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It IS time to raise fares, BUT

Dear Friends at Capital Metro:

Hey, the last few rides, taking my 3-year-old to the UT lab school and back, have been swell. Good work. So I saw your fare increase went over like a lead balloon. Well, I just filled out your survey. Here's my additional comments:

  1. This fare increase is long overdue, especially for the door-to-door special transit stuff. Yes, I so went there. It costs like 60 cents to provide a ride which actually costs the taxpayers something like 20 or 30 bucks. But even the normal fares are too low (and, no, almost nobody rides the bus to save money on an individual trip - because the economics of that don't make sense, even when the bus ride is free).
  2. It's typical stupid PR by Capital Metro to be pushing this fare increase at precisely the time when it's most easy for the bus riders to complain about subsidizing suburban commuter rail passengers. Of course, I don't think there will be many of them, but it's still an incredibly dumb bit of timing.
  3. No, eliminating free transfers and Ozone Action Day free rides doesn't count as raising fares. Cut it out. Presumably, you had to take a round-trip, so even with that free transfer slip, you used to pay a buck, and you're paying a buck now; it's just costing CM a bit less in driver time.

M1EK's recommendations:

  1. The aforementioned STS hike (yes, disabled people should get more of a break than regular bus riders. If we expect a 25% farebox recovery on able-bodied people, then let's shoot for 10% for the disabled. Something has got to be done here, though - serving the disabled is not Capital Metro's only mission).
  2. STOP THE FREE RIDER PROBLEM. Even today, with nothing but express buses to serve them, many residents of Pflugerville and Cedar Park, who don't pay any Capital Metro taxes, get to ride the bus for the same price as the Austin and Leander residents who DO pay those taxes. My solution? Walk-up fares go up dramatically (to about 80% of estimated full cost - remainder covered by Federal subsidy). Residents of the service area can buy discounted single or multiple rides by showing proof of residency in the service area. You guys actually encouraged this by moving the old Pflugerville express bus stop to just inside the CM service area right next to where it used to be - CUT THIS SHIT OUT. We don't owe Pflugerville anything but contempt for refusing to fund transportation solutions. Likewise with this stupid Round Rock idea.
  3. Since you guys think this shitty commuter rail service is going to be a magical gold unicorn which poops out fairy rainbows, PROVE IT by charging double the express bus fare. This will take the wind out of the sails of the bus riders complaining that poor eastsiders will be subsidizing rich suburbanites.

Here's what those fares might look like (this is just a wide estimate, though). Let's assume that we have developed a smart-card for residents of the service area which can be used even for the walk-up case - this is simple and is done in many other jurisdictions to identify people who qualify for reduced fares (such as senior citizens).

Ride typeCurrent fareTarget FRR for residentsResident fareNon-resident fare
Standard one-way bus fare$0.5025%$1.00$3.00
STS ride$0.6010%$2.00$15.00
Express bus one-way fare$1.0025%$2.00$6.00
Commuter rail one-way fareN/A40%$4.00$8.00

(similar relative discounts as today for students, seniors, and day/monthly passes. Assumption is that average cost of a one-way city bus ride, all costs included, is $4.00; $8.00 for express; $10.00 for commuter rail with shuttle bus; $20.00 for STS).

The conclusion is that if we're going to raise our farebox recovery ratio but simultaneously not drive away choice commuters (who are the voters we need to keep on board), we need to do something to capture the free-rider revenue, or lower the free-rider cost. Systems like New York's can handle this by heavily discounting monthly passes and having relatively steep one-way fares; we're not to that point yet here.

I'll expect my consultants' fee any day now.

Your pal,
M1EK

This entry was posted in the following categories: Austin , Economics , Funding of Transportation , PS: I am not a crackpot , Subsidies to Suburban Sprawl , Transit in Austin , Transportation

Comments

I can get with most of this... although the implementation of some of your suggestions would be onerous. BTW, I believe it actually costs CMTA somewhat more than $20 - 30 for an STS ride - jmvc

I can believe it - I wanted to make sure I erred on the low side of that particular cost for obvious reasons.

Oh, and the onerous implementation - I hope you meant politically, because it's not difficult technologically (practically) - for instance, Honolulu has a senior discount card that they show before paying. No different from a "resident discount card" really.

Here's the Honolulu info:

http://www.thebus.org/Fare/seniorfare.asp

For one-way trips, they show their card and then pay. For passes, they basically put a sticker on the card. (We'd obviously want to do something smarter there - like a reloadable card).

Do you know - does CM plan to charge the same fare for commuter rail that it charges for bus?

Ben Wear, who has to be one of the most worthless transportation writers in the country, writes today that CM expects 2000 boardings every day in Leander. I guess there are a lot of people in Leander who want a ride to nowhere. I wonder if they'll have to pay more for the privilege of riding on rail.

I understand your feeling of unfairness that Round Rock and Cedar Park don't contribute to CM's budget. However, CM is a stinking morass of inefficiency. RR and CP received much less from CM than even the city of Austin. IMO, what you should pull for is for the city of Austin to pull out of the CM ridership zone. That money could go towards a much better use.

The idea that we can somehow do without a transit agency at all shows how little you know about transportation. The Feds simply won't allow it.

Problem is that we allow anybody to withdraw. The state, notoriously hostile to both transit and to cities, controls that; nothing we can do about it; but, yes, RR and PF got more in service than they paid in sales taxes - at least back then. Leander gets more today than they pay in, too.

Oh, to answer the question: early plans are to charge the same for commuter rail as for express bus - and the shuttle bus ride will be free.

Oh, thank you for straightening that out and throwing an insult at me. I guess this is a sarcastic-free zone. Don't be such a dolt all the damn time.

I promised more bile, and I delivered.

Sure, eliminating free rides on Ozone Action Days doesn't count as raising fares, but it sure reduces the incentive to walk 3/4 mile in 100° heat to catch a bus that is consistently over 10 minutes late anyway.

As for the commuter rail, why should everyone pay just the express bus fare? Why not have a graduated fare in which you pay for the distance you are traveling? When I lived in NY, you paid a lot more to ride the LIRR to Penn Station from the Hamptons than you did from Patchogue.

I think they noticed that they weren't getting any extra riders on Ozone Action Days than on other days, except for bums who enjoyed the free A/C. And OAD's don't correlate particularly well to the hottest days - we're having a string right about now when it's quite comfortable.

As for the rail fares - someday, maybe, but I expect that 90% of the 1500 passengers per day are going to be going to the two stations farthest out anyways (it doesn't make any sense to even use it if you're closer in than that with the shuttlebus penalty).

I'm sure this is too simplistic, but I used the numbers at http://www.capmetro.org/docs/Report%20to%20Community.pdf (the link you gave in comments to an earlier post) to divide total expenditures by total ridership.

I got:

Average cost for one-way fixed-route trip: $3.15

Average cost for one-way STS trip: $43.48

I don't know if CapMetro's "expenditures" includes depreciation, capital costs, or what; its expenditures don't necessarily equal cost. But if remotely accurate, it would mean that the average cost per one-way trip on popular fixed routes, like #3 or 1L/1M, would be pretty low.

I thought it was interesting that fixed routes got a little over 50% of CapMetro's expenditures while accounting for about 80% of ridership.

AC's #s look close. Regarding the proportion of expenditures to ridership...I believe it is the case that STS represents less than one percent of CMTA's ridership but accounts for around 20% of operating expenses. Hopefully the ITS implementation (STS will get the technology first) will help make this service more efficient. If we want to invest more in bus service and rail service (yes we need that too) we MUST get a handle on the STS costs. The fare adjustment is just ONE of SEVERAL changes/reforms that CMTA needs to undertake in the near future. It will be a contentious process (much like we are witnessing now) for each of the necessary changes, but needs to be done if we are to have the kind of transit we need in this region... - jmvc

Just to follow up on that thought, jmvc:

Using numbers from the link cited above, we have:

STS rides in 2006: 576,052
STS expenditures: 25,043,969

Assuming a maximum fare of $0.60 (could it be higher?), we get total maximum fare recovery of $576,052, which is just 1.38% of total expenditures.

Here's the question for people (including me) who believe STS fares should be subsidized: What is the "right" subsidy percentage? Right now it is (perhaps) 98.62%. Why not 95% or 90% or 80%? What is the basis for picking one over the other?

There's an efficiency concern in addition to the fairness concern. Setting the price too low encourages (at the margin) trips that should not be taken. Suppose an STS rider would not be willing to pay even $2.00 for a particular trip, but will take it for $0.60. At least theoretically, the rider would forego the trip for $1.40; Cap Metro would be far better off just making that cash payment rather than paying $20 or $30 or $40 to provide the trip.

I recognize you can go too far with arguments like this, but the argument against using bus fares to subsidize the people who suffer from severe disabilities is straightforward: They would be much better off if they got the subsidy in cash rather than through subsidized fares. Rather than spending $20-$40 of the subsidy on STS travel, they might prefer to spend it on something else. They'd get more utility out of each dollar of subsidy, and the rest of us would be no worse off.

It probably is not politically feasible to substitute direct cash payments to the disabled. But this might affect how we think about the "right" subsidy percentage.

One final point (I should've just posted on my own blog): I'm not sure how much of the subsidy for STS comes from the 1 cent sales tax rather than federal dollars. But sales taxes are regressive, and for that reason are not a particularly fair way to fund redistributive programs.

In terms of fairness, both to the disabled and the other transit riders, I could see STS fares equal to what it would cost to ride the bus round trip. Raise the fares to $1.00, and then keep them equal to bus fare.

"Assuming a maximum fare of $0.60 (could it be higher?)" CMTA is limited by law, I believe, on how much it can raise STS fares, but I also believe the answer is yes, CMTA could potentially raise STS fares a bit higher than was proposed recently.

Regarding the "right" subsidy - I won't even hazard an attempt on that one. Almost everything anyone does is subsidized in some manner, no? CMTA already sorta does a cash payment in the form of Taxi Vouchers (for better or worse) when a ride in a STS sedan or bus is not avaialble. I might be able to debate whether it is better to simply provide the cash subsidy, but since the law requires CMTA to provide STS service, it is moot.

Yes, sales taxes are terribly regressive, as are property taxes in many instances. It is also a dangerously volatile funding source, which is one of CMTA's problems and one of the justifications for setting a fare that provides a little more long term stability...but unfortunately, it appears that particular issue is not a community priority at this point. Hence the delay in adjusting the fares to achieve a more realistic and sustainable fare recovery - jmvc

Just out of curiosity, when you say "the law requires CMTA to provide STS service," is this federal law? ADA?

I believe the answer is yes to both. ADA is a federal law. Once again, this is what I have heard in passing. I would have to ask some questions of staff to be certain. I am pretty certain of this however. - jmvc

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