The Transport Minister has announced a full review of the Public Transport Operating Model saying the competitive tendering process has triggered a "race to the bottom".
Phil Twyford has made the announcement in front of hundreds of bus drivers at a Tramways Union Wellington Branch annual general meeting this morning.
"Since PTOM came in, it's fair to say there's been a lot of disruption caused by operator and network changes, especially here in Wellington," he said.
PTOM was introduced by the previous government to incentivise commerciality.
But unions around the country have slammed it saying bus drivers' pay packets have borne the brunt of a council tendering process that incentivises bus companies to cut wages in order to offer the cheapest tender to council contracts for bus routes.
Last year Wellington commuters were thrown into a state of chaos following a new bus network rollout in the city.
The situation has been exasperated by a significant driver shortage on NZ Bus-operated routes.
"The bus industry is struggling right now to deliver consistently reliable services, because of driver shortages, shortages that in Wellington are causing significant cancellation of services on a daily basis.
"But there really is no mystery behind the shortage. Is it so hard to understand that driving down wages and conditions makes bus driving a less attractive job than it would otherwise be?" Twyford said.
Unions and industry partners would be given every opportunity to contribute to the review, he said.
"The review will try to learn the lessons from the PTOM experience and inform our thinking on the future system."
New Zealand Council of Trade Unions president Richard Wagstaff said PTOM has broken public transport systems.
"This operating model has been a fiasco since day one. Change can't come soon enough.
"PTOM has left public transport systems underfunded and fractured, it's cost people in the industry their jobs and driven down pay and conditions for many of those who have stayed.
"It holds a big share of the blame for the failures in public transport we've seen in the last few years."
Tramways Union Wellington secretary Kevin O'Sullivan said change was desperately needed.
"We've watched Wellington's public transport being ruined by PTOM, with hundreds of experienced drivers suffering under race-to-the-bottom competitive tendering.
"This is a mature industry where everyone has the same costs for buses, fuel, and depots. PTOM forced the industry to compete on what was left - drivers' wages and conditions and the quality of service and safety for the public."
The Government has prioritised public transport, something immediately clear in the Let's Get Wellington Moving announcement last week with mass transit the big winner.
"But our government is not prepared to build a modern public transport system for our cities on the backs of people like you who get up and go to work each day to drive the buses," Twyford said.
"We want to see a modern industry with improved productivity and decent jobs."
Last year Greater Wellington Regional Council released an independent review into the implementation of its new network.
The review did not consider the inherent design and philosophy behind it, or the limitations of the PTOM provision, which will be dealt with at a later stage of the review.