Fair Fare Policies: Pricing Policies that Benefit Transit-Dependent Riders

Kendra C. Taylor () and Erick C. Jones ()
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Kendra C. Taylor: CH2MHILL
Erick C. Jones: University of Texas

Chapter Chapter 10 in Community-Based Operations Research, 2012, pp 251-272 from Springer

Abstract: Abstract Budget shortfalls resulting from the recent recession have prompted some US transit agencies to increase passenger fares for mass transit. Given that the top 20 US agencies, representing 83% of transit trips, either already have or plan to implement a smart card fare collection system and are looking to increase farebox revenue, we propose introducing a “Best Fare” alongside the next fare increase. A “Best Fare” can guarantee that riders will pay no more for incremental trips than they would if they purchased a discounted pass covering the equivalent time period. This policy supports transit-dependent riders for whom prepayment for multiple trips to receive the associated discount may present a financial hardship. We apply this concept in a nonlinear Fair Fare Policy (FFP) model using cross-elasticities between fare products to determine the revenue from a fare increase that is and is not coupled with a Best Fare. We provide agency decision makers a case study of how one agency could increase revenue and reduce ridership loss using a Best Fare alongside a fare increase.

Keywords: Smart Card; Transit Agency; Multiple Trip; Transit Fare; Pass Product (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/978-1-4614-0806-2_10

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