Germany Sets the New Standard for Cheap, National Mass Transit

(Bloomberg) — Germany will start one of the most affordable public transit offers anywhere in the world on Monday, setting a new benchmark to encourage consumers to ditch their cars and putting pressure on Berlin to make the shift work.

For just €49 ($54) a month, holders get unlimited travel on all city buses, subways and trams in every municipality across the country. That means with one ticket — which breaks down to less than the cost on one espresso a day — you can ride buses along the shores of Lake Constance on the Swiss border and traverse Hamburg’s harbor on the North Sea.

Local and regional trains are included in the so-called Deutschland-Ticket, but not faster intercity services, as the idea is to encourage people to re-route short-distance travel. 

The pass builds on the popular 9-euro ticket that was introduced last summer to help manage the energy crisis triggered by the war in Ukraine. While the new offer is notably more expensive, its proposed run of at least two years far exceeds its predecessor’s three-month trial and indicates public transport is becoming a component of national policy rather than just a local service. 

Read more: All Aboard Germany’s Gas-Saving Summer of Super-Cheap Trains

As part of the rollout, Chancellor Olaf Scholz on Thursday visited a bus depot in Berlin, throwing his weight behind the plan but also tying his reputation to its success. 

The shift is sorely needed as the home of BMW, Mercedes-Benz and Porsche has struggled to make much of a dent in transport emissions. The sector has regularly missed targets for reducing carbon dioxide output and is well off the pace needed to nearly halve pollution by 2030.

The new ticket — available only by subscription — is priced well below normal monthly rates. To offset initial estimates of lost revenue, the federal government will provide €1.5 billion a year and Germany’s 16 states have agreed to contribute the same amount. Any additional costs will also be split. 

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The plan though doesn’t include investment in more services, which will likely limit its impact, according to Philipp Kosok, a public transport analyst at think tank Agora Verkehrswende.

“There is currently not one euro earmarked for expanded operations,” he said. “We need a prioritization that says rail before road. We don’t currently have that in German politics.”

Despite the criticism, agreeing on the ticket was a major political act for Scholz’s government. It involved getting more than 60 transport authorities to accept a digital-only ticket, a revolution for Germany where paper slips are often still the norm. 

Read more: Germany’s Ultra-Cheap Train Ticket Saved 1.8 Million Tons of CO2

Germany’s transit systems generally don’t have turnstiles to control access. Passengers can hop on and off, but there are spot controls and fines for not having a valid ticket can be steep. In some regions, local operators don’t have the technology to read chip cards or scan apps and may still demand printed proof. This may help kick-start a broader upgrade.

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“The Deutschland-Ticket is an important step, which ultimately can help get more consumers onto trains,” said Naren Shaam, chief executive officer and founder of Omio Group, an online travel comparison and booking site. “It’s also proof that an interconnected, simplified transportation network is possible in Germany.”

For commuters like Claudia Jutz, it’s a rare instance of getting more for less. “It’s a huge savings,” said the 47-year-old billing clerk, who previously paid over 180 euros for a pass from her home on the outskirts of Munich.

Jutz was one of dozens of would-be buyers in a queue that snaked its way some 80 meters (nearly 90 yards) through a transit station below the Bavarian city’s famed neo-gothic townhall. Armed with more travel freedom, she plans to visit nearby Salzburg in Austria with a friend, “which is something we wouldn’t have done otherwise,” she said.

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That’s one of the criticisms. The flat rate encourages people to take more leisure trips, adding stress to Germany’s already-overloaded networks. Last summer’s ultra-cheap offering led to widespread disruptions as passengers crammed into trains and buses. This time, operators anticipate less of a crush. 

“We don’t expect more passengers all of a sudden from one day to the next, as was the case with the 9-euro ticket,” said a spokeswoman for national rail operator Deutsche Bahn AG. “We’re assuming a noticeable, steady increase in demand,” including more traffic on weekends. 

The impact of the ticket could ripple through to other countries by taking the potentially radical step of positioning transit systems as a public good to which all deserve affordable access. It could also be a model for others in the European Union, as the bloc aims to become climate neutral by 2050.

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“Reinforcing the use of railway is an important priority for European governments,” Gonzalo Cantabrana Fernandez, a senior director at S&P Global.

But the impact might be modest in the near term. Germany’s unreliable train system serves as a disincentive for many consumers. On top of that, the lack of service in the countryside means people there are all but shut out. 

Read more: Germany’s Beleaguered Rail Network Set for $14 Billion Overhaul

“In rural areas, the willingness to buy a Deutschland-Ticket is low,” said Katharina Luca, a spokeswoman for German auto club ADAC, which surveyed members and found just 15% plan to use it. 

Germany’s also not using all the resources available. Private services like Omio aren’t able to sell the ticket, and Deutsche Bahn-rival Flix SE lobbied the government to have its intercity bus services included, but fell short. 

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Germany’s transport system has been a source of tension as climate activists regularly block traffic to protest the sluggish progress on green goals. Meanwhile, the ruling coalition is at odds over plans to expand the country’s Autobahn network.

For fear of undermining the auto industry — a cornerstone of Europe’s largest economy — some officials are signaling that the car remains the top dog. Transport Minister Volker Wissing even made the improbable suggestion that the 49-euro ticket could be given to everyone who buys a new vehicle.

While the simplicity of the offering will help, Germany still needs to focus on service to truly reduce road traffic, according to Andreas Barth, head of the Munich chapter of German passenger lobby Pro Bahn. 

“The Deutschland-Ticket doesn’t increase the number of trains,” he said. “But it is a step in the right direction.”

—With assistance from Iain Rogers.