Fares are set to rise for an on-demand bus service in Tauranga, despite its popularity.

From 2025, the adult fare will be $5 per trip or $4 for those with an electronic Bee Card.

The current adult fares are $3.40, reduced to $2.72 with a Bee Card per trip which is standard across the bus network.

While the service is popular with its users, the average cost per passenger is about $28 and the council wants to ensure the service remains “financially viable”.

Bay of Plenty Regional Council manages public transport in the region and started the Baybus OnDemand trial in Tauranga South in March to enhance public transport flexibility and sustainability.

The $1.9 million trial came with “unique costs”, the council’s public transport director Oliver Haycock said.

Bookings for the on-demand service can be made through an app or over the phone. Photo / Bay of Plenty Regional Council

The operating costs were within projections but fare revenue from July to September only recovered 6.2% of costs.

The average fare recovery ratio across the Tauranga bus network was 12.8%.

The current average cost per passenger was $27.93, the council’s six-month performance report showed. This was 10 times more than the adult Bee Card fare.

Fare adjustments were necessary to ensure the service remained sustainable, Haycock said in a statement.

“This service is about creating better connections, but we also need to make it financially viable.

“To test how customers respond to pricing changes, we’re proposing fare adjustments that balance affordability and sustainability.”

Feedback showed 46% of customers would still use the service if fares were increased to $5.

The service had carried 18,798 passengers in six months, a 536% increase compared to the fixed Route 51 service, from Pyes Pā to Tauranga Crossing, it replaced.

The on-demand service in Tauranga South replaced a fixed route service. Photo / Mead Norton

Route 51 carried an average of 487 passengers per month, at an estimated operating cost of $147,000 per annum.

Most of the passengers were seniors travelling for free with the SuperGold concession.

The average cost per passenger on route 51 was $25.17, the route had the lowest fare recovery ratio in Tauranga in 2023/24.

The on-demand buses covered the Greerton, Gate Pā, Parkvale, Pyes Pā, Lakes and Tauriko suburbs.

Riders had embraced the service, with 93% giving it a five-star rating, and 92% said the current fares were good value for money, according to an August survey.

One customer said it was “a fantastic service that has allowed our family to access more things, like taking my son to swimming lessons”.

Another user with mobility challenges said: “This service has changed my life for the better. It’s opened up so many more options in my life”.

The service offered 1600 virtual stops, a significant increase from the 150 stops available under the fixed-route model.

Andrew von Dadelszen, chair of the regional council public transport committee. Photo / George Novak

The buses, which included four eight-seater electric minivans and one five-seater with ramps and a wheelchair hoist, did not stick to routes or a schedule.

Users log their location on the BayBus OnDemand app and say where in Tauranga South they want to go and when.

The trial had been funded by the Bay of Plenty Regional Council and NZ Transport Agency/Waka Kotahi with a 49% and 51% split, respectively.

Andrew von Dadelszen, chair of the regional council public transport committee, said the service was reshaping the way Tauranga residents viewed public transport.

“Public transport isn’t just about moving people; it’s about meeting them where they are and providing smarter solutions to modern challenges.

“The community’s positive response shows the potential of this approach, and we’re learning valuable lessons for the future.”

The Baybus OnDemand trial was expected to continue until September 2025, with reviews planned at 12 months and 18 months.

Data collected would help inform decisions about the service’s long-term potential.

LDR is local body journalism co-funded by RNZ and NZ On Air.