Arlington may quit regional bus pass without revenue deal

Transit

Arlington may quit regional bus pass without revenue deal

by Michael Perkins • June 23, 2010 12:45 pm

Metrobus pass holders currently enjoy free rides on all the regional bus transit providers, from DASH to Ride-On, Connector to "The Bus." Right now, WMATA does not share any pass revenue with those transit agencies.

Photo by BlindMadDog on Flickr.

This has become a sore point with Arlington's Chris Zimmerman, County Board Member and a member of the WMATA Board of Directors. At a recent committee meeting of the WMATA Board, he said,

The local providers have been honoring Metro's pass and not getting the revenue back that they're owed on the trip taken on their service ... We're having local providers say, "Look, I can't afford this any more." I'm having to look at cutting service because of increasing cost of running Metro anyway, and now we're losing hundreds of thousands of dollars.

According to Zimmerman, the regional operators agreed to honor the passes "more than a decade ago" under the belief that the paper flash passes would quickly switch to SmarTrip, allowing Metro to track the numbers of rides on each service and work out a revenue sharing deal. However, the passes on SmarTrip took far longer than expected, and now that passes are finally going on SmarTrip a decade later, the regional providers want that revenue agreement.

Under the Arlington County Board's recently approved transit fares, if a regional revenue sharing agreement cannot be reached, the County Transit system could withdraw from the regional bus pass and would issue a bus pass of its own. Combined with recent county efforts to replace Metrobus service with ART service, this degrades the value of a Metrobus flash pass, and hurts our regionally integrated transit system.

Board members Peter Benjamin from Maryland and Jim Graham from DC confirmed that those jurisdictions are interested in getting a share of pass revenue for the rides that are provided on local systems. Benjamin stated that the result would be "changing the subsidy level from local to Metro."

While it's true that this is all government money anyway, and any changes would be just payments from one government-subsidized transit system to another, the important thing is the amount of those transfers. Right now, the local governments provide service and get nothing from pass users. But a well-designed revenue sharing system would transfer revenues in a way that's related to how much service people are using, so a jurisdiction that provides service that a lot of riders are using would get a much larger transfer of revenue than one that doesn't provide much service.

Clearly, it would be preferable to maintain our region's interoperable passes, so some sort of revenue sharing needs to be devised. Tomorrow, I'll discuss some options and my recommended plan.

17 comments

Tags: Arlington, ART, buses, SmarTrip, unlimited passes, WMATA

How could Metro share regional bus pass revenue? (Jun 28, 2010)
Bring back bus-rail transfers for pass users (Sep 10, 2010)
SmarTrip passes will start with bus (May 6, 2009)
SmarTrip Web site, passes coming this year (Jun 8, 2010)
Paper bus passes extended through January (Jan 6, 2011)

Michael Perkins blogs here and at Infosnack 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.

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Revenue sharing would be very simple. Drivers already track how many passengers use passes. So take that total for the week (call it y) and divide each local bus system's number of rides (x) by it.

Then, take the total revenue WMATA took in from bus passes (z), and divide it amongst the systems by their share of the trips. So it'd be (x/y)z for each local system.

by Tim on Jun 23, 2010 1:05 pm

@Tim: Don't spoil the fun. :) You came to almost the same conclusion I did if I read yours correctly, so I hope that's what Metro and the local providers did too.

I heard that this week something is going to be announced.

by Michael Perkins on Jun 23, 2010 1:14 pm

The incompetence of Metro (or the contractor metro uses) with regards to upgrades to the Smarttrip system is astounding. They have been promising Smarttrip passes for 10 years?!

Think of all the hightech accomplishments that have happened in 10 years: the rise of Google, Youtube, and Facebook; the proliferation of cell phones and wireless laptops, four versions of the iphone.

The smarttrip hardware has been there for years- that was the hard part- There is no reason why these upgrades shouldn't have happened long ago.

by A on Jun 23, 2010 1:19 pm

quiet. you're not supposed to criticize metro on here.

by MPC on Jun 23, 2010 1:20 pm

@A: This article on infosnack gives some of the background on why the Smartrip is so f'd up.

http://www.infosnack.org/2008/09/wmatacubic-smartrip-contract-audit.html

Bottom line is Metro didn't have any penalties for contractor delays, and didn't work with the contractor to resolve technical issues promptly. That resulted in a 2003 contract that was supposed to be completed in 2005, end up with delays until 2008 and beyond.

The Smartrip upgrades contract is available in my scribd feed: http://scribd.com/perkinsms

by Michael Perkins on Jun 23, 2010 1:27 pm

Having each of the local transit systems split off would be supremely stupid. The WAMTA compact says that the purpose of the organization is, among other things, "to coordinate the operation of the public and privately owned or controlled transit facilities, to the fullest extent practicable, into a unified regional transit system without unnecessary duplicating service".

The local jurisdictions agreed over 40 years ago that a regional transportation system would be best for ensuring and managing the area's growth. To fragment the system now over budget squabbles would be ruinous.

by Adam Lewis on Jun 23, 2010 1:27 pm

Heavens, Zimmerman hijacking WMATA?

I'd like to be contrary and say this is all bunk, but it does seem fair.

The real problem seem to be the dual hatted duties of loyalty that people like zimmerman face? Should he be fair to Arlington or WMATA?

by charlie on Jun 23, 2010 1:52 pm

Wait, what?!

I;m sure I'm not the only one who assumed since forever -- 1999 -- that they had an agreement. "Of course there's a revenue sharing agreement. It's not that hard. Total up rides with passes and split it proportionally based the amount each service gets. It's just basic to think that Metro wouldn't be asking other buses to provide rides free, today." Amazing!

by Wes on Jun 23, 2010 1:57 pm

@Charlie: It's fair to both if Arlington gets some of the pass revenue when they provide rides to pass holders. WMATA has been getting a free lunch, collecting all the pass revenue even though Arlington is providing some of the service.

Note that this is only about *passes*. THe pay-per-ride system is properly accounted, and ART/Fairfax/Circulator/etc. get the revenue they are due when people pay per ride with a smartrip card.

by Michael Perkins on Jun 23, 2010 2:00 pm

@Mperkins; yeah, but shouldn't someone like zimmerman recuse himself from those decisions. Clear conflict of interest.

I've always wondered what happens when I take a circulator for $1 then transfer to a regular metrobus....how does the money split up. Definitely a bit of arbitrage there.

by charlie on Jun 23, 2010 2:17 pm

@Michael: On a related note, what happens when someone transfers from a bus on one system to a bus on another (or for that case, a bus on one system to Metrorail)? I assume the first system gets the money while the second one gets nothing. (In the case of Metrorail or another transfer from a cheaper ride to a more expensive one, I'd assume the first one get a full fare while the second one gets the discounted one).

But is that really fair?

by Tim on Jun 23, 2010 3:30 pm

It's more convoluted than many realize. Many of these suburban systems have commuter stores selling these passes that their buses honor (Arlington -- ART; Montgomery County -- Ride-On). Thus Metro has been pocketing -- and by budgeting this money, counting on continuing to pocket -- revenue from rides taken on other systems with passes sold by other systems, that never even involved WMATA. Metro is worried about sharing money that isn't theirs to begin with. Metro could decide not to 'share' it, but if ART and Ride-On stopped participating -- taking their bat home and stopped playing the game -- Metro won't get the revenue then, either. Thus, share or not, WMATA will no longer get these contributions/donations. They should never have budgeted these funds as if they were their own.

by not whining on Jun 23, 2010 4:38 pm

"Combined with recent county efforts to replace Metrobus service with ART service ..."

You make it sound like they wanted to replace Metrobus with ART. Wasn't it the case that the Metrobus was on the chopping block, and the county stepped in to preserve service?

by Gavin on Jun 23, 2010 5:53 pm

Couple of points:

Metro weekly or bi-weekly bus passes existed long before the fare simplification of 1999- 2000. Metro sold the passes and other providers accepted them without reimbursement. At the time base fares varied substantially among providers. Arlington may have operated about 4 buses and now may have about 20. Metro operates 1400 buses every rush hour.

The regional agreement had no hard language about revenue sharing but the intent has been recognized by Metro and Metro transfers several million dollars monthly to local bus providers.

Metro also recognizes daily passes sold by Montgomery Co. without any reimbursement.

Metro also provides the lions share of Smartrip and technical support to several of the regional systems.

From a business standpoint what is the utility provided by a pass product?

Smartrip already provides for seamless fare payment and transfers. Greatly reducing the handling of cash and speeding boarding times.

The region also needs to decide what riders should pay and what amount should be subsidized. The beauty of Smartrip is that allows each partner to continue to control it's own fare policy.

A weekly bus pass is not necessary and simply adds to the complication of backend settlement. The new pass is intended to be started by first use as opposed to the current rigid weekly periods.

by Interested on Jun 23, 2010 7:34 pm

Metro does not honor any Montgomery County fare media except metal tokens which are later exchanged between the two (Ride On tokens for Metrobus tokens and vise-versa). Metrobus 'honors'/accepts kids and senior id's for individual free rides, counts the passengers and sends MoCo a bill for which they are reimbursed. Metro provides almost all of the Smartrip technical support, but they are reimbursed for that, too, under a written MOU.

This issue is different than the previous ones, where there was a balancing of rides taken through a probable round trip. What is happening in this case is that WMATA has been/is budgeting as their revenue funds that they are collecting from pass sales for passes never used on their buses and often sold under consignment by a County for the use on that County's buses. Essentially, WMATA is getting all the revenue for providing printed tickets sold by another party used on the other party's buses.

WMATA won't get to keep this revenue even if they don't agree to share. Once the passes go plastic, the other systems will pull out, get their own SmarTrip 'purse,' and the revenue stream to WMATA will dry up. No matter what WMATA decides to do, the money from pass use on others' buses will not be coming to them (WMATA). Is it worth making life difficult for customers by making them carry multiple passes/purses because someone at WMATA staff can't see that they've been budgeting with someone else's money?

by not exactly on Jun 24, 2010 10:16 am

Had no idea that Metro still sold tokens. Where are they available?

by Matthias on Jun 25, 2010 2:07 pm

Not sure that they are still sold. They are still in circulation and honored ny WMATA and Ride On.

by not exactly on Jun 25, 2010 6:01 pm