Controlled Public Transport Fares in the Developing World: Help or Hindrance to the Urban Poor?

Institute of Transportation Engineers. ITE Journal,  Jun 2005  by Thompson, John E,  Nagayama, Katsuhide

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Financial coverage is considerable less than unity. Fiscal year 2002 CTA coverage hovered near 0.5 if depreciation and interest are excluded; that is, income from ticket sales barely covered 50 percent of operational expenses. Coverage decreases to between 0.3 and 0.4 if interest and depreciation are included. The 2001 subsidy requirement for Cairo formal operators reached 720 million LE-a considerable sum that increases political and social pressure for reduction.

TRAVEL PATTERNS OF POOR CAIRENES

The extensive GREATS surveys and simulation tools were applied to quantify the unique transport patterns of poor Cairenes.

The walk mode is most heavily used by the lowest income grouping (less than 300 LE per month), accounting for some 36 percent of unlinked trips. In comparison, walk trips account for only about 10 percent of unlinked trips made by households in the highest income grouping. Public transport trips are pronounced for households with incomes up to 1,000 LE per month, accounting for roughly 50 to 55 percent of unlinked trips.

Although the use of public transport decreases as household income increases, in the Cairo context, even the highest-income households use public transport for roughly one-fourth of unlinked trips (see Figure 3).

Therefore, in Cairo, public transport emerges as a necessity for public mobility, more for lower income groupings. The types of modes used varies across income groupings. The use of the shared taxi mode is dominant among the lowest income groupings, accounting for more than 50 percent of unlinked public transport trips by households with monthly incomes up to 500 LE. Conversely, use of the Metro grows with increasing incomes. Public bus utilization is relatively constant across all income groupings (see Figure 4).

Shared taxi and Metro modes are among the most expensive public transport choices, hovering between 55 and 60 Piasters for single trip tickets in 2001-almost twice that of bus fares. It may be surmised, therefore, that lower-income households make fewer trips, but more by public transport and with a higher reliance on the more expensive shared taxi mode.

The average 2001 monthly expenditure on public transport for all income classes varied between 31 and 42 LE. What is most interesting is that households with the lowest incomes (less than 300 LE per month), representing almost one-third of households, spent an average of 31 LE per month on public transport. Assuming an average income of 200 LE implies that some 15.3 percent of household income was consumed by public transport spending (see Table 1).

How can this expenditure pattern be seen in an international context? The World Bank estimates that transport accounts for between 8 and 16 percent of household expenditures in many developing African countries.7 For low-income households, this presents problems where the priority would be to ensure that the breadwinner has access to transport. It was estimated that 14 percent of households in Dar es Salaam, Tanzania, could afford only 20 or fewer bus tickets per month.8