Part-time workers could save hundreds of pounds a year after Mayor Boris Johnson overhauled London’s fares system to recognise modern working patterns.
More than 20% of Londoners work part-time, with many more working from home some of the week or facing unpredictable working hours which makes a weekly travelcard unsuitable.
This means many in these groups use Oyster Pay As You Go which, although subject to a maximum daily cap, is more expensive than buying a travelcard.
The Mayor and Transport for London have been under increasing pressure from London Assembly members to introduce a new three-day travelcard to help irregular travellers enjoy the same savings enjoyed by regular commuters.
Today Mr Johnson went further than expected and announced that the maximum daily Oyster fare will be capped at one-fifth of the price of a weekly travelcard, a move which benefits all passengers regardless of the number of days they travel.
The change means the zone 1-2 daily cap will fall from £8.40 to £6.40, a potential saving of £270 a year for those travelling three days a week.
Passengers travelling from zone 5 could save up to £661 per year when their daily cap falls from £15.80 to £10.90.
Announcing the lower caps, Mr Johnson said: “By overhauling our fares structure we will put money back into the pockets of hundreds of thousands of hardworking people who make such a vital contribution to London’s economy.”
The change will cost TfL around £20m which it will recoup by raising the price of paper season tickets, with the all day 1-4 Day Travelcard increasing from £11.40 to £12.00 and the off peak 1-5 Day Travelcard increasing £8.90 to £12.00.
TfL says it expects around a quarter of One Day Travelcard will move from paper tickets to Oyster or contactless in 2015.
Customers who return their card within a month of purchase will now pay a £3 admin fee which the organisation hopes will encourage more people to keep their cards for future use, helping reduce the costs associated with issuing cards and processing refunds.
The cost of a 16+, 18+ and 60+ Oyster photocard will rise from £10 to £20 while the charge for the under 16 card will increase from £10 to £15.
TfL says each of the passes will be valid for longer, meaning users will pay less over the lifetime of the card when compared to the current annual renewal cost.
Responding to complaints that axing cash bus fares has caused difficulties for visitors to the capital, the One Day Bus & Tram Pass which was abolished in 2009 will be re-introduced.
Costing £5, the pass will be available from the Oyster retail network, Travel Information Centres, London Underground, National Rail stations and Heathrow Airport.
The changes outlined today form part of the Mayor’s annual fares decision.
Overall fares will rise by 2.5 per cent, July’s rate of inflation, although rounding means some individual fares will be just above or below this figure.
The pay as you go single bus fare will increase by 5p to £1.50 while single pay as you go Tube fares will increase by 10p. Off peak single Tube fares outside Zone 1 will be frozen.
Mayor Johnson said: “Freezing overall fares in real terms for next year allows us to hold down the cost of travel, while maintaining our vital programme of modernisation.
“This will ensure that the capital remains a competitive global city and a fantastic place to live.”
The Mayor’s announcement has been welcomed by Janet Cooke, chief executive of passenger watchdog, London Travelwatch.
Cooke said: “We are pleased that the Mayor has recognised that many people in London are finding it hard to bear continued fare increases.
“It is also good news that TfL will be lowering the daily Oyster PAYG fare cap to help those who work part time, removing the need for anyone working five days or fewer to buy a weekly Travelcard to get the cheapest fare.”
However the watchdog warned that the £3 admin fee for Oyster returns “could particularly disadvantage those on low incomes or with large families or those who do not have bank cards to make contactless payments.”
Liberal Democrat AM Caroline Pidgeon said the Mayor deserved no credit for limiting the increase to 2.5% as the rise “would have been even higher if the Treasury had not stood in” and provided extra cash.
She added: “This hike in overall fares exceeds any rise that most people will see in their payslips, just as has been the case for a number of years under his Mayoralty.”
However she welcomed the lower daily fares cap, commenting: “The one small bit of hope is that finally TfL have recognised that the days when they can fleece part time workers and people who work flexibly must now come to an end.”
The measure has also been welcomed by business lobbying group, London First.
David Leam, Director of Infrastructure, said: “More and more businesses are encouraging staff to work park-time or flexibly and London’s transport system needs to reflect that.
“This could particularly help lower paid staff for whom travel costs make up a large proportion of their income.”
Green party AM Darren Johnson said the lower daily caps “will be very welcome news for the growing number of Londoners having to make do with part-time jobs.”
He added: “But for full-time commuters and occasional travellers, Boris’ seventh fare hike in a row will be a bitter start to 2015.
“While he has pushed fares up, the cost of motoring has been falling. To save London from a future of congestion and pollution, the Mayor should be bringing in a London-wide pay-as-you-drive charging system, which could fund a big expansion in public transport and a cut in fares.”
Conservative AM Roger Evans said: “Cutting daily Oyster fares for millions of part-time and home workers delivers this and is a real policy helping real people.”
However he called on the Mayor to “go further to bear down on fares for everybody by completely reforming TfL and cutting waste.”
Mr Evans added: “Let’s get on with fast tracking the introduction of driverless trains, introducing sponsorship on the Tube, and scrapping free travel passes for friends and flatmates of TfL staff.
“These costed policies would save hundreds of millions of pounds a year, more cash that can be put back into the pockets of Londoners.”
Sue Terpilowski, London Policy Chair at the Federation of Small Businesses, said: “We welcome the announcement by Transport for London and the Mayor today to cut fares for more ‘occasional’ users into the Capital.
“The number of part-time roles in small businesses has increased significantly over the past six years.
“A recent survey by the Federation of Small Businesses showed that 79% of London businesses felt that the availability and cost of public transport had a significant impact on the success of their business.
“Initiatives to make the cost of travel cheaper will help employees and employers, helping retain staff from outside Zones three and four.”
London Assembly Labour Group Transport Spokesperson, Val Shawcross, said: “The announcement of a lower daily cap will be welcome news for Oyster Pay As You Go users and corrects an unfair anomaly which means people in part-time or flexible work have had to pay more.
“With more and more people choosing to work flexibly, it is about time the Mayor is taking action to offer fair fares to people who don’t work Monday to Friday.
She added: “For travelcard users though the impact of the 2.5% rise in fares next January will be to put even more strain on those already struggling to cope with living costs far outstripping wage growth.
“The truth is that despite pledging to keep fares low Boris Johnson has overseen a 40% rise in fares since he became Mayor, that’s meant Londoners paying fares 13% above inflation over the six years.”