Transit Fare: Policy, Structure, and Technology

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Transit Fare Policy, Structure, and Technology
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Fare Changes

• Fare changes are often made in response to
  particular issues and problems
• 3 regularly scheduled, 97 as needed

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Farebox Recovery
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Fare Policy

• Economic concerns
• Ridership (Encourage mode shifts)
• Capture cost of services
• Revenue generation
• Reflect the value of service to user
• Meeting the needs of diverse market segments
• Political and equity concerns
• Helping the poor and disadvantaged
• Horizontal equity
• Redressing problems from under-priced auto use

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Fare Structures

• Flat Fares
• Distance-based Fares
• Zonal Fares
• Graduated pricing
• Time-based Fares
• Peak surcharge
• Off-peak discount
• Service-based Fares
• Express
• Bus-rail
• Free Fares
• Frequent-rider discounts

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Special Pricing

• University
• Employer Benefits
• Access-to-jobs
• Youth
• Senior
• Disabled

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Fare Structure Trends

• Simplification
• Flat by time of day
• Eliminate or Simplify zones/distance
• Eliminate transfers offer day passes ( 2.2
  trips)
• More variety of passes (weekly, daily)

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Free Fares

• Upside Ridership increase
• A significant share of gain from teenagers making
  latent trips
• Downside
• Revenue loss
• Poor schedule adherence
• Systemwide experiments (Trenton, Denver)
  discontinued
• Downtown only (Seattle, Portland, Syracuse, Salt
  Lake City)
• Assisted by other measures such as downtown
  parking caps
• Lesson
• Public resource whose consumers are identifiable
  and which has economic value needs to be rationed
  through price mechanisms, both to generate income
  and prevent oversubscription(Cervero 1990)

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Time-based Differential

• US ridership more sensitive to off-peak discount
  than peak surcharge
• Differential had very modest impact in shifting
  ridership from peak
• Midday-discount induce latent trips
• Columbus, Ohio deep mid-day discount induce
  sales tax revenues dedicated to transit system
  that offset lost revenue.

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Context

• Under-priced Automobile Travel

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Examine Arguments for Differentiated Fares

• Higher operating cost for serving longer trip
• Peak-period and premium services more costly to
  operate
• Cost subsidization by users of shorter-distance,
  off-peak or local services

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Complexity of Fare Structure

• Diversification of fare types and levels is not
  huge hurdle for users
• Well-designed differentiation may increase
  revenue while promote equity objectives
• Paying once for a whole trip!

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Fare Collection

• Barrier
• Pay on boarding
• Conductor-validated
• Self-service (honor)

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Experiments with Honor System

• Driver not responsible for checking fares
• Inspectors conduct random check
• Balancing
• Operating speed increase
• Equipment breaks/ fare evasion

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Types of Payment

• Real-time single-ride
• Prepaid
• multi-ride (transfers)
• period-pass (transfers expire)
• stored value (BART)
• Post-Payment (some shuttles, etc)
• Credit card billing is costly

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Fare Instruments

• Cash (bus, etc)
• Tokens (MTA Boston, NY)
• Paper (Amtrak, or bus transfers)
• Stored-Value card (BART)
• Smart Card
• ATM/Credit Card
• Transit Voucher

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Smart Cards

• Programmable to implement a variety of fare
  policies, discounts, time of day, etc.
• Expensive (costs 5/card)
• Multi-agency problems
• How to pay agencies for transfers, trips, etc.
• Bay Area Translink 23 years in the making!

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Smart Card Benefits

• Better OD, ridership, fare data
• Less cash to handle
• Lower printing costs
• Lower fare abuse
• Fewer fare disputes with operators
• Faster boarding (?)
• Can implement a variety of programs (welfare to
  work, etc)