Friday, March 21, 2014


Opal smart card at Circular Quay Sydney
Opal staff hand out fliers at Circular Quay- note the interchange signage in the background (DRC)
“Cheaper fares with Opal!” say the more enthusiastic promotions people, echoing the text of the flyers they hand out at Sydney’s Circular Quay commuter wharves. It is an ironic choice of location. Circular Quay is Sydney’s only tri-mode bus, ferry and rail transit interchange.  Here more than anywhere else, commuters are going about a modal interchange, in many cases to the third mode of their journey. A feeder bus, a ferry and a train is not a rare itinerary.

It is these interchanging passengers who are to endure the greatest fare increases under Opal. It is little wonder that the Opal team have had to ramp-up the propaganda; as commuters come to the realisation that the new smart-card penalises them for their modal interchange, they are less willing to abandon their old zone-based multimodal mag-stripe tickets.

General comparisons between the old multi-modal tickets and Opal are difficult, because of the sheer diversity of multi-modal journeys. It is with this problem in mind that Jani Patokallio developed in his spare time. A complete web-app with the sole purpose of cutting through mind-numbing complexity of calculating the comparative prices of Sydney transit fare options. screenshot for a typical two mode commute (15/3/2014)
Patokallio observes that for many multi-modal journeys, costs will significantly increase. This is the most recent change in a ten-year history of Sydney's transit pricing increasingly favouring long single-mode journeys, at the expense of short multi-modal journeys.

While the press-releases of governments of both persuasions have been laden with pro-integration rhetoric (and have even restructured and rebranded the transit instrumentalities to appear integrated), fare structures increasingly impede integration.

What Was the Point of Opal?

The story of Opal is one borne out of a political response to the previous Government's abortive attempts to implement T-Card integrated ticketing. The broader narrative around the need for a new "integrated ticketing" smartcard system has its origin in a 1996 major Inquiry by the newly-formed Independent Pricing and Regulatory Tribunal (IPART). IPART observed that integrated ticketing could improve the flexibility, convenience and accessibility of transit  [5] and that a smartcard system could enable the delivery of integrated ticketing.

The then Government's response was included in its 1999 'Action for Transport' plan, a central pillar of which was to develop an integrated ticketing system, expanding a combined intermodal fare structure beyond the then existing ones in inner-Sydney to the privately operated areas in the outer West and Illawarra. Between 1999 and 2010, consecutive Labor Governments grappled with implementing the technology to deliver integrated ticketing, culminating in the collapse of the T-Card integrated ticketing project, and the near bankruptcy of Australian technology company ERG. In April 2010, after the failure of T-Card, the then Labor Government awarded the contract for a new smartcard system to the Pearl Consortium.

Amidst the mire of T-Card's challenges, the original intention of improving the "flexibility, convenience and accessibility" of transit was somehow lost. As early as the year 2000, Australian transport researcher Paul Mees was sceptical of the New South Wales Government's characterisation of its integrated ticketing project:

“In Sydney there is still no discussion of a genuinely multi-modal fare system. Instead what is proposed is an electronic ‘smart-card’ which makes it easier for passengers to pay a separate fare for each mode used…” [4]

In 2003 a Ministerial Inquiry into Sydney's transport, led by the chairman of IPART responsible for Sydney's transit fares,  redefined Integrated Ticketing as "The use of a single stored value card to purchase travel (referred to as the ‘smart card’)" [6]. This belief that "integrated ticketing" was nothing more that a unified contactless charge card spread throughout the transport administration, and the entire T-Card project was effectively redefined as one with the purpose of producing an electronic purse for transit, rather than an integrated multi-modal pricing regime.

When the new Liberal State Government was swept to power in 2011, it inherited the smartcard contract awarded by the previous government. The new government nonetheless had a very clear mandate and motivation to get a system in place that lived-up to the ticketing systems that Sydneysiders often see interstate and overseas (with the thought "why can't we do that in Sydney?). In September 2011, the press release came unveiling the new ticketing project:

London has the Oyster, Hong Kong has the Octopus, and Sydney will have the Opal.
Transport Minister Gladys Berejiklian today announced the Australian national
gemstone would find its way into the pocket of public transport customers in the form of the new electronic ticket."

As with the wayward T-Card after about 2003, the Opal project sought to imitate international examples like London's Oyster. But with the original purpose of integrated multi-modal fares lost amidst its highly political rebirth, it has struggled to get beyond replicating superficial form.

Superficial Form: Solutionism and Cargo Cults

In his recent book “To Save Everything Click Here”, Evgeny Morozov wrote on the problems of what he calls “solutionism” and “internet centrism”. An aspect of his argument is that the internet has formed a reality distortion field, whereby things that the technology of the internet can enable are assumed to be inherently desirable.

“Ironically, in addition to sanctioning the hideous ideology of ‘solutionism’, with its never ending quest for solutions to often non-existent problems, Internet-centrism is beginning to block our ability to think of effective technological solutions to problems that do exist. Solutions are not addressed based on their merits but rather on how well they sit with the idea of [The Internet]” [1]

It struck me while reading Morozov that the phenomenon he described was applicable to other technologies with a political dimension: that any technological centrism can block our ability to think of effective solutions to actual problems. It also reminded me of a related concept described by Nobel-winning physicist Richard Feynman in his 1974 Caltech Address.

“In the South Seas there is a cargo cult of people. During the war they saw airplanes with lots of good materials, and they want the same thing to happen now. So they've arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head to headphones and bars of bamboo sticking out like antennas--he's the controller--and they wait for the airplanes to land. They're doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn't work. No airplanes land. So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they're missing something essential, because the planes don't land.” [2]

All aboard the Opal plane: A Melanesian "cargo cult" with their aeroplane, but alas, no cargo
Both of these concepts describe the outcome of a mental shortcut: the recognition of, and focus on, a superficial form. In Morzov’s description of “Internet Centrism” the logical error is that because something has a superficial form that aligns with the superficial form of other good things enabled by the same technology, it too must be good. In Feynman’s description of “Cargo Cult Science” the logical error is the belief that replicating the superficial form of complex system produces the same outcome as the complex system.

A focus on technology and infrastructure (and its appearance to the electorate) rather than an operational outcome is not an unusual problem in transit. Paul Mees touched on the dynamic in the field of transit in his thesis “A Very Public Solution”, observing that, in order to improve transit:

“Many of the preoccupations and conventional wisdoms of traditional public transport planning will require reconsideration or rejection if real change is to take place. Infrastructure and technology fetishism will have to be abandoned, although getting technological decisions correct remains important.” [3]

Sydney’s new Opal card has fallen victim to phenomena described by Morozov and Feynman. The outcome is over $1bn being spent on technology that does not solve a problem, but rather replicates the superficial form of successful revenue collection systems like London's Oyster. Opal has the contactless smartcards, the backend data warehouse, all the visible physical form of systems like Oyster, yet is missing something essential- the fundamental mechanics of an integrated fare system.

Integrated Fare Systems

The two dominating considerations in commuter travel are how long it takes, and how much it costs. These are the major elements of what transport planners call Generalised Cost, the value which travellers compare across the various travel options they can use.

These are linked, by virtue of the different attributes of different modes of transportation. A short, low patronage, local trip is best served by a car or bus. If you want to reliably and quickly move 30,000 people per hour in a single lane over medium to long distance you'll need a train. If you want to go over water without a bridge, you'll need a ferry. And the fastest journey for most people would involve a combination of these. But if you apply a cost to each of these component trips independently, you very quickly destroy the Generalised Cost value proposition of the door-to-door journey.

For this reason defining pricing of urban transport around accessibility, rather than around individual trips on individual modes, is necessary to provide the equitable Generalised Cost and price signalling supporting the free interchange of passengers between modes of different scale. Integrated ticketing aggregates the network access or flag fall component of cost across a product called mobility rather than a product called a ride on a bus.

Integrated ticketing is of particular importance for transportation modes that do not work very well in isolation. Ferries are the supreme example, being captive to water, there are very few journeys they can serve door-to-door. Being blessed but divided by a wide harbour, Sydney has few harbour transit crossings other than ferries; only two significant rail crossings (the North Shore line and the Main North), compared to say London's 23 rail crossings over or under the Thames.

Accordingly there has been in Sydney a long history, though a piecemeal and declining one, of integration. From the 1930s, there was collaboration between different operators, both private and government, to provide multi-modal services. Often, as with the Balmain to City commute, a faster journey and better use of capital (keeping trams out of slow-moving City congestion) could be achieved by the Government Tramways collaborating with a private ferry operator, offering combined integrated tickets at the same price as single-mode (tram only) tickets.

Sydney multi-modal tram and ferry ticket from 1945
A Multi-modal tram and ferry fare from the late 1940s (DRC)

Many cities have now embraced generalised system-wide integrated ticketing based on time and zones, including London's Oyster, with its underlying zone TravelCard system. (I explained the key aspects of London's time and zone system which underpin Oyster in this post on Opal and Oyster).

There was a long (30 year) gestation for the concept of integrated zone fares in Brisbane leading up to 2003, which concluded in ultimately successful lobbying by groups such as The Brisbane Institute and Queensland Conservation Council. Transport planner Eric Manners was a key author behind community-interest lobbying such as this one from SmogBusters. In it Manners identifies a succinct recommendation from consultants and transit revenue experts Wilbur Smith & Associates which is as relevant to Sydney today as when published in Brisbane in 1970:
"The efficient and economical operation of public transport requires full coordination of services, the elimination of wasteful duplication and the use of each type of transport vehicle and system to meet the particular needs it can best serve"
US Transit planner Jarrett Walker described a similar challenge in specific relation to Sydney in 2010:

"My basic view of connection penalties has always been this:  The connection is not an added convenience for which the customer should pay extra.  It's an inconvenience required by the geometry of any efficient, legible, and frequent transit system.  Transit systems must therefore do what they can to minimize this inconvenience and encourage people to make connections.  Connection fare penalties are exactly contrary to this imperative."

Few have explained the importance and rationale of integrated transit pricing as clearly as Dr F Pampel, Director of the Hamburg Transport Authority (HVV). The HVV was the pioneering example of an authority overseeing an integrated approach to multi-modal operations across more than ten operators, most of which were private enterprises. They pioneered multi-modal integration, inspiring similar celebrated transit systems like Zurich's ZVV. In 1967 Pampel presented a paper to the Union Internationale des Transports Publics (UITP):

"The essential prerequisite for the desired integration of transport in the Hamburg area was a passenger fare system with uniform rules of price calculation and tariff provisions for all the services in the Community... 
When the fare system was worked out, great importance was attached to identical prices for broken and continuous journeys of the same length in view of the large number of broken connections resulting from the transport network structure with the rapid transit systems as the main carriers and the buses as feeders and distributors. The joint fare system allows passengers to change vehicles as required. All fare barriers existing between different operating branches and undertakings have been eliminated. All services in the Community are offered to the passenger under a unified fare system." [7]

In some cities the principles set out by Pampel have only been achieved with arrival of newer generation technology. It was indeed the Oyster Prestige smartcard in London that enabled an electronic purse with an upper limiting zone fare defined by the TravelCard zone system. It was the GoCard smartcard that enabled the implementation of Brisbane's Translink zone system. It was the Clipper Card that enabled San Francisco's MUNI to role together time-based multi-modal fares with the Bay Area Rapid Transit's fare system (previously a confusing paper-based transfer system).

It is perhaps for this reason that there is a Post hoc ergo propter hoc logical error contributing to the cargo cult mentality; that the smartcard itself has become the object of desire, rather than the fundamental and unfortunately prosaic pricing structure and revenue-division framework at its foundation. As understandable as it is, it is an error that needs be corrected if Sydney's transit system is ever to become an integrated one.

Actions and Words

In the introduction I included a screenshot from, showing a fairly typical combined ferry- rail journey increasing $827 or 36% from $2293 to $3120 for a year of travel. This in itself is a damning contradiction of the "Opal Fares Cheaper" press releases.

Ministerial Press Release "Opal Fares Cheaper" 12/12/2013

But if we look over a longer period we see an even greater discrepancy between single-mode and multi-modal journeys, particularly those involving a ferry.

Above: Per Cent increase of Sydney transit weekly fares, single mode and multi mode over ten years to 2014, without Opal and with Opal (full backing sheet, inputs and sources are available in this spreadsheet)

There are two important things revealed in the above graph:
  • Long single-mode journeys have increased at (or at less than) inflation for the last ten years, ferry fares have increased about 60% (double CPI) and multi-modal fare price has more than doubled in ten years, with a 107% price increase (more than triple CPI)
  • Single mode journeys enjoy a moderate price decrease under Opal, multi-modal fares suffer a significant price increase
It is also interesting to note that ferry fare have massively outstripped rail fare increases, despite ferries consistently maintaining a higher cost recovery [8]. This graph is not comprehensive. There are some cases that are better, and some far worse. But it is illustrative of a fundamental disconnect between what policy allegedly aspires to, and what is actually happening. The bureaucratic response is to downplay the number of people affected, according to Sydney Morning Herald journalist Jake Saulwick:

"Transport for NSW says that its analysis shows that just 7 per cent of people would pay more under the Opal, with another 7 per cent potentially paying more. Those paying more would typically be people who buy monthly, quarterly or yearly public transport tickets.
But the department has consistently refused to release the full analysis upon which these figures are based."

Whether it just effects 7% of people now is hardly the point. Given the massive price differential that has established between mutli-mode and single-mode tickets over the last 20 years, it is no surprise that multi-modal fares have declined from over a quarter of total passenger revenue in the late 1980s [9]  to "7% of people" today. That does not tell us how many people are not using transit, or are using a fare-minimised route rather than time-minimised or "optimal use of infrastructure" combination of buses, trains, ferries and trams.

Not only does $1bn worth of smartcard technology not support multi-modal pricing, it makes multi-modal journeys considerably more expensive than single-mode journeys. In this central functional respect, Opal is the polar opposite of integrated zone-based ticketing systems like London's Opal, and even Brisbane's GoCard and Perth's Transperth tickets.

The outcome

No doubt the focus will stay on the expensive technology, because like the fires on the runway, the superficial appearance is what gets noticed by the casual observer. There will be self-congratulatory back slapping and perhaps even more "smart infrastructure" awards acclaiming the success of the rapid Opal smartcard rollout. And from a hardware rollout point of view, it has been a remarkable turnaround. The success of this technology project- of quickly and successfully setting the fires along the runway, and donning the coconut headphones in the bamboo control tower, is immense.  But Opal delivers none of the central benefit of integrated ticketing systems after which it is superficially modelled, at a greater cost.

In fairness, Opal can be credited with two achievements: replacing life expired-technology (like on-board bus magnetic stripe systems) and improving revenue tracking to non-gated rail stations. Whether the two practical outcomes warrant over $1bn expenditure on smartcard technology is highly doubtful, particularly as smart-card systems are now being superseded by low-capital mobile technology such as that recently rolled out on Boston's MBTA.

Price signals blocking multi-modal transit are subtle and sinister in their effects. By way of just one example: commuters stop catching the bus to the train station, they drive instead. The car park fills up, the road becomes congested. Patronage of the feeder bus drops. Bus revenue falls. The operator reduces service levels. The bus becomes less attractive to the few remaining people using it because of its infrequency. The Municipal Council is motivated into building a multi-million dollar car park or a bigger car park.

As Transport for New South Wales pushes for more multi-modal infrastructure, such as Sydney's currently under-construction Eastern Suburbs Light Rail, more modal interchange will be necessitated, and cracks in the "one journey on one mode policy" will propagate. Whether there will be the economic impetus (of equitable cost-recovery) or political impetus (of disgruntled commuters), it is conceivable that these kinds of ad-hoc kludges will converge to a geographic zone-based cap.

If the current course of Opal is maintained (replacing multi-modal periodicals altogether with capped trip-based fares), ferries will be particularly hit. Cross-elasticity of demand will draw passengers to cheaper more time-consuming capital and labour-wasting options, such as sitting in buses jammed water-side roads like Spit Road and New South Head Road. And the empty seats will continue back-and-forth on the harbour irrespective.

There is still an opportunity for recovering value from Opal's costly infrastructure. A zone-based system (like Sydney's former TravelPass) could be restored as the capping mechanism for Opal, as TravelCard is for Oyster.  But it requires both leadership and understanding of the issue at hand, of which there has been little evidence to date.

The original version of this post incorrectly indicated that the Opal project was awarded by the current New South Wales Government. In fact the Pearl Consortium which delivered what was subsequently named Opal was awarded the contract by the previous Government. This has been corrected.

[1] p75, To Save Everything Click Here, Morozov E, 2013, Allen Lane/ Pearson, London
[2] Cargo Cult Science, Richard Feynman, 1974 address to Caltech
[3] p289, A Very Public Solution, Mees P, 2000, Melbourne University Press, Melbourne
[4] p288, A Very Public Solution, Mees P, 2000, Melbourne University Press, Melbourne
[5] IPART, March 1996, An Inquiry into Pricing of Public Passenger Transport Services, Fare Structures for Public Transport, Transport Interim Report No 4, p27
[6] p107, Ministerial Inquiry into Sustainable Transport in New South Wales, 2003
[7] p11, The Hamburg Transport Community, an example of coordination and integration in public transport, Dr.-Ing. F. Pampel, Presented before the UITP, 1969
[8] p38, NSW Auditor-General's Report to Parliament- Volume Eight 2013- Transport Overview, 2013, Sydney
[9] p12, Urban Transit Authority Annual Report 1987-1988

Saturday, May 25, 2013


Is Sydney’s public transport performing well or not performing well? User experience is that it’s not performing well, reflected in frequent news reports, social media outrage and pre-election opinion polling. By contrast, the operator’s statistics indicate Sydney’s rail, buses and ferries are performing well, with consistent high results.

I’m going to explain what “Key Performance Indicators” (KPIs) or “Metrics” are, why they’re important, and what’s wrong with them in the context of Sydney’s urban public transportation (or transit). By way of warning, there will be a bit of what looks like management jargon. Please do not be deterred, I want to stick with the established terminology for consistency.

I’ll contrast the practices of companies working in a competitive environment with the practices of Sydney’s urban transit. I’ll also illustrate by international example that customer focus can be, and has been, replicated in public-sector transit services.

Finally I'll explain why I think the era of rampant misrepresentation of performance is drawing to a close, whether governments, agencies and operators want it to or not.

Why it Matters

The underlying motivation for me writing this is that urban transit performance indicators in Sydney have been gamed. The indicators are more about producing high percentages than telling us anything meaningful. Yet they are used as a basis for judging the effectiveness of investment of tax-payers’ dollars, fare (price) setting and assessing management performance.

Reported success or improvement is rewarded, publicised or used as a basis for fare increases, when in fact many of the reported indicators do not show success or improvement in any meaningful sense (to a customer, investor or economy).

You might expect that the indicators would seek to represent features of performance that are important to users and the success of the transit business. However, this is not the case. And it’s not surprising when incentives around the creation and application of KPIs are not to develop or grow the business, but rather to project success theatre.

A half-hourly Sydney bus departs too full to take on passengers at the Edgecliff rail interchange
A half-hourly Sydney 324 bus departs too full to take on passengers at the Edgecliff rail interchange 
The bus operator, State Transit, reports 99.87% Reliability in Q4 2012 (source)

The present Sydney transit KPIs are almost useless from a management perspective; they do not meaningfully inform management actions to improve customer experience. From a passenger and price-setting perspective they are at best useless and at worst intentionally deceptive. Moreover, meaningless KPIs render it impossible to analyse the (dis)improvement arising from strategic and operational changes.

This is not a problem that is confined to Sydney or transit, indeed it permeates the public sector to the highest level. However, with an active and earnest focus on performance, several transit organisations globally have overcome this bane. Sydney can too.

Yes Minister: The Florence Nightingale Award Used the Wrong Metrics to judge success


In a free, competitive market with multiple participants providing similar services, those participants are typically trying their hardest to improve how they fulfil the needs and wants of their customers.

Access, Glamour, Comfort, Value- Public transport in the competitive era (left: Central London rapid transit c1890 right: US Interstate rail c1950)

In the competitive private sector, performance reporting is important mainly for managers to understand how their business is performing, and to quantify which management actions improve or impede performance and by how much. Performance reporting is also necessary to inform investors or prospective investors of how the business is performing.  Understanding KPIs or Metrics is the livelihood of investors. They want to put their money in companies which meet (or will meet) consumers’ needs better than other companies trying to meet those needs.

Investors therefore seek factual metrics on performance which are an indicator of how the company satisfies peoples’ needs, how efficient it is, how it’s growing and how much money it could make. As a corollary, companies are always seeking to provide those metrics, and finesse them is such a way as to claim as much success as they can.

Whether it is a manager seeking to cast his performance in the most favourable light, or a whole company talking-up its performance pre-investment, companies have a natural incentive to create metrics that overstate performance or success at meeting customers’ needs. These, in the lean startup world, are called Vanity Metrics. A famous example was Groupon’s overstated income described here by the New York Times, so-called “adjusted consolidated segment operating income”.  Informed investors are attuned to the phenomenon and know when to call bullshit.

While speaking on the ineffectiveness of Vanity Metrics, Eric Ries defines “success theatre” as “energy that goes into making people think you’re being successful, rather than ... into serving customers” from this video (2:26-3:06)

In the private sector, performance indicators or metrics are under scrutiny from investors, prospective investors and even journalists reporting on the market.

In government-funded services operating in an uncompetitive environment, or in government-granted monopolies (like exclusive franchised bus, rail or ferry services), performance reporting is especially important. In the absence of market competition, it provides the only means by which performance and return on taxpayer dollars can be judged.

Unfortunately, however, public sector and monopoly transit operators are not under the scrutiny of shrewd investors. There is no individual or institutional investor who stands to gain or loose millions of dollars as a consequence of operational performance being misrepresented. For that matter, given transit operators' monopoly position serving an often captive market, there is often no direct signal from bad operational performance- only what comes back indirectly from the loss of a metropolitan area’s efficiency and productivity, and user (voter) displeasure expressed at the ballot box or in protests.

Taxpayers and voters are so far from the details of this one small part of their collective financial interests, that even when there is occasional scrutiny, there is no driving motivation to overhaul performance statistics of transit operators. For taxpayers, if the experience is bad enough, they’ll  vote accordingly. Unfortunately, on a year-to-year level and on a decision-to-decision level, this gives us no insight into what’s working, what’s not working, and what we are really getting- in objective quantitative terms- for our dollars spent.

Metrics in Sydney’s Transit

I'll delve into a couple of specific examples of KPIs in Sydney, one on buses and one on trains. Both relate to the headline "on-time running" metric.

Back in 2009 the Government's transit price setting regulator (the Independent Pricing and Regulatory Tribunal, IPART) observed on p26 of its Review of fares for metropolitan and outer metropolitan bus services for 2009, IPART:

"Measures of on-time running are largely limited to recording whether the bus leaves the depot on time. IPART has previously noted that this is not a good indicator of the bus network’s actual on-time running performance or the level of service actually experienced by passengers. IPART considers that the inadequacy of this measure makes it difficult to form a meaningful judgement of the change in on-time running performance. "

In 2010, the New South Wales Auditor General produced a report- Improving the Performance of Metropolitan Bus Services. In the conclusions on p3, the Auditor General noted:

“…a lack of performance information has prevented NSWTI from undertaking any comprehensive analysis of the performance of bus services. The proposed new performance assessment regime will be limited to using data already available and will not cover many areas of performance important to bus users. This will continue to frustrate NSWTI’s ability to manage the performance of metropolitan bus services.”

As anyone with an MBA will tell you, if you’re not measuring the performance of what you’re trying to improve, you’re off to a bad start. This would be a damning assessment, were it made by a venture capitalist with regard to an enterprise. If the managers of the company were unable to even understand, let alone demonstrate, the company’s value proposition and performance, there would be concerns for the managements’ competence.

But we find that even two years after that recommendation, the reported data remains largely unchanged. The headline “on time running” metric, despite criticism from both the Auditor General and the Independent Pricing Regulator continues to be defined by a near meaningless criteria:

“The on-time running for State Transit is defined as a bus that starts its trip between zero to 5 minutes after the scheduled departure time.”

(p6, Quarterly Performance Report, October-December 2012, Transport- State Transit).

According to the Independent Pricing Regulator in December 2012 it is actually not 5 minutes but rather:

“A bus is considered to be on time if it departs from its starting point 5 minutes after its scheduled time. In practice this means a bus can depart up to 5 mins 59 sec late and still be on- time.”

(footnote 13, p7, Metropolitan and Outer Metropolitan Buses – Costs and service Performance Report 2012, IPART)

Just to restate what’s going on here: the only measure of timeliness of service delivery, for management reporting and for review by the independent price setter, is how many buses have left within 5 min 59 secs of timetable from the start of a route.

There is no consideration of how early or late buses become throughout their routes. As a corollary there is no understanding of how many services or connecting services are missed by virtue of early or late running, how much productivity is lost, or the general economic benefit or disbenefit of various courses of management action.

On-Time running for Sydney CBD and inner-west Region 6, from p6, Quarterly Performance Information, October-December 2012, Transport- State Transit

The Auditor General was not been able to realise any change in the indicators used for price-setting and management reporting. In stark contrast, as explained in the below video, when it suited State Treasury’s interests to demonstrate the need for Federal funding, the bus “on-time” criteria is changed “to within 2-minutes” along the whole route. The manipulation of sampling and thresholds to suit managerial and political interests successfully turns the performance of inner-Sydney buses from “90.54% On-Time” into “81% running late”.

(Seven News Sydney, 9 out of 10 Sydney Buses Late, 29/4/2013)

This whimsical redefinition of KPIs to suit political ends has also been seen in Sydney's passenger rail system. Rail "on-time running" was judged against a threshold of 3 minutes 59 seconds.  In 2005 the threshold was changed to 5 minutes. On-time running performance jumped from 63% to 89%. The improvement in reported performance between 2005 and 2006 was nothing but an exercise in statistical manipulation- a hollow and superficial victory if ever there was one.

Sydney's passenger rail operator increasing claimed performance by redefining "on-time" (source: CityRail
These visible and obvious abuses of KPIs are symptomatic of a less visible structural problem with transit metrics in Sydney- they simply do not represent a meaningful or useful measure of how public transport is performing.

Whether it is the total lack of consideration for journey times, reliability being defined as for example "the percentage of buses that ran" (with no consideration for whether those buses were early, late, or too full to take passengers), or whether it is the lack of consideration for actual timeliness with which passengers complete their rail, bus or ferry journeys, the headline statistics cannot be interpreted to give an understanding of what users experience.

Moreover, scores against arbitrary thresholds (like 95.2% of trains ran less than five minutes and 59 seconds late at six measuring points in the network) cannot be used to understand the economic value or cost of performance.

These examples only relate to the headline on-time performance metric. Similar problems pervade most of the metrics which appear both in voluntarily made and statutory reports. Broader criticisms and suggestions relating to metrics in Sydney's rail system can be read in this 2011 report for the NSW Business Chamber entitled "Improving Customer Experience". For the sake of brevity I'm going to stick to examples relating to the top level metrics only.

In summary Sydney's urban passenger transport provider KPIs

  • Are prone to political and managerial abuse, by virtue of using arbitrarily defined thresholds (e.g. X trains within Y minutes at location Z) rather that using absolutes (e.g. Passengers experienced X minutes of lateness to their journeys)
  • Have been abused in the last decade, turning "63% on-time" into "89% on-time", or 90.54% on-time into "81% late" through shifting thresholds and samples
  • Have been identified by the Auditor General, the Government Pricing Regulator and the NSW Business Chamber as flawed
  • Have not been reviewed or corrected, and continue to appear in performance reports in their deficient form.

So is Sydney's problem a global one, an intrinsic failing of uncompetitive, government-funded markets, a problem to which we should be fatalistically resigned? You're probably guessing from my overcooked rhetoric that the answer is a resounding no.

International Examples

Public transportation in Zurich is often regarded as amongst the best in the world, so Swiss practice merits consideration (I'd argue Swiss practice in revenue collection deserves consideration too!)

Swiss Federal Railways (SVV) KPIs from the their Punctuality and Safety Page

Of the Swiss Federal Railway's (Schweizerische Bundesbahnen or SBB) top three reported KPIs, the first looks superficially familiar (I'll come back to that) and the second and third look decidedly unfamiliar. That is because they do not relate to an arbitrary threshold, but rather focus on actual customer outcomes.

"Connections made" reports the proportion of interchanges between services that were able to made (i.e. not missed as a consequence of late running services). This captures the impact of lateness on a journey of which a single train trip is only one part. From a customer's perspective, a few minutes of lateness for one service can very quickly amplify if it means missing a connection with a half-hourly service.

"Gross passenger delay minutes" reports the actual total delay experienced by passengers. Not only is this an informative passenger-centric continuous value in its own right, it can also be used to evaluate the economic cost of lost productivity due to delay.

The headline KPI "customer punctuality" is defined as "Percentage of passengers who arrive on time or less than 3 minutes late". Though this looks similar to Sydney's On-Time Running, in the sense that it refers to performance against a threshold, it is actually very different in that it is reporting about punctuality of customers not trains. Whereas in Sydney a 7-minute late train carrying 1300 people is the same as a 7-minute late train carrying five people, in Switzerland it is all about the passenger.  Non-peak services can therefore not be relied on to dilute bad performance in peak periods.You can browse a full performance report in English here.

London, a more familiar city to Sydneysiders, also has informative practices when it comes to KPIs.

Extract from Underground (Transport for London) Performance Report for Period 12 2012-13

Though I would consider the first KPI in the table "customer satisfaction" fairly subjective, tube KPIs start with a similar focus to the SBB: passengers. The demonstrable evidence of the the Underground's customer focus is in the metric "Excess Journey Time" in minutes per passenger from system entry to exit. Again, like the SBB's Gross Passenger Delay Minutes, this is about the impact of unreliability on customers in a meaningful form. Transport for London (TfL) goes a step further than the SBB, including the impacts of ticket queues and station congestion. They explain here:

Excess Journey Time 
The Journey Time Metric captures service performance, related to demand, and expresses the information as average passenger journey time. For the purposes of the Journey Time Metric, each journey is broken down into its constituent parts namely access from station entrance to platform, ticket queuing & purchase time, platform wait time, on train time, platform to platform interchange and egress from platform to station exit.

London Buses also reports some interesting and noteworthy metrics. Aside from the focus again on actual quantified customer experience, there is a focus not only on how the system performs relative to its undertaking (i.e. the timetable), but also how good the service level of the undertaking is in the first place. This is demonstrated in the "Average scheduled wait" for high frequency services, telling us what the average waiting time for a passenger who just turns up at a stop, as distinct from someone who has turned up for a specific timetabled service. This should be equally applicable to Sydney's high frequency buses like the 380 and other trunk routes.

Extract from London Buses performance report for 2012-13

In summary these international practices have three important features

  1. They are customer focused (i.e. waiting time of customer, customer delay minutes not train-based)
  2. They recognise that customer experience is not of a train or bus in isolation, but an end-to-end experience, with time sensitive interchanges (i.e. between SBB mainline services "Connections Made" or tube services "Excess Journey Time")
  3. With a few exceptions, they are not based on arbitrary intervals which can be conveniently redefined

It would be a great step forward indeed if Sydney shifted to meaningful, transparent and actionable metrics like these. It would largely eliminate the "success theatre" such as that egregious Sydney Buses "reliability" example I opened this post with.

There may be an opportunity to even surpass these international examples, with a slight expansion of the same theme.

What should KPIs look like in transit?

Before suggesting the logical progression of these metrics, I'd just like to step back for a moment and re-establish what the important considerations are. How do we know time and timeliness is so important- are the SBB and TfL right to focus so much on time? What about air conditioning, escalators etc? There are indeed many factors influencing the choice to use transit and the level of satisfaction of that use.

Transport economists have spent years experimenting, hypothesising and testing what is valued by transit customers. These are the variables that drive mode choice, e.g. lead an individual to choose transit over their car.

In a classic transportation forecasting, travel time is the driver of mode choice and route assignment. This travel time between an origin and destination includes a sequence like the following:

  • Walking from your start location to the transit station
  • Travel Time
  • Time to walk to Interchange to another service
  • Waiting time
  • Travel time
  • Walking to your destination

More sophisticated analyses use the concept of Generalised Cost, but still the headline focus on end-to-end journey time remains the same. Fare price, comfort, interchange delay and weather exposure are some of the elements of Generalised Cost. (You can read more on the components of Generalised Cost and the general principles of economics of travel in TRL’s excellent 2004 publication “The demand for public transport: a practical guide”. Section 5.2 p39 are particularly relevant here).

We have to look no further than the building blocks of Generalised Cost- and of what customers value in revealed preference- to understand what the key aspects of value, utility and transit performance are. Metrics should therefore give insight into performance against these key parameters that constitute Generalised Cost and which drive the choice to use transit.

Time is the key driver of Generalised Cost and in turn transit mode share, but it is not timeliness in isolation on a single service or at a single point-- it is the total door-to-door transit system experience that matters.

While the metrics reported by TfL and the SBB are superior by virtue of capturing things like connections made, queuing time and service interchange delays, they do so within mode-based silos. Under integrated transit administrations, like Tfl, the ZVV and the new Transport for New South Wales, it should be possible to evaluate a service's contribution to global door-to-door travel time performance, not just a particular operator's performance within its operating silo.

For example, the criteria might remain the same "gross passenger delay minutes" or "excess journey time", but it can be evaluated over an entire multi-modal system. The technological limitations that once existed, requiring physical checking and sampling, can now be entirely automated using realtime data streams for passenger information. There is no longer a technological limitation to evaluating whole-of-system performance, while simultaneously filtering by operator, mode, time and geography to optimise into both a powerful management tool and the ultimate pricing performance benchmark.

Given the advantages that easily-manipulated KPIs give to various people in leadership positions, I don't expect there will be a hasty or willing transition. There is however some great news for most people. Let's face it, if you made it this far through this post you deserve some really great news.

Great News (unless you're covering your arse)

Within 5 to 10 years, irrespective of whether governments, authorities or transit operators reform their reported metrics, open access to real-time data will enable third parties, whether it be the Auditor General or a teenager in a garage or both, to compare and interpret real operating data with timetables to ascertain actual operating performance. While this may not tell us much more about air conditioning and crowding (the internet of things could change that a bit later), it will open up the headline performance metrics like "on time running" and "passenger delay" to broad scrutiny.

We are already starting to see static performance data (like service frequencies) represented in new meaningful ways using openly available tools and data.

A Google Heat map of Boston transit service levels from The Walking Bostonian

With both the New South Wales and Australian Governments committed to Open Data it is only a matter of time before live operating data can be comprehensively analysed and interpreted in new, beautiful and easily digested forms. Imagine the the above heat map as "Minutes of Delay Per Passenger between 0730HRS and 0930HRS". That is the future. Sydney Buses claims it has 99.95% reliability will become moot. So understandable, engaging and compelling will this data become that the political and managerial claims will have no choice but to become congruent with and address operating reality and the customer experience.

I'm planning to write more on huge implications that open data will have for transit in the next 20 years. In the meantime, if it's a concept that's new to you, aside from the above links this video provides a comfortable intro (with an awesome Phoenix sound track and Irish narration).


Sydney's transit metrics are poorly defined, subject to abuse, and do not represent aspects of performance that are relevant to customers. The Auditor General, Independent Pricing Regulator and NSW Business Council have all identified serious and unremediated flaws in Sydney's transit performance reporting. We do not know in a quantitative sense how Sydney's urban transportation is performing.

There are international practices that could be implemented providing an immediate improvement. There are opportunities to even advance the meaningfulness and usefulness of transit metrics further by developing measures that encompass customer experience throughout a door-to-door journey. Cities seeking to enhance their productivity and efficiency will continue to proactively develop and manage these.

Irrespective of whether governments, agencies and transit operators choose to take a proactive approach (like the Swiss SBB or London's TfL), availability of open operating data will within the next decade deliver a new era of performance awareness and accountability.

Wednesday, December 12, 2012


The Government of New South Wales (NSW) has undertaken to reintroduce trams to Sydney’s Eastern suburbs. For many stuck in traffic and contemplating lost productivity in the East this has been a long time coming. But few know just how long.

The NSW Liberal Party originally proposed its policy of a new light rail “rapid transit” system for Sydney's Eastern Suburbs in 1959.

I’m going to briefly describe what that policy was, its origin, and key differences with today’s policy.


In 1958, Sydney was in the middle of the post-war boom. Sydney was infrastructure rich, with major City building projects (like the harbour bridge and city electric railway) largely complete in the 1930s, and Waragamba Dam well under way.

But Sydney, like all western cities, was changing rapidly. Now attainable automobiles, cheap fuel, free road access and parking, meant that living near a tram or train line didn’t matter anymore.  It was the start of the sprawl era, when there always seemed room for one more car on the road. Put simply, the total cost of driving became much less than that of using transit. Formerly efficient, nucleated cities became dispersed, tangled, and car dependent, and transit patronage collapsed.

Australian mode share: Department of Infrastructure, Transport, Regional Development and Local Government, Information sheet 31

Trams had become the enemy of cars. They took up road space. (We now know that while trams moved 20,000 people per hour per lane, cars move only 1,200). They stopped to transact passengers. They looked and felt very, very old, with open sides in most, and no doors on the enclosed ones. They hadn’t reached trendy-old yet like San Francisco’s cable cars; they were more monorail-old. Yesterday’s solution blocking tomorrow’s progress.

The incumbent (Labor) Government had committed to shutting down the Sydney tram system, with significant closures in 1958.

However, there was far from political consensus. Even though Australia was amidst car-fervour, with a now 10-year old domestic auto industry,  some recognised that the tram system Sydney was getting rid of was in many respects different to the former systems of say Los Angeles and London.  There were street protests, then very unusual in Australia, to have the trams reintroduced, and these protests were successful to a very limited extent, such as in the case of re-introduction of trams to Watsons Bay after the first closure.

Unlike other cities' predominantly street-based systems, Sydney’s Eastern suburbs had a tram system that was substantially separated from road traffic. Dedicated corridors right out to extremities like La Parouse, Bronte and Coogee, meant that Sydney’s eastern trams enjoyed the kind of separation more familiar to rapid transit and metro systems.

Light rail trams on ANZAC Parade, Sydney in 1958 (source: J.R.Caldwell)

Light rail tram on dedicated corridor at Maroubra Junction, Sydney in 1958 (source: J.R. Caldwell)

This provided the opportunity to do something similar to what progressive North American cities like Toronto, Boston and San Francisco were doing. Take existing infrastructure, improve the city bottlenecks, and create a step change in passenger experience with new rolling-stock and faster services.

Of course this was in 1958, and most people had no idea what other cities were doing. Long before affordable international air travel (this was the year the first Boeing 707 was sold), only two years after the first broadcast TV in Australia, and 40 years before consumer internet.

One person I knew well did however have a very keen interest in international transport practice at this time. My late father, J.R.(Rob) Caldwell, at the age of 22, studying economics, and then Transport Officer of Sydney University’s Representative Council, devised a plan to re-invent light rail in Sydney’s East and South East.


What came to be billed in the media and by the Liberal Party as the “Caldwell Plan” (original here) was a plan to:

  • Retain all the physical tramlines and corridors to the eastern suburbs;
  • Bypass worsening CBD road congestion by going underground: extend Bradfield’s disused St James tunnel from under the War Memorial into Oxford Street, and then join a new cut-and-cover tunnel running beneath Oxford and Flinders streets to join the existing separated right-of-way; and
  • User experience technological step change: Replace all trams with PCC rapid transit trams, double the speed of existing trams, and double the speed of then existing buses (consistent with the Toronto experience).
There was also an (un-costed) but then plausible tunnel suggested as an option for analysis under Fitzroy and Foveaux Streets from Anzac Parade to Central Railway.

The currently disused St James tunnel under Sydney, proposed to be used to get "rapid transit" light rail out of city traffic

The "Caldwell Plan" map. Source: A Plan for Introduction of a Rapid Transit System for the Eastern and South Eastern Suburbs of Sydney, J.R.Caldwell, 1958

Though we take many of the then proposed innovations for granted it is worth contemplating what was proposed within the context of the time:

  • Wooden trams being replaced with aluminium and stainless steel (largely unseen in Australia at the time- the stuff planes and space rockets were made of), 
  • Air conditioning (the first car with air conditioning in Australia came about 15 years later, the first commuter bus almost 30 years later), 
  • Automatic doors (at that time none of Sydney's trains or trams had automatic doors, and buses had an open rear "platform" where passengers could- and did- fall straight out the back into traffic)
What might have been in St James disused platforms: PCC rapid transit trams in Newark Subway, NJ, USA (thanks Basil Hancock for the tip on this example. source:

The core functional aim of the plan was to reduce travel times to the East, make the journey more comfortable and appealing, and extend the life of assets that were otherwise unused, or proposed to be stranded or retired. The principle was that this would offer a far more attractive alternative to the private motor car than a motor bus.

Unusually for an unsolicited proposal from a 22 year old student, the then Labor Government undertook to review the plan in detail. You can read the (subsequently leaked) Departmental response to Cahill’s Cabinet here.

The bureaucracy, being the same one that had always advised that trams should be removed, was no different in opinion on this occasion, and sought to discredit the proposal by challenging rolling stock costs, and claiming that one-man operation was impossible (and thus operations costs were largely unable to be realised). In 1958 all trams and buses required both a driver and a conductor, the idea of a vehicle operated by a single person was a complete anathema to a political party aligned with the conductors' union.

It was perhaps for this reason that the "right", economically liberal, side of politics saw appeal in the plan. Increased productivity, lower operating costs.

Going from the unusual to the extraordinary, after the ruling Labor Cahill Government's rejection of the plan in December 1958, the Liberal opposition took up the plan as its policy centrepiece for the East.

The Liberal Party's 1959 campaign flyer for the seat of Bondi, showing the proposed light rail cars

Typical press coverage of the plan (Sun-Herald, 8th March 1959)

At this time, the Eastern Suburbs Railway had been indefinitely postponed. The Liberals successfully leveraged this to emphasise that the east was going to experience a transport downgrade with the removal of trams. However these electroal seats were ones that were dominated by the Labor party, and were always going to be a tough win.

The Liberals were defeated by Cahill, and the closure of the Sydney's trams and ripping-out of infrastructure continued as planned.

The former dedicated Bondi tram corridor,  with new blocks of flats built on it after its sale to developers (photo: J.R.Caldwell, 1972)

Subsequently, the Eastern Suburbs Railway, which the NSW Labor Party had contended in the 1959 election would serve the areas of the South East no longer served by trams, was never built to Randwick as proposed, and was only constructed part-way to Bondi Junction 20 years later.


Much has changed since 1959. Not the least of these changes were incremental Government sales of former transit corridors, including those to Bondi and Coogee, for property development.  Roads and parking have consumed most of the difference, with one small part left in the service of transit adjacent to Anzac Parade through the Showground and Moorepark precinct.

Similarly key depot and workshop space on the Eastern corridor, like Randwick Workshops, and South Dowling Street Depot (which housed 345 trams) were also sold for development.

These sales and redevelopments continued right up to the end of the previous NSW Government in 2010, with the redevelopment of the former Randwick Racecourse marshalling yards.

This presents significant additional costs and challenges. However several potential corridors remain, and the congestion cost and demand in the east today represents an insurmountable case that gridlocked buses have failed as a long-term solution. The policies of the 60s are now manifesting themselves in a less efficient and less liveable city.

It is interesting to compare Anzac Parade today with the scene previously. Gone are the trams transporting up to 20,000 people per hour. In their place, about 10 parked cars, transporting zero. meanwhile a bus stands stationary in traffic belching carbon emissions into the suburban air.

Anzac Parade today, parked cars stand where trams once ran (source: Google StreetView)


It is evident the geographic extent of today's proposal is less than the 1959 one (understandable given the loss of corridors),  but the key differences are less obvious.

The proposed routes enter the city at street level, and therefore are exposed to (and contribute to) intersection delays. The route is also some 2km longer than both existing bus routes and the 1959 proposal. The focus is presently travelling to Sydney Central Station, on the southern fringe of the down town area. The George Street (CBD) component of the line is presently envisaged as a "stage 2".

Sydney Light Rail Strategic plan options via Surry Hills (source: NSW Government
While this may provide an excellent rail connection service for students of UNSW and visitors to the Prince of Wales Hospital, it does very little to serve the full-fare and tax-paying, income generating workers commuting to and from the city.

It is interesting to contemplate how the focus has disolved over the course of 54 years. In 1959 the objectives were clear: shorter travel times, greater comfort, higher capacity. I'm not sure what the objectives of the present proposal are, but fundamental route configuration suggests it is none of these things. Longer CBD travel times, interchange inconvenience, and a capacity bottleneck in George Street are all likely impacts of the present proposal.

I'm looking forward to seeing the detailed evaluation. It's a blend of both the dispassionate operations engineer and sentimental curiosity in me, but I would have liked to have seen the 1959 policy at least considered as an option.

Sunday, August 26, 2012


Last week I read a blog by Australian Tosh Szatow criticising Collaborative Consumption  as an enabler of more mass consumption.  Though I don’t agree wholly with Tosh, I think there is some truth in his view. After developing and running YourJobDone in London for three years, I have spent a while experiencing and reflecting on some of those challenges.

Collaborative Consumption is broadly a phenomenon with positive outcomes. The social, mobile web is enabling connectedness- including connectedness of human needs and the fulfillment of them- in a way that was unimaginable even five years ago. But there is also a dark side to collaborative consumption businesses, some of which enable utilisation of assets (like apartments, cars and driveways) beyond conventional norms. This has the power to enable a Tragedy of the Commons 2.0 whereby every shared or public asset is exploited to the limit of its capacity.

Earling warnings are already in the mass media. Regulation in governments, councils, strata-boards and rental contracts are going to have to catch-up to deal with a new wave of exploitation of the common resources that enable our urban areas.


Collaborative Consumption (also known as CollCons) is an umbrella term devised by Rachel Botsman, co-author of “What’s Mine is Yours”, encompassing web-based marketplaces that have two components:

  • A targeted online-marketplace platform and 
  • sharing, community, social or trust framework for that platform.

A common example of such a marketplace is eBay. The fundamentals are an auction or listing platform with geographic filters and a feedback-driven trust system.

The same principle can be applied to buying, selling or borrowing anything: skills, a ride in a car, a short sublet, etc. The focus of the startup I co-founded, YourJobDone, was low skilled odd-jobs around London. Stuff like “assemble my Ikea cupboards” or “clean up my garden and mow my lawn”. YourJobDone was all about connecting geographic and temporal coincidence of mutually-fulfillable needs, in real time.

Collaborative Consumption: connecting needs in real time

We focussed on connecting people where we could deliver a genuine win-win. Where we could connect keen underemployed or unemployed people to jobs in their local area. We had great successes like this one. In that example, not only did an underemployed person get a job, cash, and a sense of satisfaction, the job got done very well at  great price, with very little travel and all tools carried on public transport (one less handyman’s van in Shoreditch, London!).

Many similar startups have followed, like Zaarly and TaskRabbit in the US, in the UK and AirTasker in Australia. You can check out current startups in different verticals here

CollCons has an aura of green values about it, because it is seen as a means to utilise existing resources better through sharing, and therefore reduce waste. It is a concept which has support from organisations like the UK’s NESTA.

With the rise of smart-phones and the social web, the foundations were laid for a new generation of web-based marketplaces, including CollCons, with vastly improved efficiency, reliability and trust facilitation.

Such is the existing and potential efficiency of these new marketplaces, whole new markets will be created where previously the friction of pursuing a transaction made  the transaction unworthwhile. Take a moment to look through the jobs currently posted on Zaarly, TaskRabbit or AirTasker and you’ll see what I mean. Ron Conway, the Silicon Valley superangel, early investor in Twitter and founding partner of Y-Combinator had this to say in November 2011:

“this whole concept of collaborative consumption is a multi-billion dollar brand new market”
 (From 1’16” here )

Putting aside concerns about safety and trust (problems which are solvable through engineering), there is a sinister side to Collaborative Consumption. Along with enabling true win-win transactions, CollCons also enables some resources to be consumed beyond normal or acceptable limits.

Who cares about the norm?

The norm, often perceived in startup and innovation circles as some stodgy, backward barrier to human development, I think is actually important to many people’s lives. It’s important to my life. For example, having other 8AM-to-5PM professionals living in the flat above me, rather than some back-packing Europeans on a holiday of regular all-night parties, is important to the amenity and sleep I enjoy.

We have as a society imposed on ourselves many laws and regulations to enforce a norm. There is an expectation of how capital (including space, tools, road capacity etc) will be utilised. Let’s delve into two specific examples on which there has been some recent discussion.

Short term lets

Platforms for short term lets, amongst which Airbnb is a pioneer, initially came under criticism for issues related to trustworthiness.

Can you trust the person whose place you’re staying at? is it safe? Paul Carr famously thought not, and defended New York City’s early move to try and limit Airbnb.

Can you trust the person who’s staying in your flat or house? Evidently not always. The trashing of one Airbnb user’s house was so bad and so mishandled that it came to be known by the tech press as “Ransackgate”.

These are surmountable problems. Though even eBay still has challenges with community trustworthiness after more than ten years of operation, it is clear that the foundations for comprehensive  inter-platform trust management are now being laid. Trust rating will no doubt become as significant as financial credit rating. The online world will become ever safer and more transparent, and I would venture, with the exception of first generation platforms that lack a trust framework (like Craigslist and Gumtree), are already safer and more reliable than offline market mechanisms.

Breaches of trust  have brought sensational  news headlines, but I think that is really a sideshow. What will matter in the long-haul is how these new, low friction, efficient web marketplaces enable a kind of asset utilisation that was not possible in the past. When you’re short of cash you can now put a bed in the sunroom and let it out, without the hassles of 2008.

But this is not just exploiting your own asset (your floor space). It’s also exploiting other people’s in a small way. That itinerant tennant, who isn’t too concerned about maintaining the amenity of the apartment block, also has a bike and isn’t too worried about leaving tyre marks on the walls of the stairs. That 2AM party meant the doctor next door lost sleep and later concentration during surgery the next day. That extra person living in the sunroom is wearing out the carpet and bathroom fittings 50% faster than the two people who the landlord thinks are living in there.

The impact is real, and as the New York Times recently reported, there are even vigilantes scouring the pages of airbnb for people subletting in their appartment blocks.

Driveways and parking

Offering up your home garage or parking space seems superficially like the an ideal application for Collaborative Consumption. Unlike say having a stranger stay in your house, the potential for a personal property or safety risk seems very low. It looks like a victimless win-win. My driveway is free while I’m at work, you need a parking spot, you give me money to use it. Easy.

But if we dig a little deeper, we realise the money that comes from leasing out a driveway is not just about using something that wasn’t used, it can be about using something more than it was intended to be used.

Parking availability control is often used by town planners to indirectly regulate the cost to the individual driving. Limiting parking spaces in cities and nearby areas is a key control to limiting driving by making its cost greater (whether direct,  like parking station costs, or indirect like more difficulty and time spent looking for a park). Cities like London and Sydney strictly regulate the availability of parking, as a proxy to control traffic congestion. Even municipalities in suburbs outside cities can ban new additional parking- like the Municipality of Waverly in Sydney. If you buy a house in Bondi  (in that municipality) with no driveway or garage, you cannot build a new driveway or garage.

The existing relationship between parking availability and traffic regulation is a consequence of historical norms. A typical suburban driveway has one car leaving in the morning and returning at night. If, as a consequence of the new market enabled by web-based marketplaces, now a second person (car) can use that driveway during the day, that is, C.p., double the utilisation of the road system for that single driveway.

The act of leasing a home driveway during the day, where parking is otherwise unavailable, does not just enable the utilisation of the driveway, but the whole road network from origin to destination, at the cost of everyone to some imperceptible extent. It bypasses society’s efforts, realised through town planners appointed by democratically elected officials, to manage road utilisation and traffic congestion. If you want to know more about why traffic is regulated by restricting availability of parking there are many resources on the web, but I would also recommend getting a copy of the seminal town-planning work “Traffic in Towns”, authored by Collin Buchanan and others.

Many people in the Australian startup scene have rushed to the defence of parking space letting platform ParkingMadeEasy, recently criticised by a mayor of an Australian municipality. It is clear however that this is an area in which Collaborative Consumption platforms are enabling more consumption, more fuel burned, more traffic congestion. Importantly, it is more consumption at the expense of external parties, through the increased utilisation of The Commons, not just the driveway.

Though they haven’t done a great job expressing why this is a problem, as with the short-lets, the affliction motivating the vigilantes and community complaints is utilisation of assets beyond long-established norms, with a flow-on impact on The Commons and amenity.

Imperceptible Increments Amount to a Dire Whole

At the moment while these platforms remain in the “early adopter“ stage, these are issues are on the fringe. Resistance to this utilisation of driveways beyond established norms is, as with short lets, as nascent as the collaborative consumption movement itself.

It is much like automobile traffic congestion on the fringe in the 1930s. No one can perceive the impact of their one extra car in a traffic jam of 20,000 cars. Yet somehow over the decades each of those imperceptible increments adds up to a crippling whole. No one can perceive the impact of that one little bit of marginal utilisation, but somehow it will always add up.

Always room for a bit more utilisation: San Francisco Bay Bridge morning peak (Source J.R.Caldwell/ GE)
Always room for a bit more utilisation: San Francisco Bay Bridge morning peak c-1959 (Source GE) 


Collaborative Consumption is having a positive transformational impact, enabling superior allocation of resources and less waste. But it also has a sinister side, enabling a market for utilisation of personal and collective assets beyond established norms, thereby enabling some to profit from disproportionate exploitation of common assets.

Startup warriors have become accustomed to disrupting and battling inefficient incumbent businesses in all spheres of human enterprise.  Anyone who has ever worked on a startup is eager to offer their support to "The Man in the Arena”. But I think when the protest is coming from the community (not from incumbent businesses defending their turf), it’s time to pause, listen to the objections, and consider whether we are doing the right thing.