caltrain fare studyfare+study/caltrain+fa… · this research and peer review serves to provide a...

Caltrain Fare Study

Draft Research and Peer Comparison Report

Public Review Draft

October 2017

Caltrain Fare Study Draft Research and Peer Comparison October 2017

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Research and Peer Review

Research and Peer Review .................................................................................................... 1

Introduction ......................................................................................................................... 2ANoteonTCRPSources...........................................................................................................................................2

Elasticity of Demand for Commuter Rail ............................................................................... 3Definition........................................................................................................................................................................3CommuterRailElasticity.........................................................................................................................................3

Comparison with Peer Systems ............................................................................................ 4Fares.................................................................................................................................................................................5EmployerPrograms...................................................................................................................................................9Means‐TestedDiscountsandSubsidies.........................................................................................................10

Agency Profiles ................................................................................................................... 11Metra.............................................................................................................................................................................12Metro‐NorthRailroad.............................................................................................................................................12UtahTransitAuthority(UTA)FrontRunner.................................................................................................13Metrolink.....................................................................................................................................................................13NJTransitRail............................................................................................................................................................14CoasterCommuterRail(NCTD).........................................................................................................................14

Lessons for Caltrain ............................................................................................................ 15

Appendix A ……………………………………………………………………………………………………………………...16


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Introduction

ThisResearchandPeerReviewservestoprovideabroadercontextforfarepolicyatCaltrain.ItpresentskeyresearchfindingsfromprimaryandsecondarysourcesonfarestructuresandpoliciesatothertransitagenciesandculminatesinkeylessonslearnedforCaltrain.

Inthefirstsectionofthisreport,abasicreviewofexistingresearchintofarepolicy,withanemphasisondemandelasticities,ispresented.TwomajorreportsfromtheTransitCooperativeResearchProgram(TCRP)providedamixofprimaryandsecondaryresearchforthispurpose.

Thesecondsectionofthisreportpresentsbasicinformationaboutfaresatpeertransitagencies.Thefareinformationfor19transitproviderswascompiledusingpubliclyavailablesources.ThetransitsystemsstudiedincludeAltamontCorridorExpress(ACE),BayAreaRapidTransit(BART),Amtrak’sCapitalCorridor,andNorthCountyTransitDistrict(NCTD)Coaster,aswellasthefifteenhighest‐ridershipcommuterrailroadsintheUnitedStates(ofwhichCaltrainisnumberseven).ThefareschargedbytheseoperatorsprovideasenseforhowCaltrain’sfarescomparetoother,similaragencies.Ananalysisofthecostofmonthlyandmulti‐trippassescomparedtobasefaresisalsopresented.Finally,keyfindingsfromastudyofoff‐peakdiscountsaresummarized,fromseveralcommuterrailroadsthatemploypeakperiodpricing,includingfourU.S.andthreeinternationalsystems.

Perhapsthemostreliableandcompellinginformationabouthowcommuterrailagenciessetfarescamedirectlyfromrepresentativesoftheagenciesthemselves.Thethirdsectionofthisreportsummarizesinterviewsthatwereconductedwithsomeoftheindividualsresponsibleforfarepolicyatsixrailroads.

ThefinalsectionofthisreportpresentssomeofthekeylessonslearnedforCaltrainasitrelatestofarepolicy,products,andstructure.

A Note on TCRP Sources In2003,TCRPreleasedTCRPReport94:FarePolicies,Structures,andTechnologies:Update.Thenextyear,TCRPpublishedTravelerResponsetoTransportationSystemChangesHandbook,ThirdEdition.Chapter12,titledTransitPricingandFares,focusedentirelyonfarepolicy,includingtherelationshipbetweenfaresandridership.

TCRPReport94describesthefullrangeofoptionsforfarepolicy,includingfare‐setting,discountprograms,andfare‐relatedtechnologies.Whileitissomewhatoutofdate,itcontainsawealthofinformationonhowmanydifferentagencieswereoperatingatthattime.

SincetheTCRPhandbookwaspublished,verylittlenewscholarlyresearchhasbeenconductedonfareelasticities(andevidentlynoneoncommuterrail).Despitehavingbeenpublishedin2004,thismakesthehandbookthebestavailablesynthesisonthetopicoffareelasticities.Thebookprovidessomeveryvaluableinsightsintowhatagenciescanexpectwhenmodifyingtheirfarestructure.


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Elasticity of Demand for Commuter Rail

Definition Theeconomicconceptofdemandelasticitysimplydescribestherelationshipbetweenthepriceofagoodandthequantityofthatgoodthatisconsumed.Insimplemathematicalterms:

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Goodswithanelasticityvaluethatisgreaterthantheabsolutevalueof1.0aresaidtobeelastic,sinceconsumptionchangesbyagreaterpercentagethantheprice.Anexampleofanelasticvalueis1.2,wherea10percentchangeinthepriceresultsina12percentchangeinconsumption.Agoodthatishighlyelasticisaprice‐sensitivegood,becauseasmallchangeinpriceresultsinlargechangesinconsumption.

Goodswithanelasticityvaluethatislessthantheabsolutevalueof1.0aresaidtobeinelastic.Anexampleofaninelasticvalueis0.8,wherea10percentchangeinpriceresultsinan8percentchangeinconsumption.Agoodthatisinelasticorhaslowelasticitymeansthatpriceshavelittleeffectonconsumptionofthegood,soitisnotpricesensitive.Perfectlyinelasticdemand(0)wouldmeanthatregardlessoftheprice,peoplewillconsumethesameamount.

Thedegreeofpricesensitivityreferstotheabsolutevalueofelasticityandwhetheritisgreaterthanorlessthantheabsolutevalueof1.0,regardlessofwhetherornotthevalueispositiveornegative.Thepositiveornegativesignindicatesthedirectionofthechangeindemandandwhetheritincreasesordecreases.Generally,valuesforelasticityarenegative,meaningthatasthepricegoesup,peopleconsumelessofthegood.Apositiveelasticity,inwhichthedemandforagoodgoesupasitspricegoesup,isfeasiblebutrareforobviousreasons.

Ofcourse,priceisnottheonlydeterminantofdemand.InthecaseofCaltrain,ridershiphascontinuedtogrowdespiteincreasingfares,butthiscouldnotbereasonablyinterpretedasapositiveelasticity,sincetheincreaseinridershipisprobablyduetoexternalfactors,suchasgrowthinpopulationandemployment.Itisunlikelythatridershipincreasedasaresultoffaresgoingup.Arealisticelasticityforapublictransportationsystem,basedonthestudiescompiledforTCRP94,mightbe‐0.2,inwhichcasea10percentincreaseinfareswouldcorrespondtoa2percentdecreaseinridership.

Forsimplicityinthisdocument,allelasticitiesareassumedtobelinearfortherangeoffarepricesinquestion.Inotherwords,thesameelasticityisappliedwhetherraisingorloweringthefare,andwhetherthefareischangedasmalloralargeamount.

Commuter Rail Elasticity Practicallyallestimatesoffareelasticitiesontransitareinelastic,between0and‐1.0.Mosttransitsystemsareintheelasticityrangeof0to‐0.3,meaningthatmostridersarenotverypricesensitiveandsignificantfareincreasescouldbemadethatwouldgenerateadditionalrevenuefortransitagencies.Inotherwords,itisbroadlyunderstoodthatanincreaseinfareswillleadtoan


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increaseinrevenue,notwithstandingconsiderationsabouteconomicdevelopmentandsocialequity.

Withrespecttocommuterrailinparticular,theTCRPTravelerResponsetoTransportationSystemChangesHandbookmentionsfourcommuterrailelasticitystudiesbetween1977and1997inAustralia,Boston,andNewYork.Elasticitycalculationsrangefrom‐0.09to‐0.22.Originalresearchforthisprojectinvolvedinterviewswithrepresentativesfromsixcommuterrailproviders,andseveraloftheseorganizationsprovidedasensefortheirexpectationsofdemandelasticitywhenchangingfares;allofthemcitedoverallelasticitieswithinthatsamerange.

Whileresearchfocusingoncommuterrailhasbeenrare,thereareseveralgeneralcharacteristicsoftransitdemandelasticitythatinformthecommuterrailfarecontext.First,demandforrailisalmostuniversallylesselasticthandemandforbus.Railridershipisestimatedtobetwiceasresistanttochangesinfare.

Additionally,demandfortransitislesselasticinlargecities.Thismaybeafunctionofheavyautomobiletrafficinlargercities;thealternativestotransitarepoor.Thissuggestsalowcrosselasticity,meaningit’shardertosubstituteautoforrail.

Finally,demandforoff‐peakserviceisabouttwiceaselasticasdemandforpeakperiodservice.Commuterrailroadsgenerallyhaveahighershareofpeakperiodusersthanothertransitsystems,makingridershiplesssensitivetofarechanges.Anotherresultofpeakridersbeinglessfaresensitiveisthatraisingfareswithoutprovidinganyrelativediscountforoff‐peaktravelwillgenerallywidentheswingsindemandbetweenpeakandoff‐peaktravel.Inotherwords,itwillfocusdemandinthepeak,potentiallyexacerbatingcapacityissues.

Withrespecttodemographics,low‐incomeriders(whomaynothavethealternativeofthecar)tendtobelesssensitivetochangesinfarethanthegeneralridingpopulation.Inotherwords,“choiceriders,”whohaveavehicleoranotherviabletransportationalternative,areactuallymorelikelytoabandonatransitsystemthanthosewhomayhavelowerincomesbutaredependentontransit.Ofcourse,low‐incomeriderscanalsobepricedoutofcommuterrail,whichtendstobemoreexpensivethanothertransitservices.

Thereisscantevidencefordifferencesindemandelasticitybyage,thoughtherequirementthatalltransitsystemschargehalffareforseniorcitizensdoesnotseemtohaveledtoanygreatincreaseinseniorcitizenridership.Discountsforyoutharealsoverycommon,buttherearenoavailableestimatesfortheeffectofthosediscountsonridership.

Comparison with Peer Systems

ToputCaltrainfaresintocontext,thefarestructuresofpeersystemswereanalyzed.Caltrainis,byridership,the7thlargestcommuterrailroadintheUnitedStates.Thetop15systemsareincludedinthisanalysis,alongwithothertransitsystemslocatedintheBayArea,asofMay2017.Someresultsofthatanalysisarebelow,andadditionalinformationhasbeenprovidedinAppendixA.


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Fares Table1showsestimatedannualridership,farestructure(station‐to‐stationorzones;zonesaregroupsofadjacentstationswithequalfares),andwhetherpeakperiodpricingisemployedforeachoftherailsystemsidentifiedasCaltrain’speers.

Twelveoftheserailroadsoperatewithazonalfaresystemandtheremainingsevenspecifyfaresbystation‐to‐stationpair.Generally,zonalfaresareregardedaseasiertounderstandforpassengers,whilestation‐to‐stationfaresaremoreflexibleandcanbemorefair.Withzones,tripsofunequallengtharepricedthesameway.Theresultisthatarelativelyshorttripcouldendupbeingexpensiveifithappenstocrossazoneboundary.

Table 1: Peer System Characteristics

System Location Type Annual Ridership (2016)

Peak fares?

Fare structure

BART Bay Area Urban 129,000,000 No station‐to‐station

MTA LIRR NYC/Long Island Commuter 103,196,800 Yes zones

NJ Transit Rail NYC/New Jersey Commuter 88,050,000 No zones

MTA MNR NYC/New York/Connecticut

Commuter 86,302,500 Yes zones

Metra Chicago Commuter 72,891,500 No zones

SEPTA Regional Rail Philadelphia Commuter 35,453,700 Yes zones

MBTA Boston Commuter 33,749,600 No zones

Caltrain Bay area Commuter 19,038,300 No zones

Metrolink Los Angeles Commuter 10,903,000 No station‐to‐station

MARC DC/Maryland Commuter 8,980,600 No station‐to‐station

UTA FrontRunner Salt Lake City Commuter 4,545,800 No station‐to‐station

VRE DC/Virginia Commuter 4,496,000 No zones

RTD Denver Commuter 4,317,400 No zones

Tri‐Rail Miami Commuter 4,175,000 No zones

Sounder Seattle Commuter 4,163,400 No station‐to‐station

South Shore Line Chicago/Indiana Commuter 3,503,700 No zones

Capitol Corridor (Amtrak)

Bay area Intercity 1,573,200 No station‐to‐station

Coaster San Diego Commuter 1,503,700 No station‐to‐station

ACE Bay area Commuter 1,295,500 No zones

Source:APTA,PublicTransportationRidershipReportQ42016(http://www.apta.com/resources/statistics/Documents/Ridership/2016‐q4‐ridership‐APTA.pdf);agencywebsites,May2017.

One‐Way Fares

Error!Referencesourcenotfound.showsthebase(lowest)andmaximumfareforeachofthepeersystems,orderedbythebasefare,fromhighesttolowest,asofMay2017.Alsoincludedarethelengthofthelongestlineoneachsystemandapricepermile,equaltothemaximumfaredividedbythelengthofthelongestline.Thisisasomewhatcrudeapproximationofpriceper


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mileoftravel,whichwouldideallybecalculatedasanaverage;doingthis,however,wouldrequirealargeamountofdataonactualsystemusageandwasnotpracticalwithinthescopeofthisproject.

Ofthe19systems,Caltrainhasthe11thhighestbasefare,8thhighestmaximumfare,and12thhighestpricepertrackmile.Inshort,Caltrain’sfaresareaboutaverage,despitebeinginanexpensivemarket.

Table 2: One‐Way Fares

System Base fare Max fare Longest Line Track Miles

Fare per mile

MTA Long Island Rail Road $8.75 $29.25 120.0 $0.24

MTA Metro‐North Railroad $8.00 $26.25 88.0 $0.30

Amtrak ‐ Capitol Corridor $6.00 $43.00 168.0 $0.26

MARC Train $5.00 $13.00 63.3 $0.21

ACE $4.25 $14.50 86.0 $0.17

Coaster $4.00 $5.50 41.1 $0.13

SEPTA Regional Rail $3.75 $9.00 38.7 $0.23

Metra $3.75 $10.75 70.5 $0.15

VRE $3.30 $11.55 55.0 $0.21

Sounder $3.25 $5.75 48.0 $0.12

Caltrain $3.20 $13.20 76.6 $0.17

South Shore Line $3.00 $13.25 90.0 $0.15

Denver RTD $2.60 $4.50 23.0 $0.20

UTA FrontRunner $2.50 $9.70 88.0 $0.11

Tri‐Rail $2.50 $6.90 70.9 $0.10

NJ Transit Rail $2.25 $16.75 48.1 $0.35

MBTA $2.25 $12.50 62.9 $0.20

BART $1.85 $7.20 52.3 $0.14

Metrolink $1.75 $16.75 100.1 $0.17

Source:Agencywebsites,May2017.Faresincludeanydiscountsforusingreusablefaremedia,suchasthefareforusingClipperCardforCaltrain.

Monthly

Somebutnotallpeeragenciesoffermonthlypasses.Dataonmonthlypasspricesforeachofthepeersystemsallowedustocomputemultipliersthatquantifythediscountthatamonthlypassprovides.Bydividingtheminimummonthlypasscostbytheminimumbasefare,abasemultipliercanbederived.Likewise,bydividingthemaximummonthlypasscostbythemaximumsinglefare,asecondmultipliercanbederivedforthosepayingthemaximumfares.Table3showsthemonthlyfaresandmultipliers,orderedbythemonthlymultiplierformaximum‐faretrips.

Asageneraltrend,systemstendtogivealargerdiscounttothosemakingthelongesttrips,thoughseveralsystemsdothereverse.Caltrainprovidesthesamediscountregardlessofthe


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individualtriplength,astraightmultiplierof26.5.Caltrainranks8thoutof18systemsforthemaximum‐faremonthlymultiplier,and14thoutof18systemsforthebasefaremultiplier.Comparedtoothersystems,Caltrain’slonger‐distance(andhigher‐spending)commutersareenjoyinglessofamonthlypassdiscount.Generally,however,Caltrain’smonthlypassproductsareinlinewithwhatpeersystemsaredoing.

Table 3: Monthly Fares

System Base

Monthly Max

Monthly Base Monthly Multiplier

Max Monthly Multiplier

Denver RTD $99.00 $171.00 38.1 38.0

Sounder $117.00 $207.00 36.0 36.0

Coaster $120.00 $165.00 30.0 30.0

MBTA $84.50 $363.00 37.6 29.0

NJ Transit Rail $60.00 $480.00 26.7 28.7

South Shore Line $110.75 $373.75 36.9 28.2

VRE $88.70 $318.10 26.9 27.5

Caltrain $84.80 $349.80 26.5 26.5

Metrolink $56.00 $441.00 32.0 26.3

Metra $107.00 $278.00 28.5 25.9

ACE $88.00 $364.00 20.7 25.1

MARC Train $135.00 $324.00 27.0 24.9

SEPTA Regional Rail $101.00 $191.00 26.9 21.2

MTA Metro‐North Railroad $180.00 $536.00 22.5 20.4

UTA FrontRunner $198.00 $198.00 79.2 20.4

MTA Long Island Rail Road $190.00 $500.00 21.7 17.1

Amtrak ‐ Capitol Corridor $98.00 $656.00 16.3 15.3

Tri‐Rail $100.00 $100.00 40.0 14.5

Source:Agencywebsites,May2017.

Multi‐Trip Passes

Inadditiontomonthlypasses,manysystemsoffermulti‐tripticketsinbookletsof8‐12.Table4showsthepricesformulti‐tripticketsoneachofthesystemsthatoffersthem.Italsoincludesthenumberoftripsincluded,andthecalculateddiscountcomparedtopurchasingsinglefares(atboththebaseandmaximumfares).Caltrainoffersaslightlybelowaveragediscountonmulti‐tripticketsof7percent,ranking6thoutof8systems.

Table 4: Multi‐Trip Passes

System Base Max # of Trips

Discount at Base Price Discount at Max Price

Tri‐Rail $21.25 $57.50 12 29% 31%

SEPTA Regional Rail $38.00 $80.00 10 20% 11%

VRE $29.40 $105.60 10 11% 9%

Metra $33.75 $96.75 10 10% 10%


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System Base Max # of Trips

Discount at Base Price Discount at Max Price

Denver RTD $23.50 $40.50 10 10% 10%

Caltrain $23.70 $97.70 8 7% 7%

South Shore Line $33.25 $126.00 10 5% 5%

NJ Transit Rail $30.00 $171.50 10 0% 5%


Farebox Recovery

Anagency’sfareboxrecoveryratioisthepercentageofitstotaloperatingbudgetthatisrecoupedthroughfares.AlltransitagenciesmustreportdetailsaboutrevenueandoperatingexpensestotheFederalTransitAdministration(FTA)toberecordedintheNationalTransitDatabase(NTD).TheNTDispublic,soitispossibletocalculateafareboxrecoveryratiofornearlyeverytransitproviderintheU.S.

SomeofCaltrain’speercommuterrailsystemsareoperatedbylargetransitagenciesthatalsooperatelightrailand/orbussystems.ComparingCaltrain’sfareboxrecoveryratiotothoseagenciesdoesnotmakesense,astheyarenotprovidingacomparablesuiteofservices(andallocationofrevenuetocommuterrailcanbedifficultonsystemswithcombinedfares).However,severalofthelargecommuterrailsystems,Caltrainincluded,areoperatedindependently.Figure1shows2015(themostrecentyearforwhichdataareavailable)fareboxrecoveryratiosforonlythosetransitprovidersthatexclusivelyoperatecommuterrailsystems.Amongthese,Caltrainhasthehighestfareboxrecoveryratioat70percent.Forreference,BARTisincluded,andhasanevenhigherratioof78percent.

Figure 1: Farebox Recovery

Source:NationalTransitDatabase,2017.


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Peak and Off‐Peak Pricing

DuringCaltrain’speakcommutinghours,sometrainsareverycrowded,andpeakperiodpricingisonepossiblewaytoalleviatesomeofthatcrowding.ThissectionpresentsinformationonseveralU.S.andinternationalcommuterrailsystemsthatpriceticketsdifferentlydependingonthetimeoftravel,aspartofanefforttoquantifythelevelofdiscount/surcharge.Again,furtherinformationisavailableinAppendixA.

OnlyfourtransitsystemsintheU.S.usepeakpricing.Additionally,threesystemsfromoutsidetheU.S.werestudied,fromChile,Australia,andtheUK.Discountsforoff‐peaktripsrelativetopeaktripsareshowninTable5.Thediscountisshownatboththeminimumandmaximumfareforeachsystem,andacleartrendisthatlonger,moreexpensivetripstendtoreceiveahigheroff‐peakdiscount.

Off‐peakdiscountsrangefrom11percentforshorttripsontheWMATAsystemto45percentforlongtripsonAustralia’sAdelaideMetro.Mostoff‐peakdiscountsarebetween20and35percent.

Inonecase(MetrotrenofSantiago,Chile),therearethreefarelevelsforlow,medium,andhighridershipperiods.Thisanalysisreflectstheperiodswiththehighestandlowestfares.

Table 5: Peak and Off‐Peak Pricing

System Location Off‐peak discount at

Minimum fare

Off‐peak discount at maximum fare

Adelaide Metro Adelaide, Australia 23% 45%

London Overground London, UK 0% 33%

Long Island Rail Road NYC 24% 27%

Metro‐North Railroad NYC 25% 26%

Metrotren Santiago, Chile 17% 32%

SEPTA Philadelphia 21% 23%

WMATA Washington DC 11% 36%


Employer Programs Manytransitagenciesoffer“deepdiscount”programstolargegroupsoflikelyusers,suchasemployeesofacertaincompanyorfaculty,staff,andstudentsofacollegeoruniversity.Ininterviews,mosttransitagenciescitedattractingridersasthereasonforimplementingtheseprograms,andtheyareoftencreatedinresponsetoflaggingridership.

UtahTransitAuthority(UTA)andMetrolinkbothoperatecommuterrailsystemsandofferabulkpurchasepassforemployers(botharecalledEco‐pass).JustaswithCaltrain’sGoPassprogram,companiesmustpurchasethepassforallemployees.However,pricingfortheseprogramsisvariable(whichisconsistentwithhowsuchprogramsaredescribedgenerallyinTCRPReport94),andthepricingmodelisnotpublic.Interestedcompaniesmustrequestaquotefromtheagency.Pricingisbasedonthenatureoftheorganizationandtheamountthepassholdersareexpectedtousetheservice.ThiscouldbeasensibleapproachforCaltrain’sGoPass,sincethetruevalueofGoPassvarieswidelydependingonthecompanyororganization.


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Outsideoftherealmofcommuterrail,manyagenciesoffersimilarannualpassprograms.Pricingcanbebasedonzones,orinsomecases,directlyonthesystemusefortheparticularcompanybuyingthepasses,asdeterminedbyasurvey.Whiletheadministrativeburdenwouldbehigh,thiscouldbeaviableoptionforGoPass,asCaltrainalreadyadministerssuchasurvey.

Deepdiscountprogramsaregenerallyseenasdetrimentaltoagencyrevenue.Pre‐taxtransitbenefitvouchers(likeTransitChek®),whichinmanycasescanbeautomatedtofillanemployee’sfarecardeverymonth,arepreferredbysometransitagencies(andemployers).BypurchasingClipperCardfarewithsuchvouchers,Caltraincustomerscanalreadyusethistypeofbenefit.

Means‐Tested Discounts and Subsidies Sometransitagenciesprovidemeans‐testedsubsidiestolow‐incomeriders.TriMet,inthePortland,Oregonarea,offerssubsidizedfarestononprofitorganizations,whointurnprovidefaretotheirlow‐incomeclients.Theirwebsitestates:

“Wesetasideatotalof$1.5millionfortheseprogramstomitigateimpactsoffareincreasesonlow‐incomeriders.Throughtheseprograms,weprovidefarestonon‐profitsandcommunity‐basedorganizationsatalowercostoratnocost,whichtheythendistributetotheirlow‐incomeclients.”1

Metro,inLosAngeles,offersa$10subsidyonmonthlypasses,whichisawardedbasedontheincomeoftherider.Low‐incomeridersreceivecouponsthatcanbeusedtopurchasefaremediadirectlyfromlocaltransitproviders(e.g.,LongBeachTransit,CulverCityBusLines).Thecouponsaredistributedthroughtwononprofitorganizations,eachofwhichprovidesthecouponsforacertaingeographicarea.2Figure2showsMetrolink’sincomerequirementsfortheprogram.

SanFranciscoMunicipalTransportationAgency(SFMTA)andKingCountyMetroTransitinWashingtonStateuseaslightlydifferentapproach.Bothagenciesadministermeans‐testedfarediscountsthemselves.However,bothagenciesalsorelyonotherorganizationstodotheactualmeanstesting.InthecaseofSFMTA,itistheHumanServicesAgencyofSanFrancisco,amunicipalagency.ForKingCounty,severalexternalorganizationstothetransitagency,includingamixofnonprofitandgovernmentorganizations,providetheverificationservices.

Amajorbenefitofalloftheseapproachesisthatitallowstheexternalorganizationstodothemeans‐testing,therebyoffloadingamajoradministrativeburdenforthetransitagency.Infact,notransitagencyappearstoofferadirect,means‐testedfarediscountforlow‐incomeusers.Adiscountbasedoneligibilityforothermeans‐testedprograms(suchastheSupplementalNutritionAssistanceProgramorSNAP)maybefeasible,whichmightmaketheprogrameasiertoadminister.

1https://trimet.org/accesstransit/2https://www.metro.net/projects/rider_relief/rider‐relief‐overview/


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Figure 2: Income Requirements for Metro's Rider Relief Program

Agency Profiles

Interviewswereconductedwithsixcommuterrailprovidersaboutwhenandhowtheychangetheirfarestructure.Itwasclearthatsomecommuterrailprovidershaveaverymatureprotocolonfaresetting,whileothersaremoreadhoc.Thatsaid,allproviderswereverythoughtfulabouttheirfaresettingprocesses.Someagenciesareconsideringchanginghowtheysetfareswithinthenextfewyears,whileothersseemtohavefoundaformulathatworksandarestickingwithitfortheforeseeablefuture.

Thereisaclearconsensusforsomefare‐settingpractices.Withrespecttoequity,mostagenciesfindthatfederalTitleVIrequirementsarestringentenoughtobeadequateasapolicythatensuresfareequity,anddonotmakeanyadditionalconsiderations.Additionally,alargemajorityofthestaffinterviewedtorecommendedchangesinfarethatwerefrequent(every1‐2years)andsmall.Mostcitednegativepublicreactionstolargerfareincreases,whichcustomerstendtoregardassuddenandunfair.Theyalsocitedthefactthatslowandsteadyincreasestendtostabilizeanagency’sfinancesgenerally,makingthemmoreconsistentandcredibleandlesspronetowildfareswings.

Peakperiodfaresareonlyemployedbythelargestagencies,asmostsystemsdon’treportenoughcrowdingtonecessitateit.Thepeopleinterviewedgenerallyviewedpeakperiodpricingasmakingthingsmorecomplicatedforriders.Discountprograms,meanwhile,tendtobeviewedasgoodforridershipbutbadforrevenue.

Severalagenciesreportedanapproximatefareelasticity,whichrangedfrom‐0.13to‐0.22.ThisisconsistentwithresearchoncommuterrailsystemscompiledintheTCRPTravelerResponsetoTransportationSystemChangesHandbook,forwhichelasticitieswerereportedtorangefrom‐0.09to‐0.22.Severalintervieweesmentionedthatelasticitiestendtobelowestforpeakperiodridershipandhighestforoff‐peak.

Asageneralrule,theseagenciesviewtheirfareboxrevenueascoveringashareoftheiroperatingbudget,withcapitalfundscomingfromothersources.

Summariesofeachofthesixinterviewswithtransitagencystaffarepresentedbelow.


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Metra MetraisacommuterraillineintheChicagometropolitanarea.Metra’srepresentativewasclearthattheyfindTitleVIrequirementseasytocomplywith,andthatequityconsiderationswerenotamajorpartofMetra’sfarepolicyprocess.Thatsaid,hewasconcernedthatsimplyraisingfaresequallyforallcustomersovertime,whichislegitimateunderTitleVIrequirements,createsaridershippoolthatultimatelycatersto“suits”whilepricingotherdemographicsoffthesystem.Hequestionedwhetherthatservestheagency’smission.(OthersatNJTRANSIThadsimilarconcerns.)Asanequityconsideration,Metraprovidesoptionsforpayingwithcashforunbankedcustomers.

Metrahasafareboxrecoverygoalof52percent.Revenuesinexcessofthatcanbeusedforcapitaloroperationalimprovements.

Metraisconsideringpeakperiodpricing.SlightlyoverhalfofMetraridershipispeakhour,peakdirection.Afewpilotprogramsweredoneinthe1980’s,butnopermanentpolicychangesweremade.ArelatedideathatMetraisconsideringisaCBDsurcharge.Thisisintendedtoencourageriderswhoaretravelingontripswherethereisavailablecapacity(non‐CBDtrips),whilechargingmoretocustomerswhoareonthemostcongestedpartofthesystem(tripstotheCBD).

ElasticityofdemandforMetraridershipisestimatedat‐0.22.Forsomelines,especiallythosewithlimitedornegativepopulationgrowth,elasticitymaybehigher.

Metraisgenerallyconsideringchangestotheirfarestructure,andiscurrentlyconductingafarestudywithaconsultant.Amongotherthings,Metraisconsideringuniversitypasses,butfearamajorlossofrevenue(themarketingdepartmentismoreinterestedinpursuingthisoptionthantheplanningdepartment).

Metro‐North Railroad ServingtheNewYorkmetropolitanarea,Metro‐NorthRailroad(MNR)fareprices(includingdiscount,weekly,monthly,andten‐triptickets)arederivedfromtheone‐waypeakfarethroughmultipliers.Inotherwords,allfareschangebythesamepercentageatthesametime.

Likemostproviders,MNRpreferstomakefrequent,smallincreasestothefaretocoverrisingcosts.Thispracticewaslearnedovertimewhentheyusedtohavemoreadhocincreasesthatcreatedsomechaosamongcustomersandpoliticiansalike.MNRrepresentativesemphasizedthatfrequentchanges(currentlyeverytwoyears)depoliticizetheprocess,asitisexpectedandnormalandthereforenotinthepoliticalrealm.Farechangesarescheduledinaccordancewithanoverallfive‐yearfinancialplan,sotheyaregenerallyscheduledfiveyearsaheadoftime.

MNRusespeakperiodpricing,whichtheysayischieflyameasuretoreducecrowding.However,peakfaresarealsothoughtofasawaytoincentivizethepurchaseoftime‐based(monthlyandweekly)tickets.TheMNRrepresentativesinterviewedbelievethattime‐basedticketsleadtolessfareevasionandlesseffortonthepartofconductors.

Eachfareincreaserequiresanopportunityforpublicinput,thoughthisrarelyleadstoanychanges.


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Utah Transit Authority (UTA) FrontRunner Asarelativelynewsystem,theUtahTransitAuthority(UTA)ismorefocusedonridershipthanrevenue,thoughtheyexpectbudgetconsiderationstobecomemoreimportantmovingforward.Theyarealsoeagertokeepthesystemasapproachableaspossible.Theyplantostickwithzone‐basedfares,becausetheyfindthattheterrainoftheSaltLakeCityareamakeszone‐basedfaresintuitive.Theyhavenotseriouslyconsideredpeak/off‐peakfares,becausetheyregardthemasconfusingtoridersandtheydonotcurrentlyhavecapacityissues.

Overall,UTAhasafareboxrecoverygoalof20percent,butthisisjustoneofseveralgoalsandisnotalwaysmet.Theyoffermanypassprograms,includinganeducationalpassforfourmajoruniversities,andayearlypassforbusinessescalledEcoPass.MuchlikeGoPass,EcoPassmustbeprovidedtoeveryemployee.Itisonlyofferedtobusinesswithover35employeesormore,andthepricevariesdependingonthenumberofemployeesandtheleveloftransitserviceoffered.UTAviewsbothprogramsasgoodsourcesofridershipbutbadforrevenue.TheUTArepresentativessuspectthatbecausetheseprogramsservethewholeoftheagency,andnotjustFrontRunnner,itwouldbepoliticallydifficulttodiscontinuethem.

Withrespecttofareelasticities,UTAassumesanelasticityofabout‐0.13forcommuterrailandlightrailriders,whichisbasedonaregressionmodelusingempiricaldata.

Metrolink MetrolinkisacommuterrailsystemthatservesSouthernCalifornia.Ingeneral,Metrolinkraisesfaresonanas‐neededbasis,whenrevenueprojectionsfallshortofbudgetarygoals.Theydon’tplanveryfarahead–usually,theboardinitiateschangestofarepolicyandchangesareenactedshortlythereafter.(ThisissimilartoCoaster.)

Inrecentyears,Metrolink’sgoalhasbeentooptimizeridership,prioritizingridersoverrevenue.Recently,Metrolinkrestructuredtheirfarestobebasedonstation‐to‐stationdistance,makingshorttripsrelativelyaffordable.Theyalsofoundthatthisfarestructuredecreasedfareevasioncomparedtootherfarepilotprojects.Forexample,theytriedaflatfareof$3perstationpassedonyourtrip.However,somestationshavelongdistancesbetweenthem,andsomedon’t,sopeoplegamedthesystemandevadedbystayingonlongerthantheirticketallowed.Thesystemisproof‐of‐payment,sofareevasionisgreaterconcerncomparedtocommuterrailinspectionschemes(i.e.conductorinspections,whichvalidatenearlyalltickets).

Metrolinkisnotactivelyconsideringpeakperiodpricing;peakperiodtrainsarenotovercrowded,andenforcementcouldbedifficultorcostly.

Basedonastudyofticketsalesdata,Metrolinkassumesanaverageoveralldemandelasticityof‐0.21(thoughthisestimatevariesbymarketsegment).Theagencyhasanon‐callconsultantwhodoesregularresearchrelatingtofares.

Withrespecttopublicoutreach,Metrolinkoftenconductspilotpricingchangesanddonotengagethepublicbeforehand.Forpermanentchanges,thereissomepublicoutreach.


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NJ Transit Rail NJTransitisacommuterrailsystemthatservesNewJersey.TheconversationwitharepresentativefromNJTransitcenteredonpeakandoff/peakfares.NJTransitisuniqueinthattheyusedtochargeapeakfare,butnolongerdo.Therepresentativetoldastoryinwhichthen‐executivedirectorGeorgeD.WarringtonreceivedaphonecallfromanofficialattheU.S.TreasuryDepartment,whowasonaverycrowded(anddiscounted)off‐peak(weekend)train,askingwhytheagencyofferedanoff‐peakfare(andthuswerelosingrevenue).Theagencydidawaywiththeoff‐peakdiscountshortlythereafter.Longstoryshort:peakandoff‐peakfarescanberevenuepositive,neutral,ornegative…

TherepresentativealsocitedTitleVIasacomplicationininstitutingdifferentialpeak/off‐peakpricing.Itwasdifficulttodemonstratethatpeak‐periodpricingdidnotdifferentiallyaffectlow‐incomepopulations.

Finally,itwasmentionedthatusingpeak/offpeakfarescausesconfusionamongcustomers.Onaconductor‐basedinspection,itcanmeansignificantnumbersofpeopleboughtthewrongticketandthereforeneedtopaymore.Therepresentativereportedthatittakesconductorsatleast10timeslongerthanthetimetocheckaticketwiththepeak/offpeakfares.Thisthenincreasesfareevasionasconductorsgetboggeddownincashtransactionsandcannotinspect(andpunch)othercustomers’tickets,whichmeanstheticketscanbereusedandanypeakrevenuegainscouldbeoffset.

Coaster Commuter Rail (NCTD) CoasterCommuterRailservestheSanDiegometropolitanarea.TheultimateresponsibilityforsettingCoaster’sfaresfallstotheSanDiegoAssociationofGovernments(SANDAG),theregionalMPO.However,considerablediscretionisgiventoindividualtransitagencies.FarestudiesarefrequentandconductedbySANDAGwithmodelinghelpfromoutsideconsultants.

CoasteralsoreceivesoperationalfundingfromCalifornia’sTransportationDevelopmentAct(TDA).Thefundstheyreceiveare,inpart,afunctionoffareboxrecoveryratio,andCoaster’sbudgetingisbuiltaroundthisratio.Thatsaid,farestendtobesetadhocbasedonbudgetneeds,oncetheyareallocatedrevenuefromTDAandothersources.Whentheyhavetocutserviceorraisefarestomeetthatbudget,thenafareincreaseisconsidered.

Thelastfareincreasewas2008‐2009inresponsetoanexpectedrevenueshortfall.Fareswereincreasedinstagesovertwoyears,andit’spossiblethattechniquecouldbeusedagain.Theyraisedfaresatthattimebasedonafarestudy’srecommendations;thefarestudywasconductedtohelpadvisethefareincrease.SANDAGiscurrentlyconductinganewfarestudyforCoasterinanticipationofaJuly2018fareincrease.

Coasterhada4zonestructure,butaftersomerecentridershipdeclinesitwaschangedtoa3zonestructureandfareswerelowered,particularlyforshorttrips.Thesystemcontinuestostruggletoattractenoughriders,andtheSANDAGrepresentativebelieveslowgaspricesareoneimportantreasonforthelowerridership.

CoasterandSANDAGaregenerallynotinterestedinpeakperiodpricing,sincecapacityisnotanissueandstakeholdersviewtheschemeascomplicated.Forpublicoutreach,theyfollowwhat


15

wasdescribedasthetypicalTitleVIscenario.Specifically,theywillgoouttothepublicwithalternatives,thenthepreferredalternativewillbeselectedatapublicboardmeeting.

Lessons for Caltrain

Caltrain’sapproachseemsinlinewiththoseofmostoftheirpeeragencies.Increasingfareseverytwoyearsseemstobeanindustry‐widebestpractice,andmanyagenciesalsoconductfarestudiesbeforechangingfares.Largefarehikesaremuchmorelikelytoencounterpublicresistancethanfrequent,smallincreases.Additionally,regularchangestofaresthatareexpectedbythepublicmakefarepolicylesspoliticallyfraught,becauseifchangesareexpected,politicalcandidatesareunlikelytocampaignonoppositiontothem.Allofthisisevidencethatregularfareincreasesmaymakesenseasapolicy.

Caltrainhasconsiderablylowertotalridershipthanmostoftheagencieswhoemploypeakperiodpricing(orhaveinthepast),andmostagenciesofsimilarsizearenotparticularlyinterested.IfCaltrainweretoinstitutepeakperiodpricing,itwouldbethesmallestsystemtodoso.Additionally,NewJerseyTransit’sexperiencewithconductorsspendinglargeamountsoftimecollectingmoneyforincorrecttickets(i.e.off‐peakticketsduringpeakperiods)suggestsaformidablechallengeforCaltrain,whichalsooperatesonaproof‐of‐paymentsystem.Caltrainfareinspectorswouldhaveaconsiderableburdenwithpeak/offpeakfares,andriderswhodonotseeafareinspectoronagiventriparewouldbemorelikelyto,wittinglyornot,evadethepeakfare.

Withrespecttomeans‐testingformeans‐basedfares,transitagenciesseemtobeill‐equippedtoimplementtheseprogramsontheirown.Instead,agencieswhohavesuccessfullyimplementedmeans‐baseddiscountshavedonesobypartneringwithnonprofitorganizationsorgovernmentagenciestodotheactualtesting.


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Appendix A

TableA1:PeerAgencyFareComparison

TableA2:PeakPricingAnalysis

Table A1: Peer Agency Fare Comparison (May 2017)

Max fare per track mile

One‐way cash fare Monthly pass

Monthly Pass Multiplier Multi‐trip pass

Multi‐trip discount

System Track miles Zones Cash

Monthly Pass Base Max Base Max Base Max Base Max

# of trips Base Max

ACE 86.0 6 $0.17 $0.10 $4.25

$14.50 $88.00 $364.00 20.7 25.1 ‐ ‐ ‐ ‐ ‐

Amtrak ‐ Capitol Corridor 168.0 n/a $0.26 $0.09 $6.00

$43.00 $98.00 $656.00 16.3 15.3 ‐ ‐ ‐ ‐ ‐

BART Average 40 n/a $0.16 ‐ $1.85 $6.19 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Caltrain1 76.6 6 $0.17 $0.11 $3.20

$13.20 $84.80 $349.80 26.5 26.5 $23.70 $97.70 8 7% 7%

Coaster 41.1 3 $0.13 $0.10 $4.00 $5.50 $120.00 $165.00 30.0 30.0 ‐ ‐ ‐ ‐ ‐

Denver RTD2 23.0 3 ‐ ‐ $2.60 $4.50 $99.00 $171.00 38.1 38.0 $23.50 $40.50 10 10% 10%

MARC Train Average 63.3 n/a $0.17 $0.11 $5.00

$11.00 $135.00 $305.67 27.0 27.7 ‐ ‐ ‐ ‐ ‐

MBTA Average3 33.1 8 $0.38 $0.28 $2.25

$10.42 $84.50 $330.88 37.6 31.8 ‐ ‐ ‐ ‐ ‐

Metra Average 45.6 8 $0.19 $0.13 $3.75 $8.66 $107.00 $246.84 28.5 28.5 $33.75 $96.75 10 10% 10%

Metrolink Average 73.1 n/a $0.20 $0.14 $2.39

$14.36 $69.00 $415.96 29.1 29.2 ‐ ‐ ‐ ‐ ‐

MTA Long Island Rail Road4 120.0 8 $0.24 $0.10 $8.75

$29.25 $190.00 $500.00 21.7 17.1 ‐ ‐ ‐ ‐ ‐

MTA Metro‐North Railroad5 81.2 11.0 $0.30 $0.15 $8.92

$23.83 $199.67 $501.33 22.4 21.1 ‐ ‐ ‐ ‐ ‐

NJ Transit Rail6 48.1 11.1 $0.32 $0.22 $3.61

$14.83 $103.67 $417.67 28.3 28.1 $30.00

$171.50 10 0% 5%

SEPTA Regional Rail7 21.4 3.0 $0.37 $0.23 $ 3.75 $6.37 $101.00 $167.31 26.9 27.0 $38.00 $80.00 10 20% 11%

Sounder Average 41.5 n/a $0.13 $0.11 $3.25 $5.38 $117.00 $193.50 36.0 36.0 ‐ ‐ ‐ ‐ ‐

South Shore Line8 90.0 8 $0.15 $0.10 $3.50

$13.25 $110.75 $373.75 31.6 28.2 $33.25

$126.00 10 5% 5%


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Max fare per track mile

One‐way cash fare Monthly pass

Monthly Pass Multiplier Multi‐trip pass

Multi‐trip discount

System Track miles Zones Cash

Monthly Pass Base Max Base Max Base Max Base Max

# of trips Base Max

Tri‐Rail 70.9 6 $0.10 $0.03 $ 2.50 $ 6.90 $100.00 $100.00 40.0 14.5 $21.25 $57.50 12 29% 31%

UTA FrontRunner9 88.0 n/a $0.11 $0.05 $ 2.50 $ 9.70 $198.00 $198.00 79.2 20.4 ‐ ‐ ‐ ‐ ‐

VRE Average 45.0 8 $0.24 $ 0.16 $ 3.30

$10.53 $88.70 $289.45 26.9 27.5 $29.40

$105.60 10 11% 9%

Notes:

1. Min/max price based on clipper fare.

2. Information for individual lines not available. Max price for airport trips excluded (only one‐way airport travelers would ever need to pay this fare).

3. A 10‐ride pass is only available on mobile app and offers no discount.

4. Peak fares shown. Ten trip pass offers no discounts for peak and a consistent 15% for off peak.

5. Peak fares shown.

6. Atlantic City line omitted.

7. Advanced (off‐train) sales assumed. Center City to University City, Glenside Combined, and Fern Rock to Center City routes omitted.

8. There is also a 25‐trip ticket with a 10% discount.

9. Monthly pass is a single price and includes other modes.


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Table A2: Peak Pricing Analysis (May 2017)

System Location Type Annual Ridership (approx)

Min Peak

Min off‐peak

Max peak

Max off‐peak

Off‐peak discount Min

Off‐peak discount Max

Adelaide Metro Adelaide, Australia

Commuter Rail 13,000,000 $3.54 $1.94 $3.54 $1.94 45% 45%

London Overground1 London, UK

Commuter Rail 184,000,000 £6.60 £6.60 £28.60 £19.30 0% 33%

Long Island Rail Road NYC

Commuter Rail 103,000,000 $8.25 $6.25 $29.25 $21.25 24% 27%

Metro‐North Railroad2 NYC

Commuter Rail 86,000,000 $8.00 $6.00 $26.26 $19.50 25% 26%

Metrotren3 Santiago, Chile

Commuter Rail 5,000,000 $890 $740 $2,200 $1,500 17% 32%

SEPTA4 Philadelphia Commuter Rail 36,000,000 $4.75 $3.75 $6.50 $5.00 21% 23%

WMATA Washington DC Urban Rail 261,000,000 $2.25 $2.00 $6.00 $3.85 11% 36%

Notes:

1. Prices in Pounds sterling.

2. Prices are for Hudson Line but are representative of peak/off‐peak ratios on the system.

3. Prices in Chilean pesos. Metrotren has three fares for high, medium, and low periods. These fares represent high and low.

4. "Peak" fares are actually weekday fares, off‐peak are evenings/weekends.

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