have written in about four minutes.
It goes:
Luxembourg made public transport free, ridership soared, emissions fell, why can't we be more like Luxembourg.
It would have read well. People love that story.
But...it's also not quite what happened - and the real story is far more useful to us down here in NZL.
While the rest of the world argues about free, down at the bottom of the world, the Otago Regional Council is consulting on something less romantic and much more consequential: zones, fare caps, and whether to stop taking your coins.
Consultation closes 29 July. In our view it deserves more attention than it's getting.
What Luxembourg actually taught us
Luxembourg went fare-free nationwide in March 2020, the first country to do it. Six years on, here's how it is doing.
Ridership is up - the national rail operator hit a record 31.4 million passengers in 2025. Emissions moved, but modestly: the best causal study finds roughly a 5.9% reduction in road transport CO2, with the strongest effect on weekends.
Sit with that last detail, because it's the whole ballgame. The biggest shift was in discretionary travel - day trips, weekend outings - not the Tuesday morning commute. Luxembourg's own transport agency said the quiet part out loud: they never expected a big modal shift, because the thing that decides how people travel isn't price. It's perceived quality - reliability, frequency, total journey time.
Translation: making a bus free doesn't help if it isn't coming.
What free did deliver, unambiguously, was access - for low-income residents and cross-border commuters, the fare was a real barrier and removing it mattered. That's a genuine equity win. It's just not the same claim as "free fixes congestion," which is the claim that usually gets made.
So the useful question isn't should the bus be free?
It's what were we actually trying to buy - and is there a cheaper way to buy it?
Which brings us to Otago.
Three proposals, one equity test
Today a Dunedin or Queenstown adult taps a Bee Card and pays $2.50, flat, whether it's two stops or the whole network. ORC wants to change three things. If it lands, it phases in from October 2026 through mid-2027.
Zones - pay for distance. Sounds like fairness itself. But run it through the equity test and it wobbles. In most regions, and in Queenstown emphatically, the people travelling furthest are the people who can least afford to. Housing costs push the hospitality and service workforce - the people who open the cafés and clean the rooms - out to the edges and beyond. Charge strictly by kilometre and you build a system where the person with the shortest commute and the highest income pays least, and the person driving the tourism economy pays most for the privilege of getting to it.
Zones aren't inherently regressive. But they're only fair if the boundaries are drawn around where people actually live and work, not around tidy concentric circles on a planner's map. That's the submission worth making.
Fare capping - the quiet hero. I'll champion this one loudly. Capping protects the person stringing together four or five trips a day across work, childcare and errands - statistically, the person with the least slack in their budget. It delivers most of the equity benefit of "free" to the people who need it most, at a fraction of the fiscal cost.
If you take one thing from this piece: capping is the most underrated tool in the box!!!
Going cashless - and here's where I'd pump the brakes. ORC's reasoning is that from 2027, Motu Move - the national ticketing system - will let people pay by contactless. Fine in theory. Two problems in practice.
First, Motu Move is late. The $1.4 billion programme was independently reviewed, found to have an "overly ambitious" timeline, and pushed out to end of 2027. Wellington and Auckland aren't due until 2027 either.
Second - and this is the bit that should stop us cold (how cold is it here today!!!) - Christchurch went live in November 2025 without concession fares. The system launched working perfectly well for full-fare adults, while the discounts for students, seniors and people on low incomes lagged behind.
Read that again. When the tech got hard, the equity features were the ones that waited.
So the question for Otago isn't whether cashless is modern. It's:
Do you remove the only payment method that works for the unbanked, the phoneless and the newly arrived - on the promise of a system that's a year late and has already shown you which features it deprioritises under pressure?
Cash is clunky, slow and expensive to handle. It's also the payment method of last resort, and last resorts are, by definition, used by people who've run out of other options.
The takeaway
Accessibility isn't decided by whether the fare reads $0.00 or $2.50. It's decided by where the zone lines fall, whether there's a cap, and whether Nan without a smartphone can still get to her appointment.
Free makes a great headline. Luxembourg's own numbers suggest it buys you less modal shift and more access than the headline implies - which means if access is the prize, we can go get it directly, and more cheaply, right here.
Cap the fares. Draw the zones around people. And don't switch off cash until the replacement has actually shown up - with the concessions working.
Otago's consultation closes 29 July.
If you're in Dunedin or Queenstown, consider putting your thoughts in writing.
Till next time,
Andrew
Transit Trends · Andrew Collings, KA Advisory. Read and comment on the original on LinkedIn.
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