Caltrain Fare Study
Draft Research and Peer Comparison Report
Public Review Draft
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%
Source:Agencywebsites,May2017.
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%
Source:Agencywebsites,May2017.
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
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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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