reveiw of fy11 metro fare changes

8/7/2019 Reveiw of FY11 Metro Fare Changes

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Finance & Administration Committee

Information I tem IV-A

April 14, 2011

FY2012 Budget Update: Ridership and RevenuePrelim inary Assessment of Fare Changes


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TITLE:

FY2012 Budget Update: Ridership and Revenue

PURPOSE:

This presentation provides an update on the impact of the FY2011 fare changes,an assessment of the current fare structure, and customer feedback about faresand the fare structure.

DESCRIPTION:

The presentation evaluates the current fare structure. In November 2010, theBoard adopted new fare policy principles to help ensure that Metro`s farestructure ensures and enhances customer satisfaction; establishes a mechanismto allow customers to determine their fares easily; optimizes the use of existingcapacity; establishes equitable fares and ensures compliance with federal

regulations; facilitates movement between modes and operators throughout theregion; encourages the use of cost-effective media; and generates adequaterevenue while maximizing ridership.

As part of the FY2011 Operating Budget, the Board adopted fare increases andchanges. This analysis concludes that that:

Recent change to fare structure generally aligns with board-approved fare

policy principlesEconomic conditions influence ridership changesRevenue and average fare have increased compared to the previous yearCustomers appreciate SmarTrip, dislike peak-of-peak surcharge

Metrorail

Washington Metropolitan Area Transit Authority

Board Action/Information Summary

Action Information MEAD Number:Resolution:

Yes No


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Metrobus

Bus ridership declined from the same period last yearBus ridership decreased significantly several months before the fare

increase

Cash surcharge resulted in shifts to SmarTrip

FUNDING IMPACT:

This is a presentation about changes in customer behavior and customerreaction to the FY2011 fare changes.

RECOMMENDATION:

That staff provide the presentation to the Finance and Administration Committee.


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Washington Metropolitan Area Transit Authority

FY2012 Budget Update:ers p an evenue

Preliminary Assessment of Fare Changes

Finance and Administration CommitteeApril 14, 2011


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Pur ose

changes and customer feedback:

fare policy principles?

How sensitive are bus and rail riders to fare increasesand surcharges?

How does the year-to-date revenue and ridership

How do customers view Metros fare structure andtechnology?


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Fare Policy vs. Current Fare Structure

Surcharges moving passengers to SmarTrip Ridership increasing on special services despite fare

Express and Airport buses

After-midnight and weekend rail

Room For Im rovement Distance-based fares deemed complicated:

customers prefer simple fare structure

POP surcharge not resulting in expected time-of-dayshifts


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Fare Assessment Findings

Ridership shows slight decrease (-1.3%)

Weekday ridership less sensitive to price than expected Significant shift to SmarTrip

mar r p use rate ncreasefrom 76% to 79%

POP surcharge shifted few 60.0%Rail Ridership & Avg Fare, % Change

trips: 3% AM, 3% PM

51.0%

30.0%

40.0%

50.0%

insensitive to fares Full-benefit rail trips up 2.5%

-3.1%

6.1%2.8%

21.7%.

10.0%

20.0%

Ridership

Avg. Fare

-10.0%

0.0%

Weekdays Weekend Days After-MidnightPeak


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Fare Assessment Findings

Ridershi shows moderate decrease -3.0%

Previous 5 months before fare increase (Jan May 2010)showed 5% ridership decrease over previous year

Significant shift toSmarTri : 91%100%

Bus Ridership & Avg Fare, % Change

SmarTrip use rateincreased from 64% to 76%

On-board SmarTrip load 40%

60%

80%

increased 6% to $3.92

-1% -3%

25% 22%

0%

20%

Regular Express Airport

i ers ip

Avg. Fare

-15%

-40%

-20%


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Pro ections vs. Actuals

Actuals of revenue and ridership within 6% of budget

projections Ridership between fiscal years impacted by differences in

u r u , w r y rv

100

120

140

housands

Ridership

-0.9%

$300

$350

$400

housands

Revenue

-3.6%

$2.00

$2.50

$3.00

Average Fare

-2.7%

20

40

6080

Metrorail

Metrobus

- .

$50

$100

$150

$200 MetrorailMetrobus

-5.0%$0.50

$1.00

$1.50

Metrorail

Metrobus

+1.1%

Last Year Budget This Year Last Year Budget This Year

.

Last Year Budget This Year


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Customer Feedback from

Doing Well Needs More Please!Improvement

SmarTrip Vendors

go!

Fare structure toocomplicated, fare tables too

Payment Options

.PassesAppreciated


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Overview of Findin s

Adheres to man of the board-a roved fare olic

principles Rail and bus ridership is less responsive to fare changes

than expected

Surcharges resulted in shifts to SmarTrip Revenue and average fare are up compared to prior year

Customers appreciate SmarTrip, dislike POP surcharge,

in are structure comp icate


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Overview of Findin s - continued

Metrorail

o Rail ridership marginally lower than the same period last year

o POP surcharge resulted no significant shift of ridership to other periods

o Late night peak and weekend ridership increased despite large fareincrease

e ro us

o Bus ridership declined 3% from the same period last year

o Year over year decrease in bus ridership was attributable to externalfactors - such the employment rate - in addition to the fare increase


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A endix


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Fare Policy Applicable Fare Structure ResultsPrinciples

1. Ensure and enhancecustomer satisfaction

Discounted transfers between modes Customer savings from using SmarTrip

+ Customers appreciate SmarTrip

- POP disliked by riders- Distance-based fares deemed complicated

Customers prefer simple fare structure

2. Establish a mechanism toallow customers to

determine their fareseasily

Fare tables posted at rail stations On-line trip planner

Passes available for rail and bus Flat-fee bus boarding charge

+ Customers appreciate passes+ One-day rail pass use increased over

previous year

- understand

- Customers want to be able to explain farestructure to non-frequent riders

3. Optimize the use of Regular fares vs discounted fares + Discounted fare encourages weekend

existing capacity Peak-of-the-peak (POP) ridership- POP surcharge not resulting in expected

time-of-day shifts

4. Establish equitable fares Rail fares are based on distance traveled

+ New fare structure successfully underwent

with federal regulations discounts Student SmartPass & DC student farecard

MetroAccess fares equal twice theequivalent fixed route

+ Increase in E&D ridership over previousyear


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Fare Polic A licable Fare Structure ResultsPrinciples

5. Facilitate movementbetween modes andoperators throughout

Regional use of SmarTrip Card Bus-to-bus transfer with free 2 hour window Rail-to-bus and bus-to-rail transfer discount

Unable to assess due to Nextfare3 datastorage format

the region Bus pass revenue sharing

6. Encourage the use of

cost-effective media

Paper fare media surcharge (rail)

Cash surcharge on bus

+ Surcharges resulted in significant increaseof SmarTrip use

All transfers require SmarTrip card

7. Generate adequaterevenue while

Distance-based regular fare (rail) Discounted fares during mid-day, evening,

+ Fare increase resulted in negligible changein rail ridershi

maximizing ridership and weekends (rail) Regular fare charge from midnight to close(rail)

New provision allows for special fares forspecial events

+ Average rail trip length unchanged despiteincreases in distance-based fare

+ Large fare increases for special rail andbus service (after-midnight rail, airportbus raised revenue without si nificantdecrease in ridership


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FY2011 Fare Changes

Fares

o Regular fares increased from $1.65 to $1.95 anddiscounted fares from $1.35 to $1.60

o Distance-based fare increased for short, medium, andlong trips

o Maximum fare increased from $4.50 to $5.00(up to $5.45 with surcharges)

-

Surcharges

o $0.25 surcharge on paper fare media

o Peak-of-the peak (POP) surcharge of $0.20


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Fare Changes Metrobus

SmarTrip Fares

o Re ular service fare increased from 1.25 to 1.50

o Express service fare increased from $3.00 to $3.65

o Airport service fare increased by $3.10 to $6.00 $0.20 cash surcharge

Decreased transfer time window from 3 to 2 hours

e ro ccess Increased MetroAccess fare to twice the equivalent fixed-

route fare 7.00 maximum fare


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Fare Assessment Methodolo

Compared ridership between FY2010 and FY2011

o Evaluated 5 months of data (Sept Jan) except where noted

Used raw data, not reported system ridership, to facilitate detailed analysis

o Reported data adjusts for fare gate issues and other data anomalies

na ys s m a ons

Incompatibilities between datamarts prevent use of 5-month data for allaspects of analysis

Unable to assess impact of shortening bus transfer window

Does not filter out data points resulting from special events and track work


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Chan e in Economic Environment

Monthly avg. jobs in DC Moodys* 701K 724K 3.3%

DC unemployment Moodys* 11.9% 9.7% 2.2 percentage points

eg on unemp oyment oo ys . . . percentage po nts

Hotel rooms sold STR Global(Sept only)

1.224M 1.236M 1.0%

Smithsonian visits Smithsonian 12.50M 12.58M 0.7%

Indicators averaged over the 3-month period, September November

Office

Average Price of Gas US DOE EnergyInformationAdmin.

$2.65 $2.92 10.2%

* Moodys Analytics as of December 2010** represents primary metropolitan statistical area


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Fare Assessment Findings 5 Months of Data:Sept - Jan FY10 vs

-

ers p s ows s g ecrease - .

o Inclement weather and track work likely reduced

Significant shift from paper fare card trips (-2.3M) to

SmarTrip trips (+2.1M)o SmarTrip use rate on rail increased from 76% to

79%

o Long-distance riders not adversely impacted by

increases in both base and distance-based fares


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Fare Assessment Findings 2 Months of Data:Sept & Oct FY10 vsSe t & Oct FY11

On average, weekday ridership was less sensitive to price

Full Fare only

than expected

Weekend and after midnight ridership increased despite

% ChangePeriod Ridership Fare* Elasticity Est**AMPeak(Weekdays) -2.6% 21.7% -0.12

Midday(Weekdays) -3.9% 22.4% -0.18

PMPeak(Weekdays) -3.3% 21.3% -0.16

Evening(Weekdays) -1.8% 21.0% -0.09

Late(Weekdays,10PMtoMidnight) -4.8% 20.8% -0.23

Weekends(beforemidnight) +6.1% 24.7% 0.25

After MidnightPeak(Fri/SatOnly) +2.7% 51.0% 0.05

* Fare change calculated from average fare, not actual fares paid, due to variations by distance**Percent change in ridership for each percent change in average fare. Metro uses a range of -

0.15 to -0.30 for budgeting purposes.


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Fare Assessment Findings2 Months of Data:Sept & Oct FY10 vsSept & Oct FY11

AM and PM POP periods shift only 3% of riders each

Full Fare only


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Fare Assessment Findings 5 Months of Data:Sept - Jan FY10 vs

otal ridershi decreased 3% from FY 2010 to FY 2011

Sept - Jan FY11

o Previous 5 months before fare increase (Jan May 2010)showed 5% ridership decrease over previous year

o Bus riders are disproportionally affected by the recessionand job loss in certain sectors

r r - . r rtrips (+1.7M)

o Average on-board SmarTrip load is $3.92, up $0.24 fromprevious period


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Fare Assessment Findings 5 Months of Data:Sept - Jan FY10 vsSe t - Jan FY11

Riders are not as sensitive to fare increase as ex ected

Full Fare only

Regular service was the least sensitive to the fare increase Airport service had largest ridership decrease (15%), but also

%Change

ServiceType

Est.*Ridership Fare

Regular 1% 25% 0.05

Express 3% 22% 0.13

Airport 15% 91% 0.16

*Percent change in ridership for each percent change in fare. Metro uses-0.25 for budgeting purposes.


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Fare Assessment Findings1 Month of Data:Sept 2009 vsSept 2010Full Fare only


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Pro ections vs. Actuals

7 Months of Data:Jul - Jan FY10 vs

Jul - Jan FY11

MetrorailFY2010thru Jan

FY2011thru Jan Budget

% var FY10to FY11

% var FY11to Budget

Revenue* $276,745 $324,565 $336,559 17.3% -3.6%

Ridership* 124,082 123,691 124,796 -0.3% -0.9%

Average Fare $2.23 $2.62 $2.70 17.7% -2.7%

Metrobus

Revenue* $60,755 $76,401 $80,389 25.8% -5.0%

Ridership* 74,055 70,415 74,920 -4.9% -6.0%

Average Fare 0.82 $1.09 $1.07 32.3% 1.1%

* in Thousands

reveiw of fy11 metro fare changes

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