Free Tram Zone, Melbourne

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Melbourne's Free Tram Zone is a designated area within the city's Central Business District (CBD) and Docklands where tram travel is completely free of charge.
What are the main aims and objectives?

The Free Tram Zone in Melbourne was introduced with several key aims and objectives. Primarily, it was designed to encourage the use of public transport within the central business district (CBD) and Docklands area, making it easier for both locals and tourists to move around the city center without cost. The initiative aims to enhance the livability of the CBD, reduce short-distance car trips, and alleviate traffic congestion in the city core. Additionally, the Free Tram Zone serves as a unique selling point for Melbourne's tourism industry, attracting visitors and enhancing the city's reputation as a tourist-friendly destination. It also aims to improve accessibility to key locations within the zone, including major attractions, shopping areas, and business districts. By removing the need for ticketing within this area, the system seeks to streamline tram travel, potentially reducing boarding times and improving overall service efficiency.

While the Free Tram Zone in Melbourne was not primarily designed with entrepreneurship and startups in mind, it does offer some indirect benefits that could support these sectors. The zone aims to enhance the livability and accessibility of Melbourne's Central Business District (CBD), which can create a more attractive environment for startups and entrepreneurs to establish their businesses. By providing free transportation within the city center, it facilitates easier movement for professionals, potentially fostering networking opportunities and improving access to business districts and coworking spaces. Additionally, the Free Tram Zone contributes to Melbourne's reputation as an innovative and forward-thinking city, which may help attract talent and investment to the startup ecosystem. 

How does the program work?

Melbourne's Free Tram Zone is a designated area within the city's Central Business District (CBD) and Docklands where tram travel is entirely free of charge. This initiative was introduced to encourage the use of public transport and provide an accessible way for both tourists and locals to move around the city center without any cost.

Within the Free Tram Zone, passengers can board and exit trams without the need to touch on or off with a Myki card, which is Melbourne's public transport ticketing system. As long as your entire journey starts and ends within the designated zone, you can travel for free. The boundaries of the zone are clearly marked, typically including La Trobe Street to the north, Flinders Street to the south, Spring Street to the east, and Spencer Street to the west, with an extension into the Docklands area.

To use the Free Tram Zone, passengers simply need to board any tram at a stop within the designated area. Tram stops within the zone are clearly marked with signage, and there are usually announcements on the tram when approaching the zone's boundaries. It's important to note that if your journey begins or ends outside the Free Tram Zone, you must touch on with a valid Myki card when boarding the tram.

What is the overall cost?

The current Free Tram Zone results in a revenue loss of approximately AUD $10 million to AUD $13 million per year.

How was it implemented?

The Free Tram Zone (FTZ) in Melbourne was created as a public transport initiative introduced on January 1, 2015, following the 2014 Victorian state election. It was implemented as part of an election promise initially proposed by the Coalition government and later matched by the Labor Party, which won the election. The policy aimed to make public transport within Melbourne's Central Business District (CBD) and Docklands more accessible and affordable for both locals and visitors, encouraging greater use of trams in the city center.

The creation of the FTZ was motivated by a desire to reduce barriers to public transport, promote tourism, and support businesses in the CBD by facilitating easier movement. The zone covers key areas within the CBD grid, bounded by Flinders Street, Spring Street, La Trobe Street, and Spencer Street, as well as parts of Docklands and Queen Victoria Market. The initiative was designed to allow free tram travel entirely within this area without requiring passengers to use Myki cards. This policy was also intended to streamline travel for short trips within the city center while enhancing Melbourne's reputation as a tourist-friendly destination.

The FTZ was implemented under the management of Yarra Trams, the operator of Melbourne's tram network. Its introduction marked a significant shift in public transport policy, reflecting broader goals of improving urban mobility and reducing reliance on cars in the city center.

What impact has been measured?
  • Modeling suggests the City of Melbourne reaps about $300 million per year in added tourism dollars from the CBD tram zone
  • The initiative has been found to be popular, with an extra 19.2 million trips on Melbourne's tram network in the year following its introduction
What lessons can be learned?

The implementation of the FTZ has revealed several unintended consequences:

  • It may encourage some people to drive to the edge of the free zone, potentially increasing traffic congestion in certain areas.
  • The initiative has disproportionately benefited tourists and CBD residents, while potentially taking resources away from improving services in outer suburbs and regional areas.
  • Some passengers with mobility needs have experienced difficulties boarding overcrowded trams.

CURATED BY

Simona Bielli

Research Programme Coordinator – Digital Startups
Nesta
United Kingdom