Public Transport: Why Losses Portrayed As Benefits?

1 minute read


You might be shocked to learn that Automated Fare Collection (AFC) for Public Transport could be the only industry where customers’ financial losses are portrayed as a benefit.

I recall attending a conference where a speaker, representing a vendor and operator of an AFC system, confidently boasted about helping passengers save over $40M collectively.

Curious, I checked their website and found a news post confirming this claim.

How did they achieve this feat? By providing up to a 30% discount for passengers using bank cards to pay their public transport fares.

Yet, during the conference—attended by public transport operators—not one representative of those PTOs questioned the speaker by asking, “Wait, did you just say that with your system, bus companies lose $40M?”

As I dug deeper, I discovered that bus companies paid this firm 5% of each fare payment. Essentially, they paid 5% of their revenues to lose $40M.

It’s likely the marketing person behind the presentation and news post never saw it from this angle. After all, most people perceive discounts as inherently positive, right?

But what if those passengers who ‘saved’ $40M may end up paying twice that amount?

If bus companies lose $40M, these losses are typically covered by administration budgets. And who contributes to those budgets? Exactly—taxpayers, including those very passengers.

Alternatively, without government subsidies, fare tariffs will inevitably rise to compensate for losses, and guess who will bear the brunt of these increases? …

As the saying goes, “There’s no such thing as a free lunch.”