Affordability and subsidies in urban public transport: assessing the impact of public transport affordability on subsidy allocation in Cape Town

Piek, Jaco (2017-12)

Thesis (MCom)--Stellenbosch University, 2017.


ENGLISH SUMMARY : Cape Town is characterised by high commuting costs and high travel times due to a spatial mismatch between housing and jobs, as a result of apartheid planning policies. This dissertation investigated the use of an Intra-City Affordability Index to better understand this mismatch by analysing transport expenditure and potential travel patterns of public transport commuters in Cape Town. The results from the constructed affordability index analysed public transport affordability within this context. In turn, the potential subsidies needed to achieve the 10% policy affordability objective for public transport users in Cape Town, were estimated. One of the main research objectives was to determine the contextual public transport affordability for Cape Town through the construction of an Intra-City Affordability Index. This was done for two different income levels: low to low-medium income and average-income. One of the other main research objectives was to estimate the extent that improved affordability of low to low-medium income commuters affects subsidy requirements. The Intra-City Affordability Index was contextualised to Cape Town by incorporating household socio-demographics, the built environment and relevant policy conditions. Furthermore, the relationship between current public transport affordability levels and potential additional subsidies required to achieve the policy affordability objective was investigated. Lastly, a sensitivity analysis was done using bandwidths of income and affordability levels to test the robustness of the subsidy impact results. The main findings from the Intra-City Affordability Index showed that, overall, lower-income households spend well over 10% of their income on commuting, with some households potentially spending up to 42% of their income on public transport. It was also found that commuting to Cape Town CBD is more affordable than other employment centres, indicating that the transport system has not adapted to serve other employment centres since apartheid. Furthermore, the subsidies required to attain the 10% affordability benchmark were shown to be unfeasible and unrealistic.

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