Why Melbourne’s free trams are bad for commuters

Melbourne tram on a busy city street with traffic lights.

Sue Hewitt

Posted August 23, 2019

Free tram zone to blame for increased congestion, longer waits and fuller carriages.

Is there such thing as a free ride when it comes to Melbourne’s trams, or is the public unwittingly paying an unreasonable price for the city’s free tram zone? 

It’s just one of the questions RACV senior planner Stuart Outhred wants answered before a parliamentary committee considers extending the existing zone from the CBD grid to include popular attractions such as the MCG, Melbourne Zoo and Shrine of Remembrance.   

The extension proposal was raised by independent state MP Rod Barton who told parliament it would encourage “participation and access for tourists and locals alike and remove the need for them to consider bringing vehicles into the city”. He argues that free trams also remove confusion about the myki ticketing system for city visitors and tourists. 

But while the proposal is set to be considered by parliament’s economy and infrastructure committee next year, RACV’s Stuart Outhred is not convinced the benefits of a free tram zone outweigh the costs. He warns that careful analysis of the existing free tram zone is essential before extending it. 

“Where’s the analysis that this idea makes sense and stacks up in its current form, let alone proposing to extend it? Our tram system will need to do a lot more work in the coming years; Melbourne is booming and getting the transport mix right is critical.”  

He says the existing free zone is very likely causing the extreme overcrowding that many Melburnians and visitors experience on city trams. 

“This is a fairly simple supply-and-demand issue,” he says. “Free trams mean fuller trams, more congestion, longer waits. That might be causing more harm than good. 

“The scale of activity in central Melbourne with nearly a million people in the city every day means we need to think really carefully about how the transport system functions,” he says. “Making a scarce resource free seems like a very fragile policy.” 

Stuart says the estimated $10 to $13 million the free tram zone costs in foregone revenue each year could be better spent on improving public transport.

Supporters of the free tram zone, which was introduced in 2015, claim it promotes tourism and greater use of public transport, and helps gets cars off the road. They want it extended to include tourist hotspots like the MCG, National Gallery of Victoria, Shrine of Remembrance and Melbourne Zoo as well as Parkville’s Royal Children’s Hospital. 

The Committee for Melbourne, a not-for-profit think tank, started lobbying for an extension to the free tram zone in 2018. It argues extending the zone would build on the existing system’s success in making Melbourne an “attractive, globally relevant and distinctive system” and link to cultural and sporting venues. 

It concedes there may be alternatives to extending the free tram zone, such as a free myki cards for visitors or a Melbourne tourist card with free transport and free admission to attractions. 

Melbourne city council also wants the existing free tram zone and potential extension assessed.

“The City of Melbourne looks forward to receiving the Victorian Government evaluation of the costs and benefits of the existing free tram zone or any potential extensions to the zone to sporting arenas and hospitals on the city’s fringe,” a spokesperson said.

“Our transport network is a system and, should funding for an extension to the Free Tram Zone become available, consideration should be given to whether this investment will deliver the greatest benefits to the network, mode shift and user experience, or whether other initiatives may deliver higher public value.”

Daniel Bowen from the Public Transport Users’ Association says the entire issue of free tram zones should be reconsidered given overcrowding on city trams and the disadvantages it causes for fare-paying commuters. 

“It may be called free, but someone has to pay for it and the millions of dollars a year [spent on free travel] could be used for public transport services in the outer suburbs,” he says. 

“[In the city] regular public transport users who have paid their way can’t fit on the trams.” 

The Rail Futures Institute’s representatives, David Hardy and Yarra councillor Jackie Fristacky, say that instead of subsidising more free tram travel, the money should be spent on buying more high-capacity trams. 

They argue it is economically illogical to make a high-demand city public transport service free when passengers are charged for city loop trains and CBD buses.