Rethinking Fares, Not Frequency: How Peak and Off-Peak Pricing Can Transform Public Transport

Rethinking Fares, Not Frequency: How Peak and Off-Peak Pricing Can Transform Public Transport

It is 7:08 on a grey November morning. The rain has just started. You are standing shoulder to shoulder on a packed bus as people try not to breathe too heavily. Now imagine the same vehicle, just two hours later: seats half-empty, the ride quiet and calm.

This scene plays out daily in cities around the world. Peak hours strain infrastructure, while off-peak services often run below capacity. For public transport operators, this imbalance leads to rising costs, underused resources and dissatisfied passengers.

The question is not new: How can we better manage demand? But the solution no longer lies in simply adding services or upgrading infrastructure. With today’s digital tools, we can take a more dynamic approach: starting with how we price the journey.

“With the FAIRTIQ app, operators can introduce and test new pricing strategies in real time, without touching existing infrastructure or disrupting operations.”
Felix Urban, Product Owner at FAIRTIQ

The Promise of Peak and Off-Peak Pricing

At its core, peak/off-peak pricing offers lower fares during less busy times and higher fares—or standard pricing—during periods of high demand. This pricing logic is not new, but it is underutilised in short distance and commuter public transport due to technical, political or operational constraints.

Yet research confirms the approach is promising:

• A case study of Stockholm demonstrated that peak-load pricing can improve both network performance and financial outcomes. In a simulation where peak fares were increased and off-peak fares reduced by 26%, off-peak ridership rose by 9%, overall passenger numbers grew by 1%, and total revenue also increased by 1%.
• A London Underground study found that off-peak pricing influenced evening travel behaviour, with a clear drop in ridership observed when peak fares began. This suggests that fare-sensitive travellers were willing to delay journeys to save costs. The effect was less visible in the morning, where fixed schedules limited flexibility.
• A case study in Melbourne (DoT Victoria) analysed discounts for off-peak train travel and also concluded that, while it is difficult to flatten passenger numbers throughout the day, it is promising to reduce evening peaks through a combination of peak and off-peak pricing strategies.

Still, discounts alone do not drive change. Success depends on how well the offer is designed, tested and communicated. When done poorly, it leads to confusion and distrust. When done well, it can shift habits and build long-term confidence in public transport.

Why Operators and Travellers Both Win

Public transport should be efficient, accessible and attractive. Peak and off-peak pricing supports these goals in several ways:

• Reduced Overcrowding: By incentivising riders to travel outside rush hour, pressure on the network is eased. This improves the passenger experience without adding more vehicles.
• Operational Efficiency: Smoother demand curves allow for better resource allocation. For example, there is less need for temporary fleet expansions or staffing surges.
• Revenue Growth: Offering discounted fares during off-peak hours attracts price-sensitive groups who might otherwise avoid public transport altogether.
• Traveller Empowerment: Off-peak pricing rewards those with flexible schedules, encouraging more intentional travel choices and increasing perceived value.

This approach is not about penalising peak-time travel. It is about offering choice and making public transport work smarter for everyone.

Denmark’s Digital Leap with Rejsekort

Denmark is one of the most recent examples of evolving from physical to digital fare models. The Rejsekort system initially offered off-peak discounts via physical smartcards. In 2024, this was extended to the Rejsekort app, which now applies a 20% discount automatically during off-peak hours (weekdays 11:00–13:00, 18:00–07:00, plus weekends and public holidays).

This shift makes the pricing model not only more accessible but also scalable.

Finding the Sweet Spot

Time-based pricing is powerful, but only when calibrated well. If the incentive is too weak, it will not change behaviour. If it is too strong or poorly timed, it may simply shift overcrowding from one peak to another. The goal is to flatten the curve without creating new spikes.

This is why experimentation matters. Finding the sweet spot requires testing different thresholds, segments and time windows to see what works in a specific network context.

“Piloting fare models in a controlled environment gives operators the clarity they need, before committing to a system-wide change.”
Luise Rohland, CPMO & Behavioural Economist at FAIRTIQ

Making it Work: Communication is Key

Of course, even the smartest fare strategy will fail without transparency and trust. Riders need to understand:

• When off-peak times apply
• What discount they receive
• How the pricing benefits them

Digital tools can support this through clear onboarding or in-app messaging. What matters most is consistency, clarity and fairness.

Conclusion

The challenge of peak-hour congestion is not going away, but our response can evolve. Peak and off-peak pricing is not a silver bullet, but it is a proven and increasingly accessible lever for rebalancing demand, unlocking capacity and empowering more equitable mobility.

With MPAYG solutions like the FAIRTIQ app, transport operators have the tools to lead this change: Responsibly, efficiently and at pace.

Curious how peak and off-peak pricing could work in your region?

Let us explore the possibilities together. Contact our FAIRTIQ team to learn more.