Transit
Does Metro ask riders to pay too much?
Metro is one of the most expensive rail systems in the country, with fares ranging as high as $6.75. But aside from pure sticker shock, Metro riders pay a much higher percentage of the cost to provide the service than riders in other cities do.
Photo by Oran Viriyincy on Flickr.
All transit systems in the United States provide information about their "farebox recovery ratio." This ratio is the percentage of operating costs covered by riders' fares.
For example, if it costs $10 million per year to run a transit system, but the system only takes in $4 million each year in fare revenues, the farebox recovery ratio is 40%. The remaining 60% of the cost to operate the system must come from other sources (most likely taxes or other subsidy).
The farebox recovery for the Metrorail system for 2011 (the most recent year with available data) was 67.8%. This is the 3rd-highest farebox recovery ratio in the nation for all heavy rail, light rail, and commuter rail systems.
Among heavy rail systems, the average farebox recovery ratio is 46.4%, and systems range from 20.2% (Baltimore Metro) to 76.6% (New York City Subway). The range for light rail systems is between 12.0% (Dallas) and 57.4% (San Diego), with an average of 29.6%. Commuter rail averages 33.3% and ranges from 6.2% (Portland WES) to 62.3% (Metro-North).
What can cause a high farebox recovery ratio?
It's important to note that high fares are not the only reason for high farebox recovery ratios.
New York, for example, has the highest farebox recovery ratio, but their fares are not actually as high as those on San Francisco's BART or Metro. In 2011, the fare to ride the New York Subway was a mere $2.25, plus bus transfers are free. WMATA's highest fare in 2011 was $5.45. In 2010, the highest fare on BART would set you back $10.90.
So if New York has fares that are so much lower, how can it have a farebox ratio (76.6%) higher than Metro (67.8%) or BART (76.1%)?
The answer is in the service efficiency. New York is extremely dense and extraordinarily transit-dependent. As a result, the subway is very productive in terms of the number of riders per train, and that means that New York's system is more efficient. So despite lower fares, straphangers pay a larger percentage of the share.
BART is at the other end of the spectrum. That system is designed much more like a commuter rail system than a subway. The long distances between stops and the lower density of the Bay Area mean that the trains run with fewer passengers, and the agency charges much higher fares, asking riders to pay a larger share.
Metro's recovery stays high
Between 2002 and 2011, Metrorail has had an average farebox recovery ratio of 62.2% and has ranged from 58.1% to 67.7%.
One reason that Metro charges riders so much to use the rail system is the funding situation in the region. With a lack of a dedicated funding source, WMATA has to go to the jurisdictions each year to ask for money. Because the jurisdictions have a variety of funding priorities, WMATA is competing with other things for resources, and it can be a difficult battle to get additional subsidy.
In 2011, rider fares across all modes paid 46% the cost of operating Metrorail, Metrobus and MetroAccess. The local jurisdictions paid 41%.
The way WMATA gets subsidy from its constituent jurisdictions is by calculating the cost to operate the system, subtracting estimated fare revenues, and then allocating the rest of the cost using a complex formula.
Lowering the cost of the fare would decrease the revenues Metro gets from fares, and would mean that jurisdictions would be responsible for paying more. This would put the additional burden on taxpayers in each jurisdiction, regardless of whether they ride Metro or not.
But that's fair, because everyone in the region benefits from Metro. Not only because traffic is reduced by other people using transit, but also because of the enormous economic benefit that Metro provides to the region.
A study released in 2011 estimated that Metro creates an additional $224 million in tax revenues for local jurisdictions each year due to demand to locate within 1/2 mile of stations. The study also indicated that having Metro has allowed the region to grow without adding new roads, an investment estimated to cost the region $4.7 billion.
What might a change look like?
It's difficult to estimate exactly how lower fares would affect the budget.
In 2011, WMATA earned fare revenues of $571,418,362 from rail passengers. That's 67.7% of the cost to operate Metrorail, and is 36.7% of WMATA's overall operating budget.
The local jurisdictions put in $647,248,856 to the operation of the system, about 41.6% the cost of operating the system.
If Metro fare revenues were to drop 10% (through lower fares), the local jurisdictions would need to make up the difference of $57,141,836. A 10% drop in fare revenues would also lower the farebox recovery ratio to 60.9%.
Getting down to the average farebox recovery ratio for heavy rail systems in the United States (46.4%), would mean dropping fare revenues by 31.5% to just $391,665,363. That would mean an additional $179,752,999 annually from the jurisdictions.
One scenario
Were Metro to target a farebox recovery ratio of 46%, what might riders experience in terms of fares?
Using the ridership data that Metro provided and a fare table, I estimate Metro earns about $2.1 million in (rail) fare revenue each weekday.
Assuming that revenue fell by 31.5% as well, daily revenues would need to drop to around $1.5 million to get to to a farebox recovery ratio of 46%.
One path to doing that would be to always charge off-peak fares and drop all fares 45¢.
Note, this model assumes a peak hour ridership elasticity of 0.15 and an off-peak elasticity of 0.40. That means that for every 10% that peak fares drop, ridership increases by 1.5%. For every 10% that off-peak fares drop, ridership increases by 4%. The model also assumes that all trips use full-fare trips (no senior discounts) and are paid with SmarTrip (no surcharge).
So, for example, the current SmarTrip peak fare between Addison Road and Archives is $3.50 and is just $2.75 off-peak. Making all fares off-peak and dropping their cost by 45¢ would mean that for both peak and off-peak trips, the ride between Addison Road and Archives would cost $2.30.
It would mean dropping the average fare (currently about $3.00) to $1.94.
That scenario would lower estimated daily revenues to about $1,507,453. It would also raise average daily ridership from 729,115.1 to 778,782.8.
This example is just meant for illustrative purposes, to give you a sense of the dynamic in play between fares, ridership, and subsidies.
What should WMATA do?
From a practical standpoint, it would be almost impossible for WMATA to lower the farebox recovery ratio at once by dropping fares. However, it could work with the jurisdictions over time to hold fares steady (or lower them) as jurisdictional subsidies increase.
It's a tough time financially not only for WMATA, but also for many of the region's jurisdictions. They already contribute significant amounts toward Metro. Asking them to contribute even more will be difficult. However, with proper political pressure it may be possible.
Metro's fares are among the highest in the nation. It's unfortunate that riders are being asked to shoulder such a large burden, but it will be difficult to change the situation.
 | Matt Johnson has lived in the Washington region since mid-2007. He has a Master's degree in Community Planning from the University of Maryland and a BS in Public Policy from Georgia Tech. He has worked in the planning field since 2006 and lives in Greenbelt, where he serves on the city's Advisory Planning Board.    |
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The federal government pays a pretty good chunk of that through commuting subsidies for their employees who don't drive to work.
So how far off are my estimates here:
A quick internet search gives a number of about 300,000 federal employees in the DC area. How many use Metro?
The 2011 ACS indicates that 439,194 people commute using mass transit and 35% of them are government workers. That comes in around 150,000 people. That could be any level of government, though. Is 100,000 federal employees using Metro too ridiculous of an estimate?
100,000 people commuting an average of 19 days a month at an average of $9 round trip (totally made that up) would be
$205,200,000 a year.
That would be about 36% of the total fare revenues.
by jh on Feb 20, 2013 10:31 am • link • report
by charlie on Feb 20, 2013 10:39 am • link • report
I'm curious why we're focusing only on the fare revenue side here: what about the operating costs of the system?
Slide 21 of this presentation shows where WMATA's rail operating costs stand against other agencies:
http://www.apta.com/members/memberprogramsandservices/international/Documents/U.S.%20National%20Transit%20Database.pdf
by Alex B. on Feb 20, 2013 10:45 am • link • report
by jeffb on Feb 20, 2013 10:49 am • link • report
No. Parking fees are not included. The farebox numbers shown above are for Metrorail unless otherwise specified.
Parking fees are in a different category.
by Matt Johnson on Feb 20, 2013 10:50 am • link • report
by Chris on Feb 20, 2013 10:54 am • link • report
by Nicholas on Feb 20, 2013 11:01 am • link • report
by Birdie on Feb 20, 2013 11:02 am • link • report
by Alternatives on Feb 20, 2013 11:04 am • link • report
Regardless, striking that Metro's operating cost per revenue hour is 2x that of New York, 50% greater than Philly, and substantially greater than BART, Muni, Miami, and even MTA.
And I wonder how Metro's ability to keep vehicles in service compares to other systems...
by Bitter Brew on Feb 20, 2013 11:07 am • link • report
Metro is expensive, but it's also really crowded at peak. If you reduce peak fares, you will literally run out of room. If it's a bad idea for VA to kill the gas tax, which it is, then this is also a bad idea. The point of congestion charges, whether for cars or transit riders, is to get people to best utilize scarce peak capacity.
If you want to make the system run better, you should look at cutting off peak (and near peak) fares. These are the least profitable services, but they are crucial for system reliability. An added bonus would be getting price-sensitive riders to shift work schedules, which would free up space on rush hour trains by moving folks to emptier trains.
by someguy on Feb 20, 2013 11:09 am • link • report
by Transport. on Feb 20, 2013 11:34 am • link • report
by John Flack on Feb 20, 2013 11:39 am • link • report
by Ser Amantio di Nicolao on Feb 20, 2013 11:41 am • link • report
Spot on. Metro ridership surveys peg Federal employees at about 40% of peak period ridership, which is about 100,000 out of 250,000 riders in the peak period.
I'm surprised no-one's mentioned the hybrid transit system point about Metro, yet. It's a commuter rail system grafted on to an urban mass transit system. Service levels in the core are bound -- or at least linked -- to service levels in the outer arms, so it's difficult at the moment to craft a service plan and fare policy that distinguishes better between WMATA's hybrid functions. Investments automated train operations and pocket tracks for the inner jurisdictions would offer a way to create more separation between the commuter rail service offered the outer suburbs and the urban mass transit service needed in the core, and maybe even separation in the fare structures, too.
Point of comparison: Roslyn, NY to Penn Station, NY is 24 miles, and costs 8.50 in the off peak and 11.50 in the peak.
Shady Grove is the same distance from Gallery Place (25 miles), and offers a lot more service daily for a lot less cost. Arguably a better value for the commuter.
by jnb on Feb 20, 2013 11:45 am • link • report
by jnb on Feb 20, 2013 11:47 am • link • report
by Thad on Feb 20, 2013 11:57 am • link • report
Metro has a small price elasticity of demand, less than 1.0 for off-peak, and much, much less than 1.0 for peak. It would need to be greater than 1.0 for Metro to make money from fare cuts. (i.e., a 10% reduction in fare would result in more than a 10% increase in riders).
by Michael Perkins on Feb 20, 2013 12:12 pm • link • report
So how does Metro's overall 46% farebox recovery rate compare to other jurisdictions? If it's in line with other similar systems like San Fran, then we're probably about right overall and just need to adjust farebox recovery rate between rail and bus.
The difference is that I've never seen a system that runs as infrequently, opens as late, closes as early, and breaks down as much as Metro and still charges twice to thrice the price as NYC, Chicago, London, Hong Kong, Singapore, SFO, Philadelphia and on and on.
Metro has to charge a high price for low service because it's operating costs are too high. Operational costs for metro per revenue hour are higher than the US cities you mentioned -- NYC, SF, Chicago, Philly. For example, WMATA operates at more than double the hourly cost as Chicago. I'd start with the racist/sexist* WMATA union in trying to figure out how to reduce operational costs.
* http://www.washingtontimes.com/news/2012/mar/26/metro-derailed-by-culture-of-complacence-incompete/?page=all
by Falls Church on Feb 20, 2013 12:14 pm • link • report
I've heard several times that about half of ridership rides free. Not sure if this is just DC. Who rides free? Are they just talking about employer-paid? School kids? Handicap?
by Tom Coumaris on Feb 20, 2013 12:14 pm • link • report
by Scoot on Feb 20, 2013 12:18 pm • link • report
Used to live in NOVA suburbs and work in DC. Drove half the time, used Metrorail the other half. Quick math:
DRIVING:
24.5 miles (one way)*0.565 (IRS standard mileage rate)=
$13.84 *2 (for both directions)= $27.68
Parking at office = $25.00 a day
Driving total per day = $52.68
(Drive time: between 35 minutes and 2 hours one way)
METRORAIL:
4 mile drive to station (one way)*0.565 (IRS standard mileage rate)= $2.26 *2 (for both directions)= $4.52
Parking at station = $4.75
Metrorail fare ($5.25*2 for both directions)= $10.50
Metrorail total per day = $19.77
(Travel time car/metrorail: 1 hour one way)
I now live in DC and walk to work; but always thought Metrorail was underpriced when compaired to driving.
by DC Resident on Feb 20, 2013 12:23 pm • link • report
Metro is a hybrid suburban/urban rail system - not quite like BART and not quite like NYC. The Metro does not currently go to Loudon County type areas either.
by Scoot on Feb 20, 2013 12:23 pm • link • report
Reducing the number of cars from 8 to 6 only results in a minor savings. It takes 20% less electricity and 25% less car maintenance to run 6 car trains. It still takes the same amount of staffing and station costs.
Metro's number 1 cost is labor
by Richard Bourne on Feb 20, 2013 12:27 pm • link • report
by GP Steve on Feb 20, 2013 12:29 pm • link • report
To use @jnb's earlier example of the Long Island Railroad:
The fare from Roslyn to Penn Station might be $11.50, which is much more expensive than the $5.45 fare from Shady Grove to Metro Center.
However, commuters on the LIRR pay only 53.45% of the cost of their service through fares, whereas Metro riders pay 67.7%.
The argument is not exactly about how *much* riders pay. It's about what *percentage* of the cost of providing the service they pay (as opposed to taxpayers).
Even though riders on the LIRR pay higher fares for comparable distances (and less service) than do Metro riders, their trips are *more subsidized*.
If Metro trips were subsidized at levels similar to the LIRR, the fare from Shady Grove to Metro Center would be lower than it is today, and would still be lower than the LIRR fare, though higher than the NYCT Subway flat fare.
by Matt Johnson on Feb 20, 2013 12:32 pm • link • report
One of the problems with mass transit has been its inability to pay for itself. Yes, we all benefit, but the economic impact is fluid and consists of many variables - making it hard to convince decision-makers. It always depends on how the data is presented and processed.
In a perfect world, these types of services would actually pay for themselves instead of relying on subsidies. Public benefit is worthy of a subsidy of some amount, but I think it is a bad argument to say we should be entitled to pay less than 60% of the cost to actually operate the system. Shouldn't we be talking more about how to balance operating costs, revenue and public benefit simultaneously to create a sustainable economic plan?
by emikael on Feb 20, 2013 12:32 pm • link • report
by 7r3y3r on Feb 20, 2013 12:34 pm • link • report
Good point. However, people don't see that IRS rate of $27.68 for 24 miles each way. They see perhaps $8. Assuming 24 mpg, that's 1 gallon of gas for your trip. Say $4/gallon. So roughly $8 vs $28. While your numbers are correct to take into account depreciation, maintenance, etc that is lost on the average commuter on how expensive driving is even with the US's relatively cheap gas and subsidized roads.
by GP Steve on Feb 20, 2013 12:35 pm • link • report
Lowering peak fares would not result in a dramatic increase in peak ridership because it's not very elastic.
Under the example I gave, making all fares off-peak (and 45 cents cheaper), the average fare paid during the AM Peak drops from $3.40 to $2.15; a drop of 36.8%.
Based on an elasticity of 0.15 (which is what Metro uses during the Peak), ridership would increase from 236,177 during the AM Peak to 250,444; an increase of 6.0%.
by Matt Johnson on Feb 20, 2013 12:40 pm • link • report
by Nicholas on Feb 20, 2013 12:41 pm • link • report
>>>This would put the additional burden on taxpayers ... regardless of whether they ride Metro or not. But that's fair, because everyone in the region benefits from Metro. Not only because traffic is reduced by other people using transit, but also because of the enormous economic benefit that Metro provides to the region.<<<
When finer details are glossed over about the true cost of roads versus rails, it seems this could otherwise easily be rephrased as:
Funding highways from general funds would put the additional burden on taxpayers ... regardless of whether they drive or not. But that's fair, because everyone in the region benefits from highways. Not only because crowding on transit systems is reduced by other people using highways, but also because of the enormous economic benefit that highways provide to the region.
by Bossi on Feb 20, 2013 12:44 pm • link • report
If the system is already quite crowded, I don't think an additional 14k people would be beneficial to the riding experience of already crowded trains. Could the system handle it? Probably but with the projected growth as it is, I'm not sure that's helpful. Additionally, having a peak fare makes sense to provide some incentive to if at all possible travel during non-peak times. I often see school groups waiting until 9:30am. Since those groups have such flexibility, the difference in peak vs non-peak fares provides the incentive for that group to better even out demand.
Flat rates don't make sense either since why should people who travel short distances subsidize the people who travel far distances. Living "closer" is more expensive in housing costs but should result in less travel costs. It's fair that we have essentially flat rate buses (yes there are express routes) because of the complexity of multiple rates and tracking when people got off.
by GP Steve on Feb 20, 2013 12:48 pm • link • report
In order to have the flexibility to add passenger volume, Metro needs to invest in expansion - something it can only do with more help from the jurisdictions, maintaining high fares, and/or creation of a new funding mechanism.
by Ben on Feb 20, 2013 1:10 pm • link • report
1 If you are on Metrorail then get on Metrbus fare = free metrobus
2 If you are on Metrobus then get on Metrorail fare is normal price minus bus fare price (3.70 metrorail fare minus 1.70 bus fare so rail trip cost 2.00)
I would suggest pay per performance but it would never happen. There have been many times I have waited 25 or 30 minutes for a train on a Sunday night; a discount of any size would soften the blow of waiting for a train 30 minutes in a station.
by kk on Feb 20, 2013 1:12 pm • link • report
by Nickyp on Feb 20, 2013 1:18 pm • link • report
You're right, the hybrid function is not really relevant to farebox.
The real issue is who is benefiting from transit service, and who is paying for the benefits they get, and how are beneficiaries paying? And what is/are the "fairness" principle(s) that govern the evaluation of the question "Is Person X Paying too Much," where Person X could be a rider, a driver on a road that's less congested due to transit service, a tax-paying homeowner who never uses transit but who gets to walk and bike in a place that exists because transit is funded, a business owner whose patronage depends on transit service, etc.
We could measure all of the things above, and we'd be better informed as a result, but I'm still not sure we'd have better information about what is "fair."
Ultimately, it's my sense that riders are being asked to pay too much, but not in an absolute sense. What I don't like is that riders are being asked to pay more for service that is not becoming more demonstrably efficient or productive. I really think it is on the Board -- which IS WMATA -- to better control these things before passing on new costs to riders. And I think the Board, which represents local government funding arguably more strongly than it does the riders (who are not directly represented on the Board), should be put in a position of having to control total cost growth better before going back to the riders again.
Personally, I'd like to see WMATA hold fares constant for a while and use that time period to do everything possible to hold down cost growth - which involves labor relations, performance contracting, reallocation of space on roads for buses, automation of rail service, etc. -- because the ultimate balance that has to be resolved will be between the pain to the riding public of increased fares on the one hand, and the political pain to Metro's funders of dealing with rider outrage versus changing the political equilibria that govern those cost drivers above. And, also, of course, the equilibria that govern how much local governments subsidize Metro given the value that Metro service creates for local government funders, which was your whole point in the first place....
by jnb on Feb 20, 2013 1:20 pm • link • report
Why focus on this metric?
Let's say the fares stay the same and suddenly Metro decides to double operator salaries - now the farebox recovery ratio has decreased, meeting your goal.
I'm also not sure that focusing on how the costs are divided up is a priority at this point. Ensuring efficient operations would be a higher priority to me (and, indeed, a harder question to answer). That means looking at operating costs - the other side of the cost recovery ratio.
Overall, there are a couple metrics worth looking at - no single one is the lone determinant of where fares should be. Cost per hour, cost per rider, subsidy per rider, farebox recovery, boardings per hour - all of those (and some others) better indicate the efficiency of the service.
If you want to make the case that fares should be lower, I think that case needs to be made in a different way. If you wanted to argue that lower fares would increase ridership, that's a valid goal and argument. However, arguing that fares should be lower because Metro's farebox recovery is too high seems backwards and certainly not persuasive.
by Alex B. on Feb 20, 2013 1:21 pm • link • report
"Dedicated funding" means a revenue stream that is dedicated (committed) to funding a certain thing.
For example, in Fulton and DeKalb Counties in Metropolitan Atlanta, a 1 penny sales tax is collected expressly to pay for the construction and operation of the MARTA rail and bus system. This is dedicated funding. That money only goes to MARTA.
The state legislature cannot swoop in and take money from that pot to pay for schools, for example. There's also no discretion. One penny on each dollar spent automatically goes to MARTA. The state can't do anything to stop that. It's "dedicated" to MARTA.
I'm not intimately familiar with the proclivities of MTA funding in New York, so I'll leave that to others to talk about.
by Matt Johnson on Feb 20, 2013 1:22 pm • link • report
The argument is not exactly about how *much* riders pay. It's about what *percentage* of the cost of providing the service they pay (as opposed to taxpayers).
Well, federal taxpayers pay $150M toward fares that is left out from your calculation. So the farebox recovery, defined as the percentage of the cost of providing the service that riders actually pay, is significantly less than 67.7%. I mean, given that we've already established that Metro is not funded like other American rail systems, I don't understand why its farebox recovery should be the same as other heavy rail systems around the country.
Making all fares off-peak (and 45 cents cheaper), the average fare paid during the AM Peak drops from $3.40 to $2.15; a drop of 36.8%. Based on an elasticity of 0.15 (which is what Metro uses during the Peak), ridership would increase from 236,177 during the AM Peak to 250,444; an increase of 6.0%.
If I am understanding this correctly, asking jurisdictions to contribute an extra $200M for 14k new riders does not seem like such a great investment.
by Scoot on Feb 20, 2013 1:24 pm • link • report
It's left out for a reason - it's not really a subsidy to Metro.
The Feds subsidize a fringe benefit for their employees. Lots of employers do this, and they do it for lots of things (healthcare, transportation, etc). That same benefit applies to Federal employees living in other cities. If you're a Fed in New York, you can put that subsidy towards riding the subway.
by Alex B. on Feb 20, 2013 1:32 pm • link • report
I think you are. I think we all are. We're just too PC to actually say it.
by Jack J on Feb 20, 2013 1:39 pm • link • report
http://greatergreaterwashington.org/post/5941/metro-isnt-the-nyc-subway-part-2-dont-forget-transfers/
The WMATA bus fare is relatively low, but for people who take bus to rail, their fares are extra high. That also creates situations where some people ride a slower bus a long distance to avoid paying the rail fare, which isn't necessarily what we want to incentivize except across the busiest parts of the system.
by David Alpert on Feb 20, 2013 1:45 pm • link • report
Takoma -> Metro Center, about five miles, (rush hour) = $3.15 each way, $6.30 per day. My wife does the same trip, thus a total cost of $12.60 per day.
Now time for some calculations, bear with me: Assume 52 weeks per year, working 46 of those weeks (10 federal holidays , 3 wks vacation, 1 wk sick time) = 46x5 = 230 working days.
Total commuting cost = $2,898 annually, or $1,449 per person. Not that bad, really, at that cost. MTA unlimited passes for a year are like, $1200, right? We have a car, so we don't use metro for a lot of our weekend trips around town.
BUT THEN THE TWIST: My wife's work provides a subsidy of $65 a month, or $780 per annum, reducing her cost to $669. I get the IRS smartbenefits through work, so my $1449 is tax free. At our 25% married filing jointly bracket, my cost is .75 of $1449, or $1086 when you account for the deduction. So our total cost annually is actually only $669+$1086 = $1755, or $7.63 per day, or $3.81 per person per day.
For a major metro area, I consider that to be dirt cheap for the distance we go, and that cost against driving and parking (minimum of $13 a day just to park). Everyone makes a big stink about the $104 (or whatever) unlimited NYC pass, but the two of us buying those 12x a year would actually be $700 more than what we pay. That $700 probably accounts for way more than what we would use metro for otherwise (non-commuting evening or weekend trips). And if you absolve my wife's subsidy, the total cost still isn't that high.
TL;DR - Metro is actually pretty cheap, at least for commuters.
by Stevey Jones on Feb 20, 2013 1:52 pm • link • report
It may be true in your case but not others
Many jobs do not give out subsidies typically lower wage jobs (restaurant, retail, cleaning etc) so they pay full fare prices unlike your wife. Working in those type jobs they may not have a regular schedule so they could be working any time of the day (that also may increase or lower cost)
People who solely depend on transit and do not have cars (for whatever reason); their expenses are higher.
People who commute longer distances (some people dont work in downtown DC or urbanized areas)
by kk on Feb 20, 2013 2:06 pm • link • report
There has to be some way of rethinking things so that those lost weekend riders are willing to start coming back. There are a lot of us in the suburbs for whom this is an issue, I'll wager.
by Ser Amantio di Nicolao on Feb 20, 2013 2:17 pm • link • report
If the question is "Does Metro asks riders to pay too much", then the answer is probably no. A huge number of riders (close to half during peak hours) pay little or no fare at all.
by Scoot on Feb 20, 2013 2:24 pm • link • report
by Tom Coumaris on Feb 20, 2013 2:30 pm • link • report
if it's left out, then it should be clarified that the farebox recovery ratio is not really the percentage of the system's operating budget paid by riders, it should be defined as the percentage paid by fares.
No, that is not a relevant distinction.
Riders pay fares. Some fares are subsidized by their employers.
What difference does it make if the Feds give an employee $200 a month to ride Metro? Let's argue that the alternative would be the Feds giving the employee $200 a month in cash added on to their salary, which the employee then uses on Metro. That's the whole reason we have tax rules like this: fringe benefits to employees have a cash value, and the IRS wants to put a value on that for tax purposes.
It's all an accounting trick. The relevant point is a) that person rode metro, and b) as far as Metro is concerned, they paid their fare.
Metro doesn't particularly care where the money came from. If the rider was using laundered drug money or a tax-deductible fringe benefit or the spare change someone pulled from their couch cushions - what's the difference?
by Alex B. on Feb 20, 2013 2:34 pm • link • report
This is like saying that health insurance premiums aren't that high because employers cover most of the cost. Whatever employers spend on employee benefits is money they're not spending on employee salaries.
by Falls Church on Feb 20, 2013 2:38 pm • link • report
An increase in income (whether it be from an infusion of cash, laundered drug money or found spare change, as per your examples) is not generally considered to be equivalent to a subsidy.
In most other rail systems, this may not be a distinction worth discussing, but with Metrorail, about 25% of all fare revenue is paid directly by the federal government and the other 75% is paid by riders. In my opinion, any question regarding whether "Metro asks riders to pay too much" should factor in how much riders actually pay.
by Scoot on Feb 20, 2013 2:59 pm • link • report
It's not like saying that, because the question the blog piece posed was "Does Metro ask riders to pay too much?" and not "Are Metro fares too high?"
And for another thing, perhaps whatever employers spend on employee benefits is money they're not spending on a shareholder dividend, or an upgrade to an IT system, or on research and development, or on other types of investments. Employee salaries and employee benefits rarely compete in a zero sum game.
by Scoot on Feb 20, 2013 3:06 pm • link • report
This is wrong. The federal government does not directly pay for anyone's Metro fare.
If you want to argue that they indirectly pay fares via subsidizing transit use by their employees, fine. Just remember that not all of that transit benefit goes to WMATA. Lots of Fed employees will ride MARC or VRE, or RideOn or the Circulator or any number of other transit options. And all of those involve indirect benefits.
My employer partially subsidizes my monthly transit commute. I do not work for the Feds. It is the exact same type of benefits program that the Feds use, operating under the exact same guidance from the IRS. If you're arguing that this means the Feds 'subsidize' Metro operations, then this must also mean that everyone offering this benefit is also subsidizing Metro operations.
by Alex B. on Feb 20, 2013 3:18 pm • link • report
The NYC monthly pass is amazing for those who not only commute but who also want to do things outside of their own neighborhood. I have a sister in Brooklyn who would go out (and spend money in the local economy) a lot less if she did not have a monthly pass for work.
I walk to work so Metro would really be for liesure in my case. Using Metro for more than one person - say a museum visit or baseball game on a Sunday - is often more expensive and less convenient than just driving in from Silver Spring.
In NYC, on the other hand (I am from Northern NJ) I rarely drive in for similar experiences no matter what day of the week or time it is.
by gooch on Feb 20, 2013 3:27 pm • link • report
Employers provide a total compensation package (wages + benefits) based on what they believe is appropriate. If benefits were reduced, wages would have to go up to maintain a similar level of compensation. So, unless an employer believes their total compensation to employees is inappropriate, an increase in benefits (such as transit benefits) would result in a decrease in wages...although not necessarily in a 1:1 ratio.
The reason it's not necessarily in a 1:1 ratio is that sometimes money spent on benefits furthers an employer's strategic goal. To the extent the benefit furthers that goal (such as healthier employees), employers would be willing to spend a little more on the benefit than they would be willing to spend on extra wages.
by Falls Church on Feb 20, 2013 3:29 pm • link • report
Employers provide a total compensation package (wages + benefits) based on what they believe is appropriate. If benefits were reduced, wages would have to go up to maintain a similar level of compensation. So, unless an employer believes their total compensation to employees is inappropriate, an increase in benefits (such as transit benefits) would result in a decrease in wages...although not necessarily in a 1:1 ratio.
I agree with you, in general, with respect to corporations that are operating reasonably competitively. But this breaks down when you apply it to an employer like the federal government. The feds largely have a salary structure imposed on them by outside forces, and so they seek out ways to provide benefits to attract employees without being able to change those salaries.
by Gray on Feb 20, 2013 3:46 pm • link • report
Depends on the agency. The federal agency that I am employed under just loads a whole bunch of money onto my Smartrip card every month. The money is even put into its own little account on my Smartrip card, separate from my personal account, and fares get drawn from the federal account when I swipe in and out. If that is not considered direct payment of a Metro fare then I don't really know what is. Would a federal agent in a black suit and black sunglasses have to hold my card over the reader for it to be considered paid for by the gov't? :-)
by Scoot on Feb 20, 2013 3:53 pm • link • report
Your employer puts the money on your card to pay transit because you ride transit. They would not provide that subsidy if you did not ride transit. They would not provide $150m to Metro in the form of fares paid by riders if their employees did not ride Metro.
There is a difference between $150M paid as a lump sum and that money paid to employees so they can ride transit.
by MLD on Feb 20, 2013 4:52 pm • link • report
If that is not considered direct payment of a Metro fare then I don't really know what is.
It is payment of fares. What you are doing is not counting that money as "fares paid" because you don't like who is paying it. It's still fares paid by riders.
by MLD on Feb 20, 2013 4:53 pm • link • report
To say that benefits is not a zero-sum game is absurd. If your current employer didn't offer benefits, would you not be looking for a commensurate raise? Somewhere in the neighborhood of 5K+ depending on if you have family?
by Kyle-W on Feb 20, 2013 5:35 pm • link • report
It's actually not $150M in the form of fares paid by riders -- it's $150M in the form of fares paid by the government (or employer) on behalf of riders.
What you are doing is not counting that money as "fares paid" because you don't like who is paying it. It's still fares paid by riders.
I am counting it as fares paid, just not as fares paid by riders.
I know Metro doesn't care where its fare revenue comes from, but if the question concerns whether "Metro asks riders to pay too much" and whether "riders are being asked to shoulder such a large burden" then maybe we should actually focus on how much riders pay, and not just how much fare revenue WMATA receives from a combination of riders and government/employer subsidies.
by Scoot on Feb 20, 2013 5:41 pm • link • report
The federal agency that I am employed under just loads a whole bunch of money onto my Smartrip card every month. The money is even put into its own little account on my Smartrip card, separate from my personal account, and fares get drawn from the federal account when I swipe in and out.
That is the same process for everyone. My non-Federal employer gives me a subsidy. It goes onto my card automatically every month. That money is kept in a separate account on my card - which has nothing to do with you being a Fed, it has to do with IRS rules for fringe benefits. When that runs out, money comes out of the personal account on my card.
The benefit you and I recieve is the same. The reason is that both our employers offer transit as a fringe benefit to our employment (just as employers offer heath insurance or free parking or any other number of fringe benefits that the IRS has rules for).
The process would be the same for an employee putting their own money on a SmarTrip card via a pre-tax deduction - that money would have to be in a separate account. Again, the reason for that separation is because this is a fringe benefit of employment, regulated by the IRS. That's why it does not count against your taxes, and that's why it must be in a separate account.
If that is not considered direct payment of a Metro fare then I don't really know what is.
Becuase it's the same as my non-federal transit benefit.
Let's say the Feds did not offer a transit benefit, but you still took Metro every day. By your logic, how is that not considered direct federal subsidy of Metro? After all, you're paying the fare based on a salary you earned working for the Feds.
by Alex B. on Feb 20, 2013 5:55 pm • link • report
Every serious economic study on this issue disagrees with you.
by Rob on Feb 20, 2013 6:14 pm • link • report
I'm not really seeking to stretch the definition of "subsidy" to the limits of absurdity. I think a reasonable person would understand the difference between a subsidy and a wage.
I also never said that the transit subsidy was a subsidy for Metro. Metro is definitely subsidized by the federal government (just as it is subsidized by the other jurisdictions), but I think of the transit subsidy as a subsidy for riders rather than for the system itself. Obviously, if my employer did not offer a transit subsidy, then my employer would not be subsidizing my ride.
by Scoot on Feb 20, 2013 6:16 pm • link • report
by TransitGuy on Feb 21, 2013 8:33 am • link • report
At best we will have a small portion of the workforce taking off a day a week. It's not going to be that big a hit.
by MLD on Feb 21, 2013 8:46 am • link • report
This would have a greater effect on making transit cheaper and increasing ridership in the off-peak hours, including weekends.
by Railman on Feb 21, 2013 9:06 am • link • report
The better option (although some riders won't like it) is to reimpose the peak of the peak surcharge in a smarter way and use the revenue to decrease off peak fares. I'd draw a cordon around the core stations (which themselves are also starting to reach capacity during the peak periods) and charge a surcharge of say $1 for every trip that exits during the peak of the peak in the AM and enters during the peak of the peak in the PM within the cordon. I'd use that money to roll back a good chunk off peak fare increase that was implemented as part of the last fare increase. I'd then increase the peak of the peak surcharge over time to manage the system during peak periods. The period the surcharge applies could increase over time as would the amount of the surcharge. The aim would be to keep the system from breaking down due to overcrowding in the core area.
I know this would be controversial, but lacking a clear policy on fares, I would aim to carry the most riders with the subsidy available. The current fare policy prices off riders during the midday, evening, and weekends which makes no sense. There's plenty of capacity during the off peak, so why are we pricing riders off the system when the fare elasticities are higher? The system should look to increase fares where elasticities are low (peak period riders to core station) and not high (off peak riders).
by Dharm on Feb 21, 2013 10:13 am • link • report
by Scoot on Feb 21, 2013 10:24 am • link • report
You are right about the need to build additional lines, however, I think finding the money to squeeze every ounce of capacity (e.g. 8 car trains) will be hard enough. Finding the money to build new lines will be even harder. The other alternative is to manage demand on the rail system by raising fares higher than the rate of general infalation. London has done this for over a decade where both Tube and National Rail fares essentially rise anually at CPI + 2 percent or more. This reflects the reality that they don't have money to build enough new lines to accmodate growth so they manage the systemt through higher fares. This has the practical impact of getting people off the rail system and onto sidewalks, bikes, and buses.
by Dharm on Feb 21, 2013 10:54 am • link • report
but since, so far, it seems that most people telework on fridays (which is also a big RDO day, etc) it does worsen the peaking problem. Now your ridership is concentrated at rush hour FOUR days a week.
by AWalkerInTheCity on Feb 21, 2013 11:06 am • link • report
Perhaps I was not clear originally. Even though transfer riders are not entering or exiting the system at the core, they are still on the platforms and crossing between the upper and lower levels of those stations. Those riders contribute to the crowding problem but would not pay your hypothetical enter/exit surcharge.
Given that many riders commute from the outlying stations to the core in the AM and from the core to the outlying stations in the PM, you'd need better alternatives to make the surcharge a deterrent. If the choice is between paying a $1 surcharge to travel from Vienna to Metro Center or traveling from Vienna to Rosslyn and taking a bus from Rosslyn to Metro Center, which one would you choose? I'd choose the surcharge.
by Scoot on Feb 21, 2013 12:31 pm • link • report
by Andrew Schmadel on Feb 21, 2013 12:35 pm • link • report
Regarding your comment on choices, I think it makes sense. However, I think what you miss is some riders may choose to shift their trip out of the period during which the core surcharge applies, and some may choose to drive instead of take Metro. To make a meaningful difference in modifiying the behavior the surcharge may have to be higher. However, I picked a $1 because it was higher than the now defunct peak of the peak surcharge and easy to understand.
by Dharm on Feb 21, 2013 12:39 pm • link • report
Part of the reason that the peak of the peak surcharge is now defunct is that it did not really shift ridership out of the peak period. http://www.wmata.com/about_metro/board_of_directors/board_docs/041411_4AReviewofFY2011FareChangesRev.pdf
by Scoot on Feb 21, 2013 12:48 pm • link • report
Also, the gates couldn't handle having the peak hour at different times by station, yet the busiest hour at Shady Grove is a lot earlier than at Woodley Park, so it would be unfair to someone at least in the AM.
by David Alpert on Feb 21, 2013 1:00 pm • link • report
24.5 miles (one way)*0.565 (IRS standard mileage rate)=
$13.84 *2 (for both directions)= $27.68
Parking at office = $25.00 a day
Driving total per day = $52.68
(Drive time: between 35 minutes and 2 hours one way)
METRORAIL:
4 mile drive to station (one way)*0.565 (IRS standard mileage rate)= $2.26 *2 (for both directions)= $4.52
Parking at station = $4.75
Metrorail fare ($5.25*2 for both directions)= $10.50
Metrorail total per day = $19.77
(Travel time car/metrorail: 1 hour one way
I now live in DC and walk to work; but always thought Metrorail was underpriced when compaired to driving"
Not really a fair comparison without considering the different benefits of the 2 forms of transport:
Driving:
Guaranteed seating
Privacy (some)
Ample storage space
Control over sound environment (music or (relative) silence)
Ability to eat/drink (carefully)
Lower risk of crime
Other?
Metro:
Lower risk of accidents (presumably)
Ability to read/play games
Environmentally conscious
Other?
If you consider the value of these benefits, I'm not sure that Metro is substantially cheaper.
by Chris on Feb 21, 2013 6:18 pm • link • report
While I think you dop have some points, I think it's not really a fair price comparison. Buses in the area generally get no preference on the road compared to cars but should. Parking is often included for employees. The pollution is not priced into the cost of gas. Many roads do not have tolls and the cost of road maintenance is not partially offset from the gas taxes. While I think the price comparison you list may be more accurate from an economic stance, most people only see possibly the parking charge but the cost of gas, depreciation, and car maintenance are far removed from being visibly paid for on a daily basis. If those costs were more visible, I imagine there would be a noticeable shift in views.
by GP Steve on Feb 21, 2013 10:57 pm • link • report
You missed one of the biggest reasons transit riders say they ride transit - it's less stressful than driving in traffic. That combined with what you listed as "ability to read/play games" - which is really ability to do something with your time rather than having to drive while you commute - I think are pretty big benefits.
Also
by MLD on Feb 22, 2013 8:03 am • link • report
by Mike on Feb 22, 2013 9:16 am • link • report
"You missed one of the biggest reasons transit riders say they ride transit - it's less stressful than driving in traffic."
I guess I can see that, but for me it is less stressful to be sitting comfortably (relatively) in my car, listening to the radio and maybe sipping coffee. The drive is sometimes slow but rarely stressful, unless I am late for a meeting, in which case Metro is equally stressful.
"That combined with what you listed as "ability to read/play games" - which is really ability to do something with your time rather than having to drive while you commute - I think are pretty big benefits."
Yes, but that is contingent on getting a seat on Metro, which is a big IF during rush hour. Also, in the evening, since Metro seems to follow the train schedule pretty loosely, I usually end up having to kill 10-20 minutes waiting in the station that I could be spending at home. It would be nice if they could add a little more lighting on the platforms to make it easier to read.
by Chris on Feb 22, 2013 2:07 pm • link • report
by Capt. Hilts on Feb 22, 2013 3:56 pm • link • report
by Capt. Hilts on Feb 22, 2013 4:09 pm • link • report
Compare:
Rt 28: less expensive "Island Platform" design
Fairfield: more expensive "Dual Platform" design
(because they have express tracks between the local tracks)
Rt 28: Half-length canopy over the single platfrm
Fairfield: Full-length canopies over both platforms
Rt 28: can accommodate 8-car trains
Fairfield: can accommodate 12-car trains
And yet, our Rt 28 station costs 2.4 TIMES what the Fairfield, Connecticut station cost just over a year ago.
Is it just me, or is there something funny going on here? How can this be? (Hint: the US DOT inspector General found a general culture of corruption at the contract managing agency in charge of that job - including one contractor getting contracts funneled to it at 1.3 to 3.3 times the price that other contractors charged for the same work, and including managers receiving lavish gifts and perks from contractors, etc. Hmmmmm.)
And how do you suppose that kind of nonsense might affect the cost of our Metro service in the DC area? (Hint: it won't make it cost less.)
by Bob Bruhns on Feb 24, 2013 12:39 pm • link • report
Fairfield, CT doesn't have a Metro. I guess you're talking about the new commuter rail/Amtrak station there - the station is called "Fairfield Metro" but that doesn't make it the same technology. That makes a lot of the costs different for several reasons.
Any cost estimate between the two is hard to compare because we don't know what costs are included. The Fairfield station was an infill station so the tracks were already there. "Station" cost estimates for the Dulles Rail line likely include the cost of tracks and infrastructure that are not strictly part of the "station."
Single vs Double platform - in this case, the double platform at the infill station is actually the less expensive design. The tracks were already in place so they just had to build the station platforms around them. Building a single platform in the middle would have required tearing up tracks which would have been much more expensive.
The Innovation station will require much more infrastructure than simple commuter rail platforms. The station in Fairfield doesn't have faregates, a separate mezzanine area, or many of the other features required to have a closed fare environment.
by MLD on Feb 25, 2013 8:49 am • link • report
Ever wonder why we never have transit strikes at WMATA? It's because they are prohibited by federal law. If the unions and WMATA cannot reach agreement on a labor agreement, it goes to binding arbitration. The arbitrators have intepreted the federal law that creates the arbitration process as saying that the law protects local governments from excesssive demands from WMATA, but not rides who pay fares. Since the arbitrators decisions are BINDING on both WMATA and the unions, WMATA cannot use a lock out as a method of gaining further concessions.
The big thing to do now as riders, is pray that the stock market doesn't crash. You see WMATA union members contribute nothing towards their pension, so if there is a crash WMATA has to make contributions to make the various union pension funds whole. Trust me, a big stock market crash would make cost of living adjustments and health insurance premium incrases look like small change.
by Dharm on Feb 25, 2013 9:23 am • link • report
No, the Dulles Rail tracks are tallied separately from the stations, as are the traction power stations, parking garages, etc. FTA made a mistake and included the Rt 28 parking garage estimate in the Rt 28 rail station estimate in July 2011, but they corrected that mistake a few weeks later.
Also, the Fairfield Metro station has two platforms on either side of the New Haven line tracks, exactly _because_ there were express tracks between the existing local tracks. And the fact that the Fairfield Metro station is an infill station made it more expensive to build, not less, because trains are rolling past all day long, and the workers have to watch out for them, and the workers can't block the tracks with their work. The 12-car train capability and the full-length canopies over the platforms on both sides of the tracks made the Fairfield price significantly higher than the Rt 28 station with its 8-car train capability and half-length canopy. Yet, the Rt 28 station is estimated to cost 2.4 times as much as the Fairfield station.
There is nothing about these stations that justifies a Rt 28 station price that is 2.4 times as high as the Fairfield station. We are talking about $101 million for Rt 28, versus $42 million for Fairfield. However, there appears to be something strange about the Dulles Rail / Silver Line estimates - almost all of the line item prices in the Dulles Rail / Silver Line line item estimates were concealed, because of a trick government-business contract, and the project was managed by an agency that was very good at jacking up prices. We were able to see a few of these line item prices when the project managing agency had gotten so out of control that the FTA and the entire US DOT were brought in to reduce the project cost. Unfortunately, these agencies only made a few up-or-down decisions on a few line items in the project - they did not look at the excesses in the line item prices themselves.
However, a later audit by the US DOT Inspector General found incredible corruption in the Dulles Rail / Silver Line construction manager MWAA, including the funneling of contracts to a mysterious "Contractor A" at 1.3 to 3.3 times what other contractors charged for the same work. Such practices would obviously produce prices in the vicinity of 2.3 times what they should be. Interestingly, this is exactly the kind of excessive price that is found in the Rt 28 Station.
The simple above-ground parking garage cost estimates in the Dulles Rail / Silver Line project are also ridiculously high, about $34,014 per space. This is two times what it should be.
What is really interesting in the Dulles Rail / Silver Line story, is that the news media did not pick up on the excess prices, or the strange 29% jump in the parking garage estimates between July 2011 and March 2012, or the 22% jump in the Rt 28 station estimate, when the estimates for the rest of the Phase 2 project barely changed in that same period.
by Bob Bruhns on Feb 27, 2013 3:41 am • link • report
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