TTI REVIEW OF FARE POLICY: PRELIMINARY FINDINGS
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1 TTI REVIEW OF FARE POLICY: PRELIMINARY FINDINGS December 2014
2 STATUS: TTI REVIEW OF FARE POLICY Goal: Identify and evaluate different options for a revised fare structure, including pricing strategies and fare collection technology Task Review and document METRO Board fare policy goals Review historical changes in fare structure to document impact on ridership and revenue Review fare elasticity model Peer comparison of current fare policy Identify fare structure options for analysis Evaluate and recommend fare structure options; determine technology impacts Status Completed Completed Completed Ongoing Ongoing Ongoing 2
3 PREVIOUS FARE POLICY GOALS REFLECTED DIFFERING EMPHASES Goals 2005 Simplify fare structure Reduce fraud Improve equity Improve fare recovery Speed bus operations Goals 2009 Increase revenue Improve fare recovery Goals 2011 Increase ridership Improve fare recovery 3
4 BOARD ACTIONS REGARDING FARES REFLECT ORGANIZATIONAL PRIORITIES Date Action Priority Resolution Jul 1991 Increase all fares (Local: + $.15; P&R: + $.30 - $.60; METROLift: +$.15) Offset cost increases, improve fare recovery ratio Dec 1996 Add Day Pass Increase ridership Sept 2006 Oct 2008 FY 2009 Restructure fixed-route fares, add smart card, eliminate most passes Increase fixed-route fares, (Local/Rail: + $.25 P&R: + $.50 - $1.00) Increase revenue, simplify payment Increase revenue, improve fare recovery ratio Mar 2013 Reinstate Day Pass Respond to riders, increase ridership
5 TRENDS IN RIDERSHIP, FARE REVENUE, AND FARE RECOVERY RATIO Fare Revenues and Ridership in Millions % 25% 20% 15% 10% 5% Fare Recover Ratio 0 0% Fare Recovery Ratio Fares in Millions of Dollars Ridership in Millions 5
6 FARE INCREASE +25% IN 2009 RESULTS: REDUCED RIDERSHIP, INCREASED REVENUE Fare Elasticity Model Forecast February 2006 Actual 2012 Compared to Baseline 2008 Actual 2013 Compared to 2012 Ridership % % + 4.0% Fare Revenue % % + 8.8% Forecast and actual ridership were nearly identical. 6
7 PEERS FOR FARE POLICY AND STRUCTURE Los Angeles $1.75 Portland Seattle Phoenix $2.00 Salt Lake City San Antonio $1.20 Denver $2.25 Dallas Austin $1.25 Houston $1.25 Minneapolis $2.25 Atlanta Miami $2.25 Philadelphia $2.25 Washington DC $1.75 7
8 PEER CITY AND TRANSIT AGENCY LISTED IN ORDER OF SERVICE AREA POPULATION Los Angeles (LA Metro) Salt Lake City (UTA) Washington, DC (WMATA) Seattle (King County) Phoenix (Valley Metro) Minneapolis Metro Houston METRO San Antonio (VIA) Philadelphia (SEPTA) Atlanta (MARTA) Denver RTD Portland (TriMet) Miami-Dade Transit (MDT) Austin (Capital Metro) Dallas (DART) 8
9 PEER BACKGROUND MODE MIX NATIONAL TRANSIT DATABASE 2012 LA Metro WMATA Valley Metro METRO Bus x x x x x x x x x x x x x x x Demand Response* x x x x x x x x x x x x x Commuter Bus x x x Trolleybus x x Bus Rapid Transit x Light Rail x x x x x x x x x Street Car Rail** x x x Heavy Rail x x x x x Commuter Rail (incl. Hybrid) x x x x x x Vanpool x x x x x x x x Automated Guideway x SEPTA Denver RTD MDT DART UTA King County Minn Metro VIA MARTA TriMet Capital Metro * ADA paratransit provided by independent regional agency in LA and Minneapolis **Portland Streetcar operated by TriMet, owned by the City of Portland 9
10 Criteria Used to Select Peer Transit Agencies Agency Dedicated Tax for Transit Rail System Status TCRP 141 Peer* Other Interest LA Metro Sales Tax Mature/Expanding Regional Fare WMATA No Dedicated Tax Mature Regional Fare Valley Metro Sales Tax Building Regional Fare METRO Sales Tax Building X SEPTA No Dedicated Tax Mature Use of Fare Technology Denver RTD Sales Tax Mature/Expanding X Use of Fare Technology MDT Sales Tax Mature X Regional Fare Media DART Sales Tax Mature/Expanding X Regional Fare Media Use of Fare Technology UTA Sales Tax Building X Use of Fare Technology King County Minneapolis Metro Sales Tax Motor Vehicle Fee Sales Tax & Motor Vehicle Excise Tax Building Building X Regional Fare Use of Fare Technology Regional Fare VIA Sales Tax No rail X MARTA Sales Tax Mature X Regional Fare Media TriMet Employer Payroll Tax Mature/Expanding X Regional Fare Media Capital Metro Sales Tax Building X *Transit Cooperative Research Program (TCRP) Report 141: A Methodology for Peer Comparison 10
11 Most Peer Agencies Charge Higher Base Fare and Increased Fares More Recently $3.00 $2.00 $1.50 $1.00 $0.50 $0.00 $ $ $1.60 $1.75 $ $2.00 $ $1.25 $ $2.25 $ $2.25 $ $2.25 $ $2.35 $2.25 *2015 $ $ $1.10 $1.20 $ $ $1.00 *2015 $1.25 Previous Fare Current Fare *Capital Metro will increase from $1.00 to $1.25 in January 2015 and King County Metro will increase from $2.25 to in March
12 METRO s Fare Recovery Ratio is Low Compared to Most Peers Expense/Fare Revenue in Millions $1600 M $1400 M $1200 M $1000 M $800 M $600 M $400 M $200 M $ M 29% 47% 21% 18% 39% 27% 24% 14% 23% 29% 31% 15% 32% 28% 12% 2012 Total Operating Expenses 2012 Fare Revenue 12
13 PEER AGENCIES EMPHASIZE GOAL TO RECOVER SHARE OF OPERATING COST Goals Cited by Peers Recover a share of operating costs Pace fares with consumer price index (CPI) Other goals: Ease of use Increase ridership Equity Specific discounts for disadvantaged groups Reduce cost of fare collection Align with regional fare pricing Emphasize use of stored value card to reduce cash Reward frequent riders with multi-trip discounts 13
14 PEERS WITH A REGIONAL FARE SYSTEM OR REGIONAL FARE MEDIA Los Angeles Metro WMATA Valley Metro MDT DART King County Minneapolis Metro MARTA TriMet Goals Seamless to customer Coordinate trips Increase ridership Increase fare revenue Challenges Common goals Selection fare media Rationalize fares Revenue sharing 14
15 THREE TYPES OF FARE TECHNOLOGY Closed-Loop Smart Card Benefit: No requirement for wireless technology Concern: Proprietary software; Distribution can be issue Open-Loop Payment Benefit: Open to variety of media; Customer flexibility Concern: Requires wireless technology; Fees for media Mobile Device Ticketing Benefit: Smartphones to pay fares and as tickets/passes Concern: Equity (not everyone has a smartphone) 15
16 METRO S CLOSED-LOOP SMART CARD IS SIMILAR TO SEVERAL PEERS Agency Smart Card/Open Payment/Mobile Ticketing Options Minneapolis Metro Closed loop smart card King County Closed loop smart card LA Metro Closed loop smart card MARTA Closed loop smart card MDT Closed loop smart card WMATA Closed loop smart card UTA Open payment system AND Closed loop smart card Capital Metro Mobile ticketing app DART Mobile ticketing app SEPTA Open payment system field testing in January 2015 AND Closed loop smart card VIA Smart card system launch as soon as fall 2015 TriMet Open payment system to be launched in 2017 Currently offer mobile ticketing app Denver RTD Planning a smart card system 16
17 PEER AGENCY POLICIES FOR PAID PARKING AT TRANSIT FACILITIES VARY Free no charge for parking Capital Metro; VIA; UTA; TriMet; King County; Minneapolis Metro; Valley Metro; MARTA (daily); MDT (bus P/R lots) Reserved paid parking LA Metro - 11 locations; WMATA - 35 rail stations Non-resident paid parking Denver RTD; DART tested non-resident area parking at selected lots and elected not to continue Paid parking SEPTA; WMATA (rail stations); MDT (rail P/R lots); MARTA (long-term parking over 24-hrs) 17
18 NEXT STEPS Goal: Identify and evaluate different options for a revised fare structure, including pricing strategies and fare collection technology Month January/February 2015 March 2015 Task Evaluate fare structure options and technology impacts Present final report of findings to Board 18
19 DISCUSSION Draft Fare Policy Goals 2014 Improve fare recovery Support Transit System Re-Imagining by facilitating transfers and reverse commutes Provide convenient fare payment options to customers Support seamless regional transit Take advantage of new fare collection technologies Additional Goals? REVIEW FARE POLICY AND FARE STRUCTURE PROJECT 19
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