Public transport has provided Melburnians with mobility, has largely determined the shape and form of the city, and has been the subject of endless debate over problems and remedies. Internationally, Melbourne is remarkable for the extent, and early construction, of its public transport infrastructure, but not for current patronage levels. While public transport serves half of all trips to the central activities district, across the city it serves only 12% of work trips and 8% of trips for all purposes.
Until the 1960s Melbourne had one of the highest rates of public transport use in the world; the decline since the 1950s has been more extensive in Melbourne than in most other cities. The usual explanation offered for this change is the rise of motor car ownership, as well as changes in urban form towards a dispersed pattern. However, Melbourne developed a spread-out urban form earlier than most other cities precisely because of the extent, convenience and early construction of public transport. This pattern reached its most characteristic form in the land boom of the 1880s, which heralded the end of the old 'walking city'. Before cars became widespread, this spacious urban form produced high rates of public transport use because distances were too great for walking.
Another legacy of the 1880s boom was fierce competition between different forms of public transport. The early suburban railways were private concerns, but were taken over by the government in 1878. Cable trams were installed by a private company from 1885 and taken over by the Melbourne and Metropolitan Tramways Board in 1919. The two public systems continued to compete with one another, and soon private buses joined the fray. The Metropolitan Town Planning Commission in 1929 condemned the competition as wasteful and advocated a central authority to co-ordinate the different modes. The Melbourne and Metropolitan Board of Works reiterated the call in 1953, but institutional rivalry between the Victorian Railways and the Tramways Board, and the problem of the multitude of private bus-operators, ensured nothing was done.
As car-ownership grew following the end of petrol-rationing in 1950, the deficiencies of competition became more apparent. New suburbs grew up beyond rail and tram lines, and increasing numbers of cross-suburban trips were made. But public transport did not serve these needs, as operators continued to compete with one another, rather than with the car. Patronage fell rapidly and along with it the financial fortunes of operators. By the 1960s public transport operators were trapped in a vicious cycle of patronage decline, fare increases and service cuts.
The 1969 Melbourne Transportation Plan, as well as recommending an extensive network of roads, proposed the modernisation and extension of public transport. In 1973, in response to the rise of anti-freeway movements, premier Dick Hamer cancelled the most contentious freeways from the 1969 plan and promised an increased emphasis on public transport. Investment in the underground rail loop and new rolling stock was accelerated, but the basic problem of co-ordination was not addressed. Service levels continued to decline; patronage continued to fall, and both public and private operators became dependent on rapidly growing government subsidies. The government's response was the Victorian Transport Study of 1980, headed by W.M. Lonie, which recommended extensive service cuts and line closures. The Lonie report was defeated by a coalition of trade unions and community groups, including the Train Travellers Association (which in 1984 became the Public Transport Users Association).
The Cain Australian Labor Party Government promised improved public transport. An early initiative was the establishment in 1983 of the Travelcard system, which allowed free transfers between different modes of public transport. The result was an immediate increase in patronage across all modes, the first in more than 30 years. The logical next step, the integration of services into a genuinely multi-modal network, was not pursued. Instead, the government's attention turned to cost-cutting, resulting in a series of disputes, culminating in the famous tram blockade of 1990. It was left to the Kennett Liberal Government to make the cost reductions.
Beginning with the public bus fleet in 1994, the government progressively privatised the network. The process was completed in 1999, when the rail and tram systems were taken over by private operators. Thus the ownership wheel turned full circle to the pattern of the 19th century. In 2004 the Bracks Labor Government effectively reprivatised public transport by agreeing to large increases in subsidies, following the collapse of one private operator and threats by the remaining two to leave the State.