Covid-19 and optimal urban transport policy

Covid-19 has important implications for public transport operations. Increased teleworking and the perceived infection risk on public transport vehicles have drastically reduced demand in many cities. At the same time, physical distancing has effectively reduced available peak-period public transport capacity. In this paper, we use a simple model to study the effect of these changes on second-best optimal pricing and frequency provision, assuming that car use is underpriced. A numerical application reflecting the public transport situation in Brussel is provided. Results include the following. First, more telework and the increased perceived infection risk have opposite effects on the fare, so that it may be optimal not to change the fare at all. Optimal frequency is likely to decline. Second, holding the fare and frequency constant at their pre-Covid second-best optimal values, more telework reduces the public transport deficit if car use is underpriced. Third, extending the model to allow for passengers with different vulnerability towards Covid-19, allowing fare and frequency differentiation implies that vulnerable users will face higher fares only if their risk perception is sufficiently higher than that of the non-vulnerable, and car use is not too much underpriced. Occupancy rates will be lower for the vulnerable passengers. Fourth, the numerical results for Brussels show that telework and a high perceived infection risk for workers may yield a welfare optimum whereby commuters do almost not use public transport. Offering a low frequency suffices to deal with the captive demand by school children and students. Lastly, reserved capacity for the vulnerable users and stimuli for walking and biking to school may be useful policies to deal with the crowding risk.