Posts about Fares
Come spring, Boston's transit system, the Massachusetts Bay Transit Authority (MBTA), will start offering late-night service on all subway and 15 major bus lines. Like Metro, MBTA may charge higher fares for it. Could this discourage transit use?
Currently, the MBTA shuts down shortly after midnight seven days a week, leaving revelers and workers of unusual hours with no recourse but automotive ones. Under the new schedule, which is a one-year pilot program, Boston will match DC's practice of staying open until 3 am on Saturday and Sunday starting this spring.
The announcement was a big deal to native Bostonians like myself, who for years have been frustrated having to choose between staying out late and being able to get home. However, the MBTA is also considering emulating WMATA in another, less desirable way: charging higher fares for late-night service.
The MBTA may consider charging $3 or $3.50 after midnight instead of the usual $2 fare for a train ride. (Boston has a flat fare that does not increase, even during rush hour.) It's not hard to understand why WMATA charges rush hour fares during the wee hours, and why the MBTA might want to follow suit. Late-night public transit is a niche service that only a small subset of the population uses.
Rather than spreading the cost of providing it across the whole transit-using population of greater Washington, late-night riders should have to pay a little more to support their customized service, right? Put another way, if WMATA is expending a constant amount of resources for fewer-than-usual users, each user needs to pay more than usual in order to meet budget.
The problem is that Metro does not apply this logic evenly. If you accept this premise, then fares should actually be lower during rush hour, when huge ridership will never have any problem sustaining even elevated frequency of service.
Instead, the correct pricing principle is one that conforms to supply and demand. Metro rightly charges peak fares during rush hour precisely because that is the busiest time of day; it knows most commuters don't have the choice to be scared away by sticker shock then, and if they are scared away it knows it can absorb the blow.
Higher fares serve to some degree as crowd control; if we have to discourage transit use (which higher fares necessarily do), we ought to do so when transit use least needs to be encouraged. And, most elegantly, people rightly pay higher fares when they are causing the most strain on the system, helping to offset the wear and tear caused by rush-hour crowds.
The flip side of this, of course, is that WMATA, and the MBTA that seeks to emulate it, should charge its lowest fares when the system is least crowded. These are the times when transit use needs more incentives, and of course entrance fees are one of the most surefire ways to manipulate that.
By charging peak fares between midnight and 3 am, Metro is creating a deterrence, even a small one, to people taking public transportation. Crucially, peak fares after midnight also do not come with the benefit of extremely frequent trains that accompany rush-hour peak fares.
Of course, there is always the chance that fare manipulation may not have a huge effect on ridership after midnight. In that case, by charging off-peak fares, WMATA would give up revenue it currently relies on. However, it's dubious to think that the laws of pricing dynamics cease to apply after midnight.
Perhaps Metro volume is fairly inelastic during rush hour, when many people have to commute to work no matter what, and when many people feel that they have no other choice but to take the train because of DC traffic and the cost of car ownership. But people certainly do have a choice about whether and how to travel late at night. Lower fares after midnight would not only result in that many fewer Uber trips, but more importantly, they would entice more people to go out.
The upside-down fare system is unfortunate in DC, but in Boston, it could be fatal to its experiment of late-night service. MBTA officials will only make late-night transit permanent if enough people use the service during the one-year trial period. If higher fares deter people from taking the train, the MBTA may very well determine that there is not as much demand for the service as it thought.
This is a realistic worry; $3.50 doesn't seem like much, but it's a 75% increase on the fare Bostonians are used to paying; and for a group of four friends out at a bar, a taxi ride would only need to cost $14 to be an equal or better deal. Indeed, excessively high fares were one reason Boston's previous foray into late-night service, "Night Owl" buses that cost up to $4 one-way, went under. (The Night Owl's failure to attract riders is more proof that late-night ridership is not inelastic.)
Thankfully, because Boston is just reacquainting itself with late-night service, there is still time to avoid these mistakes. DC has fulfilled an important role by serving as the Boston's likely model for late-night service; a fellow cash-strapped system that needs all the overnight maintenance it can squeeze in, WMATA showed the MBTA that late-night service was still possible.
It's probably no coincidence that Boston is adopting the same weekend schedule, but that doesn't mean it should copy DC's methods wholesale. At least in the way late-night fares are structured, Boston can and should do better.
Starting this fall, students in DC will get to ride Metrobus for free, thanks to a budget surplus. It's good news for kids who take the bus to school. WMATA could take advantage of this opportunity and simplify its system for student fares as well.
Metro already offers a discounted fare for students, but it's hard to take advantage of it. In order to make our family eligible for student fares, my husband had to obtain the proper forms from our children's schools. One school had no idea what we were talking about.
Then, he had to take them in person to one of 4 Metro sales offices or WMATA headquarters, which are inconvenient to reach and only open on weekdays during business hours. Each form allowed us to purchase a bag of 10 tokens for $7.50. We have to transfer buses to get to school, so we would save 10¢ per trip, not accounting for the initial ride to the sales office.
Students can also get a monthly SmartStudent pass for $30, but only after they obtain a Student Travel Card from the District Department of Transportation. You can get it at the sales office or 8 DCPS schools, if a student goes there. But unless you use it roundtrip nearly every school day, it's more expensive than tokens.
We don't yet know how Metro or the DC Council will implement the fare change. I vote for simply allowing younger students to board the bus for free, while letting those who are older use their student ID. Of course, it probably won't be that easy.
A good option won't involve schlepping down to WMATA headquarters every month with new forms. The current system is not easy or convenient for parents who have 9-to-5 jobs or students who are in school all day. And if your school doesn't have the proper forms, you are out of luck. These hoops likely exist to avoid fraud, but there's got to be a better way.
Neighboring jurisdictions already provide student discounts in different ways. Students in Montgomery County can ride the bus for free on weekday afternoons with a student ID or buy a discounted Youth Cruiser Pass, though like DC, you can only buy them in a few places. In Arlington, students can use a student ID or tokens to ride for 75¢.
Giving students free bus fare is a great idea, but parents and students also need an easy and convenient way to take advantage.
Starting Monday, Metrorail riders can purchase a "short trip" pass online or at a fare machine and apply it to their SmarTrip cards. It's a big improvement for Metro customers that commute regularly and use Metro on the weekends or for additional trips in the evenings.
The pass costs $35 and is good for one week. It covers all off-peak trips and the first $3.50 of peak trips. If you take a trip costing more than $3.50, the difference comes out of the stored value on your SmarTrip.
Metro already offers SmarTrip passes that give rail riders unlimited rides of any length. Those cost $15 for one day, $57.50 for a week and $230 for 28 days. Those are useful for riders taking longer, more expensive trips. But those who only ride a few stops won't find that pass worthwhile. These new "short trip" passes are much cheaper because they don't cover long trips that riders may not need.
"Short trip" passes were previously available only as a paper farecard. If you took a trip of more than $3.50, you would have to use the Exitfare machine to pay the exact fare when leaving. Putting the pass on a SmarTrip card is much more convenient for riders who take the occasional longer trip, because the faregates can automatically calculate and deduct the extra fare.
Next, consider discounts and even passes for even shorter trips
You can also subscribe online to have the pass automatically renew when the old one is about to expire. For some riders, this is a good option. But since the pass costs the equivalent of 10 rides, it's not such a good deal that you'd want to set it and forget it, which could mean you'd end up buying one even on weeks with work holidays or vacation. I'd like to see a monthly pass with a discount, so that more riders would find it worthwhile to just buy passes automatically even around holidays.
Now that Metro's figured out how to implement a pass where people pay and get trips under a certain amount free, they could even try offering passes with a threshold below $3.50. For example, a pass that costs $100 per month and allows all trips under $2.50 each way for free might be very popular among riders that live in DC.
Give credit for bus transfers
One downside to the "short trip" pass is that it doesn't discount transfers between bus and rail. WMATA representatives have previously said that allowing transfer discounts to pass holders would be like giving discounts on top of discounts.
However, the transfer discount used to be available for pass holders when WMATA used paper transfer slips. When the WMATA Board approved replacing them with SmarTrip tracking, there was no discussion about eliminating the discount as well.
The discount isn't really a "discount," anyway. It's a recognition that a trip that uses bus and rail is really one trip on two modes, and the fare probably shouldn't be the same as two totally separate trips. You don't pay double the rail fare if you transfer between rail lines. In many cities, like New York, a bus plus rail trip costs the same as just one trip alone.
WMATA should restore the transfer discounts for all pass holders, and give riders with a rail pass the same reduced fare on the bus as any rider coming from a rail trip. Similarly, all riders should get the same fare when they transfer from bus to rail, whether or not they have a Metrobus pass.
All in all, "short trip" passes on SmarTrip are a great option, and I expect to subscribe to them in the future.
Nearly every Metro fare machine has a paper sign on it: "Using a paper farecard? Add $1 to every trip." Yet even with this reminder, some riders get stuck at the faregates, wondering why Metro won't let them leave.
Most people riding Metro use SmarTrip, and that's great. But the ones that are more likely to need extra help with a fare table are the infrequent customers that use a paper farecard.
It makes no sense to list SmarTrip prices on the fare table and then ask people to add $1. Riders shouldn't need to do math to figure out how much to put on their farecards. We want to make purchasing a farecard as easy as possible, while not necessarily offering them the best deal possible.
The simplest solution would be to list the paper farecard prices on the tables, and then have notes that SmarTrip riders get a discount. Even if these riders don't notice, they'll just end up with extra money on their cards, which they can use later.
An even better approach would be to eliminate the $1 surcharge, and instead always charge peak fares for people using paper farecards. The fare machines would simply list the peak fare for each destination, with a note that SmarTrip customers get discounts during off-peak, discounted transfers to and from trips on buses, protected fare balances (with registration) and a guarantee that they won't be trapped in the system if their balance goes too low.
All paper farecard customers would have to do is look up their destination, and make sure their farecard had the corresponding amount. No math, no timetables, no figuring out whether it's currently peak or off-peak.
WMATA spokesperson Dan Stessel said the agency is aware of the confusion and complaints about these signs, and is "considering" making changes to the posted fare tables and signs.
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.
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.
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.
Metro fares rose on Sunday, and the surcharge for a paper farecard increased to $1 per trip. Metro chose to list the SmarTrip fares, not the paper farecard fares, on the fare tables, along with a separate note about the surcharge. This could create significant confusion for the riders most likely to consult the tables: tourists using paper cards.
Metro could, instead, have shown both the SmarTrip and paper farecard fare for peak and off-peak trips, but this would show a lot of information and would likely be too cluttered. Or, they could show the paper farecard prices with a note that SmarTrip users save $1 per trip.
Vistors and infrequent riders, who need to look up their fare for a specific trip, are the ones most likely to use the tables. Since these riders are more likely to use a paper farecard, it makes more sense to list the paper farecard fares and have a note that you save $1 by using a SmarTrip card.
With the fare table Metro chose, a customer that doesn't notice the note would buy a card with the fare listed on the table, get to the destination, then get frustrated when they realize their farecard doesn't have enough to pay for the trip. The exit fare machines don't take credit cards, so customers that don't carry cash could end up stuck (or station agents will let them out without paying).
If Metro instead listed the paper farecard prices and stated there was a Smartrip discount, the worst case is that a SmarTrip customer would end up with an extra dollar per trip on the card. SmarTrip customers are more likely to load a larger amount regardless of the price of an individual trip, so this is not likely to be a huge problem.
Further, Metro's latest improvements to SmarTrip allow you to add fare online or have your account automatically topped off when your balance gets low, so SmarTrip rail customers are not as likely to need to use the fare vending machines or the fare tables.
Metro spokesperson Dan Stessel defended the move. He wrote in an email:
Today, roughly 80 percent of Metrorail trips are taken with SmarTrip cards. We wanted to show what the vast majority of customers would be paying as clearly as possible.This is all technically correct, but ignores the key difference between different types of customers that use the vending machines. Many customers that use the fare vending machines don't look at the table at all, such as Smartrip customers topping off a card by adding a fairly large amount of money that they plan to use on multiple trips.
It is not correct to assume that the majority of people using the fare machines are paper transactions. Already, SmarTrip transactions exceed paper farecard transactions at the machines
— and the share of ST vs. paper will only increase over the next several months due to the surcharge.
Speaking of "surcharge," that's what we're calling it. It's not a "discount" for using SmarTrip, but rather a "surcharge" for using paper. So, the fare charts display the fares as they are, and there's a big bold box that says add $1 if you're using paper.
The customers that want to look up the fare for a specific trip or a round trip are more likely to be infrequent riders or visitors, are less likely to know the fare system well, and are less likely to be using SmarTrip.
Metro's leadership seems to feel that increasing surcharges on paper farecards will eliminate their use entirely, or reduce it to the point that the customer experience with paper farecards no longer matters. I disagree. Metro should make the system as simple as possible (though more expensive) for paper farecard customers.
Today is the 3rd anniversary of Metro's Red Line crash. Three years later, residents still consider Metro maintenance and reliability the top regional priority. Transparency and management effectiveness also came up as a very important issue.
In a recent focus group, respondents ranked the problem of deferred Metrorail maintenance as the top transportation challenge facing the region, ahead of traffic congestion.
Respondents also said that finding funding to repair transit, roads and bridges was the most important strategy to pursue, with circumferential transit behind that. Highways like an Outer Beltway (and more bike sharing) brought up the rear.
I'll be on NewsTalk this morning from 10-10:15 to talk about Metro's progress;
you can watch the segment live the archived video is online.
Metro maintenance rates as number one challenge
AmericaSpeaks conducted the focus group for the Transportation Planning Board on June 2. It recruited 41 people from around the region, whose geography and demographics fairly closely match the overall regional makeup, except that there weren't as many people in the highest income bracket as in the general population.
The organizers posed a series of transportation challenges and had respondents vote, using small remote controls at their seats, on how important each one is on a scale of 1-5 where 5 was the most important. Here are the average scores:
|Deferred Metrorail maintenance causes unreliability||4.62|
|The transportation system is too congested||4.36|
|Many people cannot access affordable and convenient transit||4.22|
|Many residential areas have limited transportation options||4.11|
|Aging roadways need repair||4.11|
|Bottlenecks are causing delays of inter-regional movement||4.00|
|Development and transportation are often not well-coordinated||3.89|
|Natural resources are threatened by transportation and growth||3.89|
|Traffic incidents are a major source of delays||3.87|
|Travel times to & from airports are increasingly unreliable||3.59|
|Pedestrian and bicycle fatalities are a growing concern||3.56|
|Air quality and public health standards are getting stricter||3.14|
69% of respondents ranked Metrorail maintenance as "very important," with nobody ranking it "low" or "very low." The much lower ratings for pedestrian and bicycle fatalities point to potential challenges in dealing with road safety; commuters may not be very eager to accept speed enforcement and traffic calming if they don't think that crashes are a big problem.
"Fix it first" is clear; suburban transit beats Outer Beltway
In a later part of the session, organizers asked participants about 6 potential strategies to improve transportation, and got these ratings:
|Secure Dependable Sources of Funding to Ensure "State of Good Repair" for Highways and Bridges||4.45|
|Create a Dedicated Regional Funding Source to Ensure "State of Good Repair" for Metrorail Trains and Facilities||4.43|
|Connect Existing Metrorail Lines with High-Quality, Circumferential Transit||3.51|
|Improve Pedestrian Facilities and Safety Around Bus Stops||3.29|
|Expand the Region's Highway Network, Possibly Including New Potomac River Crossings||3.05|
Clearly, repairing both roads and rails is the highest priority for people in this focus group. The perpetual boosters of the Outer Beltway, who have started talking about the idea as "new Potomac River bridges" instead, will likely be disappointed to find weak support for this compared to circumferential transit.
At the same time, sustainable transportation advocates may be disappointed at how bike sharing came in last. That is, at least, a far less expensive solution than most of the others.
Metro fares aren't that confusing after all
One other tidbit: Despite the common suggestions to create a flat or simpler Metro fare, participants in the focus group didn't seem to feel that the fare structure was any problem. In one section, they came up with their own sets of transportation challenges at tables, then voted on them.
In one set, someone came up with "Metro system, including cost structure, is hard to understand," but nobody voted for that one; "Lack of funding to support maintenance or expanding transportation options" got 43% on that vote, and "Existing funds are managed poorly, limiting quality of transit" got 34%.
Later, a potential strategy to "Simplify and/or restructure Metro fares" only got 4 votes out of 74 (I assume people could vote multiple times); the top choices were "Increase incentives and improve infrastructure for the use of transit, carpooling, walking, and biking," "Require agency transparency to ensure accountability," and "Encourage employers to support telework and alternative work schedules."
Transparency is on people's minds
In the aforementioned question, the way WMATA manages its money is clearly an issue people worry about, coming in second, with 34% of votes, to the need to just have enough money to make repairs, at 43%.
Later, the tables came up with 3 challenges around maintenance, repair and safety of transportation: "Lack of funding," "Lack of transparency, trust in management, and maintenance oversight," and "The general public doesn't realize the extent of maintenance needs." Here, again, the votes came out similarly. Lack of funding got 56% of the votes, while lack of transparency and oversight got 38%.
The two absolutely go together. If WMATA can show the public that it is managing repair funds effectively, riders and jurisdictions will be more willing to increase funding to achieve a state of good repair. Communication and customer service has improved, but it still can be better. WMATA remains a fairly secretive organization that often acts like riders don't need to know what's going on beyond the most basic customer information.
This mindset will remain a political obstacle until this CEO or a future one makes it a priority to reform the insular culture and turn riders into advocates instead of frustrated skeptics or angry critics. Because no matter how pressing Washingtonians think Metro's state of repair is, they'll be hard pressed to cough up more money to an agency they can't trust.
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- Deregulate Uber, but require transparency
- The war on Dana Milbank's car
- Red paint keeps drivers out of San Francisco's bus lanes
- This traffic light convinced pedestrians to wait with dancing