Budget
Fairfax raises express bus fares, ridership plummets on one line
To balance this year's budget, Fairfax County raised the price of express bus routes 380, 595 and 597 from $3.00 each way to $7.00 each way. They didn't change schedules or service frequency. And they didn't make a similar change on three other lines, creating nearly ideal conditions for an economics experiment. The result: On two of these express bus routes, Fairfax lost little ridership and nearly doubled their revenue. Meanwhile, ridership and revenue plummeted on the third.
Fairfax didn't publicly explain their reasoning, but I believe it related to with the recent increase in federal transportation subsidy. Federal workers can now get $230 per month in transit passes, up from $120 per month previously. With that change, round-trip travel for federal workers less than about $12 per day is essentially free, providing a means for local governments to get additional revenue without losing much ridership. However, this depends on riders being primarily government workers, and not having close substitutes for their commutes.
The baseline data showed a slight increase in ridership from June to July. Average ridership grew between 1.75% and 7.8% for lines 171, 401 and 950, whose fares did not change.
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For lines 595 and 597, which travel between park and rides in Reston and Pentagon/Crystal City, respectively, the lines experienced modest drops in ridership, about 20%. Combined with nearly doubling of fares, the change resulted in a net revenue gain for the county, nearly doubling. This is probably due to the high government employees ridership and lack of close substitutes for these lines. The nearest substitute other than driving would be to take a bus to West Falls Church, take the Orange line and then transfer to the Blue line, a "three seat" ride. According to the schedules, that trip takes approximately the same amount of time, but with three vehicles, it's more likely that one of them would have a problem.
In contrast, ridership on line 380, from Franconia/Springfield to the Pentagon, dropped by almost 80%, and average revenue was cut in half. Although the ridership is likely a lot of government workers, the Blue line provides the same trip with a much better frequency, about the same travel time, a more comfortable ride, and after the fare change, about half the cost.
These results show that it's sometimes possible to get more revenue by raising fares, but the results depend heavily on the circumstances. Fairfax should reconsider its decision to raise fares so heavily, at least on the 380. Where there are close substitutes, large fare increases can actually decrease revenues and are counterproductive. Now there are fewer people riding the 380 and paying more each, so the county has to subsidize the bus line even more.
The county has informed me that they are studying a new variation of the 380 line to visit more park and rides and charge a lower fare. This is in the preliminary stages so it would still need to be vetted by Supervisors for impact on their constituents. It is still a very, very rough draft plan.
 | Michael Perkins blogs about Metro operations and fares, performance parking, and any other government and economics information he finds on the Web. He lives with his wife and two children in Arlington, Virginia.    |
Comments
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by Rob on Aug 31, 2009 12:59 pm • link • report
Transit should not be seen as an expense, but as savings on road maintenance, time, and pollution.
By the way, on the subject of the $230 per month you can get pre-tax. Does anybody know with WMATA is considering increasing the maximum value of the smartrip cards to more than $300? $300 was reasonable when the maximum monthly amount was around a hundred bucks. Remember that if you don't use your money within a month, you loose it.
I did ask smartrip about this, but they referred to WMATA saying WMATA had no plans currently.
What is the effective path to get WMATA to increase the maximum value of a metro card?
by Jasper on Aug 31, 2009 1:05 pm • link • report
by ah on Aug 31, 2009 1:20 pm • link • report
It's a good deal, but not as good as many people think it is.
I also do not understand this phrase:
With that change, round-trip travel for federal workers less than about $12 per day is essentially free,
The money still comes out of your pre-tax salary. It is not free money. You just don't pay taxes over it.
by Jasper on Aug 31, 2009 1:35 pm • link • report
by Michael Perkins on Aug 31, 2009 1:50 pm • link • report
by Jake on Aug 31, 2009 1:51 pm • link • report
If they are, and if the 380 is still losing money, what's the harm in eliminating it?
by Gavin Baker on Aug 31, 2009 1:59 pm • link • report
Given that there are almost 50 bus transfers that could be made from the 380 terminus, I think it is presumptuous to assume that ridership is down solely because of the fares. These bus transfers take passengers to numerous private sector destinations, which are still in lay-off mode, in case you haven't noticed.
I think it is likely that at least some of the ridership is not merely changing their commute route, but not commuting at all.
by ogden on Aug 31, 2009 2:07 pm • link • report
I don't know enough about the people riding the route currently to know what the harm is in eliminating it. It would seem like there's not much harm, and the eliminated buses could be used to improve other service, but it's hard to say without more information.
@Jasper: As soon as you can get VDOT or the people saving time and pollution to reimburse Fairfax for the cost of operating their buses, I'm sure Fairfax would be very interested. Until then, they had to balance a budget, and raising the fare on these routes was part of that strategy. Transit has diverse and non-obvious benefits, and it's often difficult or impossible to get some of those that benefit from transit to pay for it.
We did discuss this in an earlier post, it's just nice to see the data matching what we were thinking.
by Michael Perkins on Aug 31, 2009 2:10 pm • link • report
Seems like a cheap and easy way to answer most questions about the actual harm (or lack thereof) of a given change.
by Gavin Baker on Aug 31, 2009 2:13 pm • link • report
Of course, if you've built up $300 on it from the federal subsidy, you're taking too much.
by ah on Aug 31, 2009 2:16 pm • link • report
If the layoffs were affecting the bus ridership market, why were the other three bus lines not affected at all? Why were the 595 and 597 barely affected? They have terminii at the same location or relatively close by (they're one-direction lines, so we're talking Pentagon/Crystal City in the AM).
I will ask for metrorail station entrances/exits for Franconia/Springfield for the months of June and July so I can see if there was a corresponding bump, but it's probably masked in the noise.
by Michael Perkins on Aug 31, 2009 2:19 pm • link • report
by Rob on Aug 31, 2009 2:50 pm • link • report
Damage to roads from vehicles scales as the fourth power of the vehicle's axle weight. The rear axle of a typical transit bus is about 24,000 pounds, which does as much damage 65000 cars with 1500 pound axle weights, or about as much as 155 fully-loaded-down Hummers.
This is one factor that is often overlooked when contemplating exclusive bus lanes with high frequency service, especially if there are expectations for (high) ride quality on the buses.
by thm on Aug 31, 2009 2:50 pm • link • report
by цarьchitect on Aug 31, 2009 3:15 pm • link • report
This is debated at length by smart people here: http://transportation.nationaljournal.com/2009/06/is-it-time-for-the-feds-to-fun.php
by Michael Perkins on Aug 31, 2009 3:18 pm • link • report
@ ah: Can't buy a second one. My employer will only desposit into one card. And rightfully so. I am just bringing up the point because it's a lot easier to go over $300 if you're using between $150-$230 a month. Not using for a week or two because of a vacation can push you over. There's all kinds to fix it. You could collect later. More user friendly would be to max out smartrips to three months of maximum benefits (what they started at). However, WMATA has no incentive to do that, because they get to keep money if it isn't used.
@thm: You are not including the dwelling time of the vehicle. I would have to see some good documentation before I believe that one swift moving bus does equal damage as 155 Hummers stuck in stop-and-go traffic.
@ Michael Perkins: As soon as you can get VDOT or the people saving time and pollution to reimburse Fairfax for the cost of operating their buses, I'm sure Fairfax would be very interested.
Euhm, increased productivity? I would work longer if my commute was shorter. I did so in the past. How 'bout time to go to the mall/gym/theater after work in stead of standing in traffic? Either way, VDOT as well as the county benefit because of increased tax revenue. Either I spend more on sales tax (VDOT) or I buy a bigger home (county).
by Jasper on Aug 31, 2009 3:39 pm • link • report
If anything, I'd imagine fast movement actually wears out roads faster - the shifting between lots of weight and nothing in rapid succession.
by Alex B. on Aug 31, 2009 4:04 pm • link • report
Seriously, not to be flippant, but unless Fairfax County Connector actually gets their hands on real money, they can't just run buses because they help the economy. You have to translate helping the economy into real government revenue that goes into Fairfax Connector's hands. Until then, Fairfax Connector has to make the "goes out" equal to the "goes in" and fares get raised or buses get cut.
by Michael Perkins on Aug 31, 2009 4:18 pm • link • report
does anyone remember the entry about the person who started a blog tracking Next Bus accuracy? Does anyone know how I can find that entry? I clicked on buses to the right, but it wasn't there. Thanks.
by Jazzy on Aug 31, 2009 4:39 pm • link • report
I know what you're trying to say, but I wonder if those arguments also go for roads in general. Did anybody do that calculation before repaving a perfectly fine part of 123? Did anybody argue such on the subject of the completion of the Fairfax County Parkway?
It is a ridiculous double standard.
by Jasper on Aug 31, 2009 5:56 pm • link • report
by Michael Perkins on Aug 31, 2009 5:57 pm • link • report
by Michael Perkins on Aug 31, 2009 6:55 pm • link • report
As for the different mechanisms that VDOT and a county work by. I don't give a . They both work for me. I do not want to hear them whining about organizational
by Jasper on Aug 31, 2009 8:32 pm • link • report
by Jazzy on Aug 31, 2009 8:47 pm • link • report
by Michael Perkins on Aug 31, 2009 10:53 pm • link • report
by michael on Sep 1, 2009 11:13 am • link • report
Do you know how they figured people would react to the fare change (price elasticity of demand)?
by Michael Perkins on Sep 1, 2009 11:33 am • link • report
From my understanding, they are hoping to cut the 3rd route that isn't performing with the new high fare.
From my understanding, they simply told their riders they would cut the lines and the reaction was, "Wait, wait! These are so valuable to us! We'll pay the full cost!" I don't think they did any economic analysis of elasticies and such.
by michael on Sep 1, 2009 11:36 am • link • report
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