Metro’s real reason for eliminating paper transfers

Metro is eliminating paper transfers as of January 4th. According to this presentation before the Customer Service Operations and Safety (CSOS) Committee of the WMATA Board, 25% of bus riders use a bus paper transfer and 2% use a rail paper transfer, compared with 6% of riders who use a SmarTrip card to transfer between buses.

If you only read the official press releases, you’d get the impression that the principal reason Metro is doing this is to save money on printing the paper transfers, since that aspect of it has a dollar figure attached to it:

SmarTrip® also makes transferring easier. And it saves Metro - and you, our customer - money on paper and printing. That’s why we’re discontinuing the paper transfers.

Eliminating paper transfers will save Metro about $350,000 a year for the cost of paper and printing, plus expenses associated with the repair and maintenance of the old transfer machines in stations. It also is expected to minimize fraud and abuse of paper transfers by individuals who sell or give away their transfers to other riders, and reduce assaults on bus operators by riders who have disputes with operators about transfers.

However, according to the presentation, that $350,000 savings is dwarfed by two other effects: more payments by riders who don’t use SmarTrip, and reduced fraud. Between the two, Metro expects to bring in $5 million more per year in revenue.

Some people just won’t end up getting a Smartrip card, despite their increasing availability and Metro’s efforts to distribute them. Riders without SmarTrips will have to pay full fare when transferring.

As for fraud, paper transfers are frequently resold on the black market, either individually or by the book. More people board Metrobus using a paper transfer than there are cash riders. Meanwhile, there are only one-third as many SmarTrip transfers as SmarTrip cash transactions. Does this imply that two-thirds of paper transfer uses are fraudulent? That seems almost impossibly high.

Other transit systems realized huge revenue gains when they eliminated paper transfers. According to Metro, Boston earned $14 million more in revenue after making the change, and Chicago $17 million. Metro is looking forward to a net revenue gain of $9 million over two years after accounting for the cost of SmarTrip cards, customer communications and other expenses.

Metro should just level with the community and say that some people are defrauding the system to the tune of almost $5 million per year. That buys a lot of SmarTrip cards.

Cross-posted on Infosnack.