What 9 Euros Say About Public Transit

Referring to the €9 monthly transit ticket, German Chancellor Olaf Scholz said, “”It’s one of the best ideas we’ve had.”

Cheap Public Transit

Last summer, for three months, Germany offered cheap travel. Joking, people even said they would schedule work meetings on a resort island since it became such a cheap commute.

As an offer too good to refuse, at €9 ($9; £7.50) a month they sold 52 million tickets that provided unlimited access to buses, trains, the metro (but not for interregional travel). As for the public cost, 16 German states received €2.5bn in lost revenue.

Now, more expensive but still attractive, starting May 1, a new monthly ticket kicked in. At a €49 subscription,  the new monthly again provides nationwide public transit. Like the €9 ticket, the goal is to cut emissions and the cost of living.

The 9-Euro-Ticket ticket appears to have been more alluring than the reduced price of fuel:

The Best Public Transit Systems

Meanwhile, Bloomberg gave us a more precise analysis of what makes a good transit system. In addition to affordability, we care about the distance between stations, crowding, commute speeds, and the schedule.

Puttng it all together, we can rank Hong Kong, Zurich and Stockholm as the best public transit systems in the world. Hong Kong and Singapore even have autonomous buses:

Our Bottom Line: Incentive

The €9 ticket changed travel incentives.

Its benefits shifted the dialogue from EV subsidies to public transport. Just one example, two pensioners said the ticket was helpful for their “usual bus and tram journeys”as they tried to cope with inflation elsewhere. But hearing that there were 42% more 30km+ rail trips during August 2022 than July 2019 we immediately see the emissions savings. The German Transport Association estimates the savings at 1.8m tons of CO2. In addition, euronews tells us that the program displayed that government can work.

For us though, as economists, it is all about the power of the law of demand. So yes, the lower the price, the more quantity we want. But we should add that there is more to cost than price. Defined as what we  sacrifice to use a good or service, the cost of Hong Kong’s public transit is also cheap.

My sources and more: It’s always nice when two disparate stories from the Guardian and Bloomberg come togther, From there, euronews, the AP and BBC had lots more public transit detail.