The Peril of Low Base Fares

Are transit fares in Los Angeles cheaper than in San Francisco?  That’s the impression you’ll get from a direct comparison of the base adult cash fare.  The travel blog Price of Travel just compared the base fares of 80 major tourist cities around the world and noted that, while San Francisco Muni’s base fare is $2.00, that of the Los Angeles County MTA is $1.50.

Yes, but San Francisco offers a free transfer, so that a $2.00 fare takes you anywhere in the city.  In Los Angeles, you can travel along one line for $1.50, but many trips require a connection; in that case, you’ll pay $3.00.

The journalistic temptation to cite and compare base fares is one reason that transit agencies feel pressed to keep that number low, which in turn pressures them to raise revenue other ways, such as by charging for transfers.  It’s a bit the way budget airlines work, offering huge discounts but then charging fees for all kinds of things.

Los Angeles County transit agencies also labor under a peculiar funding arrangement in which a certain countywide funding source is allocated according to fare revenue divided by base fare.  So if you keep your base fare down (by charging for “extras,” such as connections) you get more money from the county!  This formula was intended to be a proxy for ridership, which is hard to measure, so one hopes that once smartcards become a reliable way to count riders, the formula and its perverse consequences can be left behind.  Of course, the real challenge will be to count complete passenger trips rather than boardings.  (The latter are easier to count, but double-count trips requiring a connection.)

Even Southwest Airlines will sell you a ticket from your origin to your destination, rather than making you buy each segment separately.  In fact, the ticket from A to B via a connection at C usually doesn’t cost more than the ticket from A to B nonstop, because the airline recognizes that you’re changing at C for their convenience, not yours.

16 Responses to The Peril of Low Base Fares

  1. anonymouse November 17, 2010 at 9:46 am #

    Los Angeles is also one of the few cities that I can think of that doesn’t allow free transfers within the rail system. In fact, they don’t think of it as a subway system so much as four rail lines that happen to be (minimally) connected, and that’s a big part of the problem. It’ll be interesting to see how the Regional Connector and through-routing of the Blue/Gold/Expo lines change that attitude.

  2. EngineerScotty November 17, 2010 at 10:29 am #

    That said, unlike airlines (which compete for the traveller’s business), transit agencies in different cities don’t really compete with each other. A ticket on LACMTA won’t help me get from Fisherman’s Wharf to Haight-Ashbury, and a ticket on Muni won’t get you from Hollywood to the LA Civic Center. The only reason comparing fares in different cities matters is, as you note, for arguments over which agency is more (in)efficient.

  3. bzcat November 17, 2010 at 12:35 pm #

    Not only does LACMTA insist on charging a base fare for every train ride, they won’t even let you buy all the train tickets (for each segment) at the first boarding point. I’ve resign to the fact that we will not see free transfers within the rail system in LA anytime soon (if ever). But I don’t understand why LACMTA wouldn’t allow me the option of buying both tickets for my 2-rail ride at the first point of boarding. TAP card kind of address this point but most people in LA do not use TAP. The need to buy a 2nd ticket at the transfer point is a huge impediment to more wide spread use of our rail system.

  4. anonymouse November 17, 2010 at 2:06 pm #

    With airlines, there have actually been cases where a ticket from A to C costs substantially more than a ticket from A to B via C, and people would buy tickets from A to B with a connection and just not use the second part of the ticket. It makes a kind of sense: C is probably the airline’s hub, which means the airline has a very large presence there, possibly a near-monopoly. And that means they can charge higher prices for flights to or from C, while they still have to compete for the A to B market.

  5. Scott November 17, 2010 at 2:07 pm #

    @Jarrett: Perhaps you have addressed this in the past, but I wonder what your thoughts are about the practice in Japan and the PRC/Hong Kong (and I imagine elsewhere) of charging metro fares by specific distance travelled, as compared with all-inclusively or by zones? I have seen this mentioned as a hypothetical option for the Vancouver area Skytrain system, in connection with the plan to install fare gates and “smart cards” by 2013. My concern (or suspicion) is that the current base fare would become a new “one or two stations” fare, with a third station becoming 1.5 times the old amoung, four stations 2 times, and so on. On the other hand, people who currently travel just one or two stations but cross a boundary and so pay a higher fare write positively about the idea.

  6. Scott November 17, 2010 at 2:21 pm #

    Hmmm…actually, it seems the idea is not as hypothetical as I was thinking:
    Translink proposes smart cards tapped in and out at fare gates as, among other things, “open[ing] the way toward a ‘user-friendly’ and innovative fare policy that will maximize the ability to attract and retain riders and promote increased ridership on underutilized portions of the transit system.” ( This seems to indicate a pay-by-distance and/or pay-by-line-popularity, system. Again, I would be curious about your thoughts on this. Could or has the same kind of pay-by-distance, tap-in-tap-out system been used for buses?

  7. EngineerScotty November 17, 2010 at 4:36 pm #

    With airlines, there have actually been cases where a ticket from A to C costs substantially more than a ticket from A to B via C, and people would buy tickets from A to B with a connection and just not use the second part of the ticket. It makes a kind of sense: C is probably the airline’s hub, which means the airline has a very large presence there, possibly a near-monopoly. And that means they can charge higher prices for flights to or from C, while they still have to compete for the A to B market.

    Not only that, but the airlines used to permit you to travel round-trip in this fashion–not caring that you didn’t make the trip from C to B or B to C, and letting you board the return flight back to A.
    Nowadays, if you fail to take the second part of your outbound journey (without a Very Good Reason), the remainder of your ticket (i.e. your return trip) is cancelled without refund.

  8. Nathan Williams November 17, 2010 at 4:44 pm #

    Scott: Your “elsewhere” of fares by distance includes the Washington, DC metro system, and it also includes different peak and off-peak fares, with a total range from about $2-$5.

  9. Paul K McGregor November 17, 2010 at 5:38 pm #

    Don’t forget BART is distance based as well but they don’t charge a peak/off peak fare.

  10. Alon Levy November 17, 2010 at 6:45 pm #

    Scott, the fare isn’t proportional to distance in any city I know of. In cities with distance-based fares, usually there’s a minimum amount plus an extra per distance traveled, like on a taxi. For example, Shanghai charges RMB3 plus RMB1 for every additional 10 km. It’s actually a simpler scheme than in cities with unlimited monthly discounts.
    Cities like Shanghai and Singapore don’t advertise a headline fare, because it depends on distance so much. Online aggregators differ on how to treat them; the one I know about gives the fare for a trip of 10 km or 10 stations, depending on how the fare is calculated.

  11. Art Busman November 18, 2010 at 9:42 am #

    I’d have to disagree that “budget airlines” charge fees for all kinds of things compared to the major airlines. Southwest allows 2 free checked bags and JetBlue allows 1 free checked bags compared to all the major US airlines that charge for checked bags. All the major airlines now charge for food. I’m not aware of anything Southwest or JetBlue charge for above and beyond the major US airlines. They also charge more for direct flights because you are avoiding their hubs and in the airline and package delivery business, directing things through major hubs is more cost effective for them.

  12. Nicholas Barnard November 18, 2010 at 1:36 pm #

    I think the problem with distance based fares with smart cards is remembering to tap on the way out, especially on systems like Sound Transit’s Central Link in Seattle where there is no access control.
    Also the fact that agencies aren’t looking at A to C trips and are instead seeing A to B then B to C is problematic. I remember asking Jack Latterman, a transit planner in Seattle, if they were looking forward to the additional information they’d gain from our smart card system and he said not really. I was kinda shocked given that I’d think it would be a goldmine of data, seeing unexpected transfers people are making that could be timed better etc.

  13. Jarrett at November 18, 2010 at 1:57 pm #

    For the record, I very much look forward to good smartcard data from cities where I work!  Location information about boardings/alightings is especially important, as are records of connection activity.

  14. david vartanoff November 18, 2010 at 2:51 pm #

    From my POV lack of free transfers and distance based fares are de facto redlining of neighborhoods. The WMATA and BART systems compound this by making feeder bus usage a further charge. Given that fares have almost no relation to the actual cost of the trip in question, high fares and transfer surcharges are simply disincentives to use. In the SF Bay Area, each agency has different fare policies making longer trips confusing and unnecessarily expensive compared to similar mileages in say Chicago or New York.

  15. Alon Levy November 18, 2010 at 6:58 pm #

    Art: the full-fare/budget airline distinction doesn’t really exist in the US. All airlines have changed their service levels to some medium level. But in the rest of the world, budget airlines are considerably worse – they charge for everything, have very low seat pitch, are assholes about carry-ons, and force you to buy a new ticket if you miss a connecting flight.

  16. anty November 19, 2010 at 11:17 am #

    I seem to remember a poll from metro on whether people would like to pay more (I think it was $2.25) and have free transfers or not.