Tarification #4: How transport pricing policies can help control urban spread

Our series of 5 articles on pricing continues with the analysis of Aurélie JEHANNO, Mobility Director, and Timothée COLLARD, Mobility Consultant, both from the SYSTRA France Consulting & Planning Department. This week they look at the contribution of public transport pricing policies to controlling urban sprawl.

Mobility as a Service, referred to as Maas, cannot be developed without addressing the issue of transport pricing, or mobility in general. This is not a new issue, but it is even more pertinent in the context of the health crisis, with operators hard hit, user behaviour becoming both more demanding and unpredictable, and mobility less routine. So what fare policy should be adopted? How can profitability and efficiency, flexibility and sustainability be reconciled? Can a pricing policy be a lever for managing crowds in transport networks? Can pricing have an impact on urbanisation and the shape of the city?

We asked our experts these questions. From Australia to Brazil, via Asia, the UK and France, our international network of consultants worked together to answer them. For a month, we shed light on the subject, informed by local experiences.


Urban sprawl is a worldwide concern, even if realities are somewhat diverse in different continents. Indeed, over the last decades, urban areas have expanded on average twice as fast as urban population growth [1]. In the context of the fight against climate change, land consumption is an important parameter for both mitigation and adaptation matters.

Indeed, many studies highlight the effects of urban land expansion on:

  • the decrease of biodiversity through habitat fragmentation, soil sealing, competition with other uses especially agriculture (direct effects);
  • the increase in distance and length of trips, rise of car dependency and thus higher CO2 and local air pollutant emissions, as well as impacts on human health (Indirect effects).

These concerns are critical knowing that urban spread is faster in low elevation coastal zones, putting millions of people at risk.

Transport organization and network design are often quoted as a powerful ingredient to understand urban development dynamics. In particular, several research studies have shown that extensions of transport infrastructure have driven households to move further away and increase their travel distances rather than sparing time as sometimes expected by local authorities.

Therefore, creating or developing new transport infrastructure becomes at the same time the cause and the consequence of urban spread, especially roads that enable loose urban development.

On a measurable scale, the choice of the distance between the place of residence and the workplace is linked to three variables: real estate prices, financial cost of transport and travel time. Implicitly or not, households will look for a balance between these three variables to decide the home location (and for their workplace, although other variables are considered in this case). High rents around workplaces will encourage households to move further, even if it means a higher daily cost and longer travel time. In European cities, the higher population density around train stations illustrates this trend.

[1] Over the last decades urban population at national levels has doubled while total urban area has quadrupled. , Citation: Seto KC, Fragkias M, Güneralp B, Reilly MK (2011) A Meta-Analysis of Global Urban Land Expansion. PLoS ONE 6(8): e23777. https://doi.org/10.1371/journal.pone.0023777


If transport pricing is one leverage to control urban spread, it is necessary to highlight that it is not a magic wand. Some conditions must be contemplated to efficiently mobilise this leverage:

1. Pricing transport must be considered in a multimodal approach [2], both used as an incentive for less land consuming modes and cleaner uses such as public transport, walking and cycling and a tool to internalise external costs of other modes (road pricing mechanisms, parking, congestion charge…). When taxes are contemplated, the existence of real transport alternatives is necessary.

[2] Who pays what for urban transport? AFD, Codatu, 2009 with SYSTRA Support

2. Mobility pricing is a very sensitive component of public policies and needs sound legitimation from civil society.

For instance, congestion charges, rises in public transport fares or taxes on fuel can lead to strong social outcry as was the case [3]:

  • in France with the ‘Yellow vests’ movement in 2018 after a carbon tax on fuel was voted;
  • in Chile, with the rise of fares for metro tickets, in 2019 that sparked a long social protest movement;
  • more recently, in Lebanon, or Algeria with the rise of fuel price.

[3] Context studies and specific skills in territorial dialogue are necessary: https://www.systra.com/systra-enrichit-ses-expertises-en-france-grace-a-lacquisition-de-cs-conseils/.

3. Assess the efficiency of pricing strategy within the whole policy mix using econometric models.

Indeed, some measures can have very low impacts on urban sprawl due to low elasticity and others can be more efficient depending on local characteristics. For instance, a French publication from the French Ministry for the Environment shows that in the long term, the implementation of a charging system around Paris could lead to a reduction by 7% in land consumption, while the implementation of a flat fare for public transport shows an increase of 7% [4].

[4] « Politiques de tarification des transports et formes urbaines » – Ministère de l’Environnement, de l’Energie et de la Mer – 2015

4. Urban spread isn’t the only factor of choice for fare structure which should be linked to other social and environmental goals.

For example in Paris Region, transport authorities decided in 2015 to change their zonal fare structure (Public transport network) for a flat fare structure in order to increase the ridership and promote social equity.

5. Fare planning to control urban spread can be efficient when it coincides with other measures to regulate real estate markets and capture land value induced by transport infrastructure.

Transit Oriented Development mixing infrastructure development and land value capture are alternatives that need to be developed. Results from a study we carried out for the Paris Region authority confirmed the effects of heavy transportation systems on real estate prices [5] and we are helping CDPQ in Montreal in order to optimise this value capture around the incoming metro system and some of its stations [6].

[5] Paris region authority, Impacts of transport infrastructure on territories, 2012 with SYSTRA support.

[6] The Infrastructure subsidiary of the ‘Caisse de Dépôt et de Placement du Québec’ (CDPQ) has entrusted SYSTRA’s teams with an assignment to develop the land and urban functions around the future stations of the new automatic light metro line of the Duroy project, and in particular the Viauville station.

To conclude and draw perspectives, recent developments around MaaS systems are promising, as they can help to integrate pricing in a multimodal approach.

It will then be crucial that local authorities finely tune these parameters in order to comply with their overall objectives especially their fight against urban spread and climate change consequences.

Join our experts from SYSTRA Australia next week for the final article in the series on “How to make transport cleaner”.

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