What difference 9€ did and didn't make
Germany just spent 2,5 billion Euro in 3 months on public transport – only to miss the biggest insight
For three months, you could go to any ticket vending machine of any transit authority in Germany and buy a monthly pass for the flat rate of just 9 Euro. You could use this ticket in any local or regional train or bus, at any time, nationwide.
Now, three months and 2.5 billion Euro federal subsidies later, Germany tries to understand why it did so and what it could learn from the experience. It’s not looking promising.
Let’s look at three What’s: What is the 9-Euro-Ticket? What is the intend and impact of the 9-Euro-Ticket? What comes after the 9-Euro-Ticket – and what should?
What is the 9-Euro-Ticket?
First, let’s celebrate and applaud Germany, as the country did something incredible: 64 separate German transport associations (comprising a total of 434 companies) with different tariff systems (types of tickets, pricing, methods of validation etc.), all offered a 9-Euro-Ticket, and accepted said ticket from any other transport association on any local or regional bus or train at any time within a given month.
That is a level of integration not seen since Star Alliance introduced the Round the World Ticket – and it’s a lot more consequential.
The speed of it all was nothing short of science fiction: it took 8 weeks from idea to parliamentary vote, and only 12 days to implementation. For comparison: it takes Berlin 10+ years to study whether it would be feasible to build a bike path under the viaduct of the raised tracks of an underground – not to build, mind you, but study.
Aliens abducted the Republik in Aspik and replaced her with Starship Enterprise.
Even more astonishing: the country of bureaucracy, processes and rules neutered by exceptions and inaction, resembles, at its worst, a triangle lovechild of Groundhog Day, Brazil, and Kafka’s Trial. But Germany can also be beautifully creative and straight-forward, and the 9-Euro-Ticket is nothing short of the efficient and elegant simplicity of Bauhaus, the Braun mixer, or Beethoven’s Bagatelle No. 25.
In short: The 9-Euro-Ticket is a marvel of integration, speed, and simplicity.
What is the intend and impact of the 9-Euro-Ticket?
As part of the broad Tax Relief Act, its primary intend was to alleviate the burden of rising fuel costs (due to Russia’s war on Ukraine) for the German public. It was also to attract new customers to public transit (still with lower ridership due to pandemic), and – as a result of drivers switching to become riders – to reduce CO2 emissions: all part of the Verkehrswende.
The primary intend – alleviate costs – at least partly explains the dirt-cheap price tag of the 9-Euro-Ticket: switching to public transport was supposed to be no-brainer-level cheaper than using the car.
The price point is also powerful political messaging: we hear you, and we take care of you: it made for strong headlines, and signaled that government was taking action.
The response was enormous: 38 million tickets were sold to a population of 83 million. Rail traffic increased by a whopping 42%. 23 of 26 cities reported decreased rush hour traffic. A survey in Munich indicated that 35% of people used public transport more often.1
Given the massive influx of additional passengers to already strained systems, disruptions were few. This is mostly due to the nothing-short-of-heroic efforts of transit workers at every node of Germany’s extensive transit systems. More memorable remained the Punks showing up on Sylt Island (Germany’s Martha’s Vineyard) and cramping the style of affluent regulars.
Yet, according to above Munich survey, only 3% of people used their cars less often. That is not indicative of the modal shift that some had hoped for. It does seem to indicate a rise in induced traffic – which nobody wants. While the three-month test drive for the 9 €/month pass is ongoing, as is research about the effect, the political battle about whether to follow-up with a successor is in full swing.
In short: As of now, the 9-Euro-Ticket didn’t make people switch – which also means it didn’t make people save money (primary goal) or lower CO2 emissions (secondary goal). It induced traffic (not great), made more people experience transit (not bad).
It also did wonders in terms of PR for the government (that, of course, was never a stated goal).
What comes after the 9-Euro-Ticket?
The current debate in Germany centers around whether, when and to which conditions (price and scope of validity) to introduce a successor to the ticket.
Let’s look at each of these in reverse order:
While nobody is arguing to keep the dumping price of 9 Euro, the price is square and center of the debate – after all, it’s named after it. The debated price points range from 29€ to 69€. At the lower end, this would still be a significant rebate to current prices of monthly transit passes: Berlin’s BVG charges between 86€ and 107€ for a regular fare monthly pass.
Discussions about cheaper fares abound, and Vienna’s 365-Euro yearly pass made a lot of splash when introduced in 2012, leading to a massive increase in sales in yearly tickets. But by 2018, ridership had hardly increased, and lagged population growth. Sales of yearly passes remains at record levels, but is mostly accredited to more restrictive parking policies.
As any marketing professional will tell you: price is a very effective motivator, especially when using rebates to drive sales. It’s also the bluntest, dumbest tool in the box. Attractive price points drive sales. But they don’t drive sustained change in behavior.
Scope of Validity
Nationwide transit – that’s almost a contradiction in terms: public transport is usually understood to be urban, local or at best regional. Countrywide validity in countries like the US would mean I could use my monthly pass both in NYC and LA. But I would not be able to get from one city to another. But in a densely populated country with overlapping regional networks, people can actually travel the entire country, albeit at a reduced speed and with more stops.
Most think this gimmick to be of little practical value to the average rider but of significant cost to the associations. Some, like the socially and ecologically minded VCD, now suggest to create large, somewhat overlapping zones, with monthly or yearly passes either for one of these zones, or for all of Germany.
Along with optional add-ons, differentiating between local and regional transit, and reduced fares for students and recipients of social welfare, they end up with 10 different tariffs. That’s a significant increase of options, and also of prices (monthly ranging from €30 to €135). But it’s still a simpler and cheaper fare structure, within larger zones, than traffic associations provide today.
VCD’s stated intend for this proposal: make mobility more accessible for all, but also ensure sufficient funding from ticket sales for traffic associations.
Both are sensible arguments, and the improvement over the current state sans 9-Euro-Ticket are apparent (albeit with lots of similarities).
But this proposal falls short of the radical simplicity of the 9-Euro-Ticket, and at the same time is much more far reaching: The 9-Euro-Ticket was an add-on to otherwise unchanged fare structure of the 64 traffic associations. This proposal would largely replace the regional tariff structures, and would, in the long run, probably force the associations to reshape themselves along the eight new zones.
That is a massive undertaking, with a bazillion of different legal entities involved. This would also involve time, political capital, money, and a lot of bruised egos.
Proponents for a quick successor argue that with so many more people having experienced public transport now, one ought to seize the momentum and follow-up quickly before the summer of 9-Euro-tickets fades into memory and everybody reverts to their old patterns.
Others argue that research and analysis and learnings of the experiment should take precedence, and should inform any future plans – especially since patterns don’t really have to seem changed much.
Current dynamics seem to favor finding a successor sooner than later.
Even though current debates focus on How and When rather than If, it’s far from certain that a meaningful successor is on the books:
The 9-Euro-Ticket was funded by federal government. Constitutionally, local and regional transit are matters of state. (As the Tagesspiegel pointed out, states routinely get the federal government to foot most of the bill.)
For that very reason the finance minister (and because he likes to position himself as the reasonable fiscal hawk in a coalition of spending-spree green ideologues) argued against a “free-for-all-mentality”.
(The transportation minister of the same party was very happy to take credit for the ticket, but favors, like his fellow party member, goodies for car owners instead –Verkehrswende be damned.)
It was born out of a perceived urgent political need to ease financial pain of constituents due to high oil prices. As the low switch rate implies: 97% chose to take additional trips instead, raising questions about both the actual pain and the remedy.
Finally: What should we do?
Here are three recommendations for the road ahead:
1 Focus on goal: modal shift
If we are to create a successor, it’s important to define what the successor should be for: The main goal for the 9-Euro-Ticket was to alleviate rising fuel and energy costs for the public. That, it turned out, was neither successful nor needed.
The secondary goal was to lure drivers to become riders. That worked only halfway: drivers became also riders. This goal – to reduce CO2 emissions via modal shift as part of the Verkehrswende – remains as important as urgent. Make many more people make public transit their chosen mode of transport for all or most trips instead of cars – that should be yardstick and litmus test for any successor.
2 Keep it simple
We know that a dirt-cheap price tag drives sales. But, as we’ve seen, even in combination with sky-rocketing fuel prices it doesn’t do the shift-trick. Yet current debate seems to center around a future price tag (and how to pay for it).
The debate misses the biggest insight: Apart from the price tag, most people praised the simplicity of the ticket. As anybody arriving in a new city can attest to: the biggest hurdle to hop on a bus or tram is figuring out the route including mode changes, the ticket machines and the available passes to get to where you need to go. A taxi, on the other hand, works pretty much the same in any city and rarely leaves you stranded.
Users of the 9-Euro-Ticket loved the simplicity, as it removed the hurdle of complexity: the entire public transport system of Germany suddenly is your oyster, free to explore and roam, and with no fear of getting lost, having a wrong or expired ticket, or the hassle to even concern yourself with the local tariffs and ticketing systems.
The power of simplicity is often overlooked, because “simple” is deemed shallow and unsophisticated. Nothing could be further from the truth: reducing complex, intricate systems to intuitively navigable interfaces made Google beat pioneer Yahoo to become the near-monopoly it is today, and it allowed Apple to grow from niche to the most valued company on Earth.2
The 9-Euro-Ticket is simple AF. That feature is arguably more important than the blunt, dumb and corrosive tool of dumping pricing: cheap stuff gets sold. Simple stuff gets used. Had the ticket been cheap to buy but complicated to use, we would still have seen sales, but not the massive surge in rides.
Keep it simple:3 One single fare nationwide, plus maybe a regional one if zoning is introduced, in addition to existing fares and tariffs.
3 Make it easy…
Simplicity is a powerful attractor. Luckily, simplicity is not only a function of tariff systems. The ease, reliability, speed, safety and comfort of getting from any A to any B are equally strong attractors.
Today’s transit systems have been under-financed and under-invested in, and therefore under-innovated on, for decades. Only in the last years we’ve seen a welcome uptick in public investment and maintenance. Due to prior neglect, this in some places amounts to rebuilding, and less to expanding service.
As a result, and despite the heroic efforts of those working for and in public transit, services today fall short on multiple fronts: they can be unreliable, unavailable, unsafe, uncomfortable, and slow. Public transport today beats driving your own car on 2.5 fronts: it’s cheaper, you don’t have to drive yourself, and you don’t have to service it when it breaks down.
Of the above “un’s”, the unavailable is the most pressing: public transport too often just doesn’t get you anywhere, or at anytime, you need or want to go. Once your only reasonable – aka safe, speedy, flexible, convenient – alternative seems to be a car, you’ll pretty sure be using it for most or all trips.
Transit agencies are starting to fill in the gaps, either by filling in their own network in space and schedule, or by inviting micromobility, carsharing, taxis and others onto their platform, or both. Innovations like on-demand services, automated shuttle services further serve to increase the quality, and therefore attractiveness, of the service. All this is great and sorely needed. And nothing beats the high-speed, high-capacity backbones of light rail, of which we need much more.
That costs tons of money for investments and improvements, and even more to run. It also takes mountains of political capital because, inevitably, you can only spend each Euro or Dollar once, and there are limits to how many modes can co-exist on the same square meter, as any bus driver behind a parked car on the bus lane can attest to.
Make it easy to choose transit over car use: That translates to massive investments in public transport with focus on increasing quality, access and ease of use.
Quality of service is what scientist time and again identify as the single biggest driver of modal shift to transit.
… and harder
The stick equivalent to the better transit carrot is making car ownership and use increasingly uneasy. Imposing parking restrictions, congestion pricing and other measures might get pushbacks from voters, but there are good justifications to charge for use of public land one way or another. They are also comparatively easy and quick to implement.
But remember: What makes cars so attractive – and at times necessary – is that they are virtual anytime-everywhere machine, that also double as mobile living rooms. We’ve spend a century building a global infrastructure that lets you get anywhere at any time with a car, and all in the comfort of your own, personal space.
Just making driving less attractive is no substitute for making transit more attractive, which should be first priority.
4 Keep the pace
The speed of implementation of the 9-Euro-Ticket was impressive, and Germany would be well-advised to keep the momentum, especially as a safeguard against falling into old patterns that include asking whether bike lanes are feasible.
Yet there’s no need for an immediate follow-up: we don’t want more induced traffic on already overstretched transit. Introducing a successor swiftly, e.g. in Q1 of 2023, would still make good use of the current momentum while giving time to refine strategy for a more effective successor, as more data comes in.
Please feel free to let me know why I’m wrong or what you’d like to add:
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They succeeded because creating simplicity is hard work not everybody sees value in, plus it’s counterintuitive to those creating the solutions in the first place: Engineers can get infatuated with the marvelous complexity of their solutions and can’t resist showing it. A
This is where the VCD’s proposal, even though it makes lots of sense otherwise, falls short (on top of implementation headaches as it seems to effectively replace, rather than supplement, existing fare structures). The dumping-is-stupid notion is no argument against social pricing for students and people on welfare.