when is a fare hike really a fare cut?

Images-6When it provides free connections, as a Los Angeles Metro report is finally proposing to do.  The Bus Riders Union is screaming about a fare hike, but for many riders — those whose trips require a connection — the proposal is a fare reduction, because the transfer penalty to be eliminated ($1.50) is far bigger than the hike in the base fare ($0.25)

The vast dense core of Los Angeles is one of North America's great grid systems, designed to allow easy travel between any point A and any point B via a single connection.   Unfortunately, their current fare structure charges for a connection.  This makes as much sense as a road tolling system that charges only for turns. 

It's nonsense.  Connections are an inconvenience to passengers that is required by the structure of an efficient network.   Charging for connections encourages riders to demand wildly inefficient services like the late and famous 305, which zigzag diagonally across the grid, increasing complexity without adding much useful service.  It amounts to punishing customers for helping Metro run an efficient and attractive service pattern. 

Like other fees, fare penalties for connections arise in part because journalists and activists over-react to the base fare figure, creating more political heat for raising that number.  So like money-losing airlines, the agencies have to look for other things to charge for to hit their fare recovery targets.  But charging for connections is counterproductive, because connections are the foundation of the network.  Airlines don't do it.  In fact, airfares via a connection are often cheaper than the nonstop.  That's because the connecting itinerary lets the airline run a more efficient service pattern.  

So don't believe the news about a proposed fare hike in LA.  Some people will experience one, but many cash paying passengers, who are often among the lower-income riders, will save.  

And one thing's even more important than that:  The pricing scheme won't be crazy anymore.


28 Responses to when is a fare hike really a fare cut?

  1. Michael Benami Doyle January 24, 2014 at 5:24 pm #

    On top of which, Metro’s current base fare is among the lowest in the nation, and the proposed fares would be, too. Let the Bus Riders Union visit LA’s peer cities like NYC or Chicago where we’ve been paying above $2 for years.

  2. Shane Phillips January 24, 2014 at 5:39 pm #

    I’m 100% on board with the fare restructuring, as it’s far more sensible and I think it particularly benefits those that are most likely to be lower-income: riders who are coming in from less central, less expensive parts of the region. To be fair though, it is a fare hike insofar as it will raise more money than the current fare structure does though. But Metro’s fares are already ridiculously low, and raising more money by charging a more reasonable rate to those who can most afford it is a great idea.

  3. anonymouse January 25, 2014 at 7:08 am #

    In LA in particular, the fare structure arose out of a particularly perverse incentive where there was some county funding that was allocated among the various transit agencies by “ridership”, where that ridership was not actual ridership, but the result of dividing total ticket revenue by base far. So there was an incentive to keep the base fare as low as possible and thus have the transfer penalty as high as possible. Indeed, when I first moved to LA in 1991, the base fare was something like $1.10 with 25 cent transfers, and 22 years later, it’s only gone up to $1.50 but trasfers are effectively another $1.50.

  4. Lisa Schweitzer January 26, 2014 at 2:26 pm #

    Ehhhh. I don’t think it’s nonsense to be concerned, and I don’t think we should be as dismissive of the BRU as you are here. Yep, charging for transfers is charging more for bad service. But it’s not a foregone conclusion that we’re all going to be better off with fare changes.
    For one, it’s not just base cash fares that are proposed to go up. All time-sensitive pass costs are proposed to go up, not just by a little, but by a lot. Those passes already eliminated transfer fare penalties–that was Metro’s big justification for instituting the day pass when they got rid of tokens, which I still think raised the costs for impoverished passengers. Social service agencies use to bulk buy tokens to give to their service population, and the tokens never expired. Metro finance folks had to have hated them for all those reasons, but they were much more useful to people who are on and off again travelers than either cash or time-sensitive passes are.
    Second, a lot of LA transfers are interagency transfers that Metro’s unilateral fare policy changes don’t do anything to change. So while people making within-metro transfers would get them for free, people who are making across system transfers pay a higher cash fare for the Metro part of their trip but do not get the relief on the transfer. That group unequivocally becomes worse off under the fare changes. How big that group is relative to the people who save merits thinking about.
    Finally, I’m happy that people might save money, but within caveats. Metro needs farebox revenue. I know it’s theoretically possible that all these passengers could save money at the same time Metro gets more revenue, but the Laffer curve is also theoretically possible, but has not once actually produced a revenue gain for the taxing body that lowered rates. I want good service and I’m willing to pay for it.
    So ehhhhhhhh. I’m not willing to dismiss the BRU or other concerned people so easily.

  5. Jeffrey Jakucyk January 27, 2014 at 9:41 am #

    I love the comparison with connections in the airline industry. That’s a very important point that needs to be brought up whenever talking about transfers.

  6. Wai Yip Tung January 27, 2014 at 10:03 am #

    There is a Bus Riders Union in LA! The LA metro could have talk to them first. Profile a number of riders and convince them how their fare would be reduced.
    Unfortunately bad math and irrationality is the norm rather than exception in the press. Also 100% of rider will experience a raise in the base fare. The onus is on the agency to explain how this is a reduction and not a raise. You can’t expect the public to figure out.

  7. Atheistically Yours January 27, 2014 at 11:04 am #

    Everyone seems to forget that the MTA does not “run on”, nor “do” LOGIC! If it MAKES SENSE (like having a light-rail line that connects to LAX, or having bus lines long enough so that NO TRANSFER IS REQUIRED!), it WILL NOT GET COMPLETED! Get it? As for rider input, FORGET IT! When was the last time the MTA did ANYTHING that involved rider input, that would BENEFIT THEM?

  8. JJJJ January 27, 2014 at 12:36 pm #

    @Michael, dont subscribe to the race to the bottom.
    Yes, x city charges more. Yes, y city provides less service. Theyre not to be hailed as models.

  9. Dana Gabbard January 28, 2014 at 1:57 pm #

    Lisa Schweitzer, I don’t believe it is accurate “a lot of LA transfers are interagency transfers” except in places where Metro and muni services overlap like San Gabriel Valley (Foothill), Gardena, Torrance, Culver City or Santa Monica.
    Atheistically Yours, you love to rant and rave across the net in blog comments. So what are you doing to build support for your positions? Alliances? Meetings? Do you really think this approach is useful beyond venting your spleen?
    Wai Yip Tung, Metro for years had joint meetings with the BRU during the consent decree. By all signs these were not overly productive. The agency has also offered to give briefings when various issues arose since the decree expired. The BRU turned them down. It is built on a perpetual agitation model. And look at the stances they are promoting — No cars? Free transit? 5,000 bus fleet expansion? Sound bites with no substance.
    One other problem of the low base fare is many therefore use it instead of the day pass and slow boarding when they have to feed the money into Metro’s balky fareboxes.
    Interestingly a number of agencies in the region also eliminated transfers when introducing the day pass. This includes OCTA, RTA and Omnitrans. Sunline in the Coachella Valley is the sole exception.

  10. Eugene January 28, 2014 at 1:59 pm #

    A few months ago AC Transit (in Oakland/East Bay) proposed scrapping their $.25 transfer in favor of a $5 day pass. They voted on it but I never heard (and can’t seem to find out) if it passed. I know this day pass idea is becoming more popular around the country. I’m curious of people’s thoughts on this approach/trend.

  11. Ken W. January 28, 2014 at 8:17 pm #

    At first I thought I would like this idea. But upon reading the comments over at The Source, which is Metro’s own internet board, I’m beginning to think this may not be the best way to go.
    Many of the poor are saying this is going to end up hurting them than helping them. While we’ve were lead to believe that poor people travel far to work, they said in their own words, that “we don’t travel 20 miles to go flip burgers at McDonald’s and earn minimum wage.” And you know, that’s a valid point. Why go work for McDonald’s 20 miles away to earn minimum wage when there’s a McDonald’s in your own neighborhood? People earning minimum wage are not going to travel that far when the jobs they qualify for are plentiful in their area. A $2.25 fare hike only ends up hurting them to get to their workplace nearby and cutting into their pay checks than helping them.
    Another comment that had me thinking twice was that this “free transfers within 90 minutes” is not what it’s cut out to be. The travel time on buses are reliant on street traffic conditions, so going from point A to transfer point is highly dependent on street traffic. And there are also constant delays on our Metro Rail system, especially the Blue and Expo Lines, added to the fact that when you TAP at the validator, it has no correlation to the time that the train actually pulls into the station. You could be waiting as much as 30 minutes on the platform after TAP, not moving, just standing, so you realistically have only 60 minutes to make it to the transfer point, pending no delays.
    I’m beginning to think we should ditch this concept go straight to pay-by-the-distance pricing with TAP-in and TAP-out, which has proven successful abroad, notably in Asia. It seems to work on trains, gated or non-gated, and on buses over in Asia. We should look into that idea.

  12. Kenny January 30, 2014 at 6:12 pm #

    Ken W. – The point about transfers isn’t about the distance traveled, but the direction traveled. You can travel from downtown LA to Santa Monica (about 15 miles) on a single bus if you’re taking the 2, 4, 704, 20, 720, 33, 733, or several others, since each of those buses just follows a single street all the way along its entire length. However, it’s impossible to get from Vermont/Sunset to Wilshire/Western (about 2.5 miles) without a transfer, since you’re going diagonally. The point of eliminating the transfer penalty while raising the base fare is that someone who works 5 miles from their home used to pay more if they lived northwest of their work than if they live directly west of their work; now the person who lives directly west of work will pay slightly more, and the person who lives northwest of their work will pay a lot less, though they will still take longer to get there because of the connection.
    Also, I was very confused about the people in the comments saying that you could wait up to 30 minutes on the platform after tapping – I’m pretty sure that the longest scheduled gap between trains is 20 minutes, which is also the frequency they run during maintenance (which is really quite annoying, since the “real time” info apps don’t seem to know about the actual schedule then). I suppose that could be a problem if you are at the blue line in downtown Long Beach and just miss a train, and then have to transfer when you get to downtown LA (about 60 minutes away).
    It’s potentially a bigger issue on some of the buses, which might take close to 90 minutes to go their whole length.

  13. Ken W. February 1, 2014 at 11:02 pm #

    I don’t think transfers or travel direction, or one bus ride or two bus rides going diagonally will become an issue when you just base it on distance.
    Five miles of transit will always be 5 miles of transit, whether or not you take one bus or two buses to get there, or how long it takes you to get there. It’s still 5 miles and you only pay for 5 miles of transit.
    Distance is the ultimate factor and I think it should be the decisive factor to be used on transit. Because that’s what transportation is all about: covering distances between point A and point B. Travel distance always stays the same no matter how long it takes you to get there or how many transfers are needed.

  14. calwatch February 5, 2014 at 11:43 am #

    Jarrett has posted before on how there is really no “fair” way to charge fares, at least completely. A distance based system would be confusing and unpredictable for someone to make trips. You could frame it as a distance based discount, where the base fare is something like a Toronto-esque $3.00 and then adjust downward for shorter trips, but then you get into issues of enforcement. On buses your fare table could be absurdly complex.

  15. J Grant February 7, 2014 at 1:51 pm #

    Distance based fares isn’t that complex because we have TAP today. You just fill up TAP with cash and you tap in when you board and you tap out when you exit.
    Many cities run this way, millions of people do this everyday all over the world. Americans visit places like Washington DC, London, Tokyo, and Singapore and they grasp the concept quickly. Atlanta and Salt Lake City is moving to them too. If it were complex, they wouldn’t be using it.

  16. Taxi driver February 7, 2014 at 8:36 pm #

    There is one mode of transportation that runs by the distance. It’s called a taxi cab. They work fine. You get on, the meter runs and you pay at the destination based on how far you went. Don’t tell me that with all the technological advancements that we have like GPS devices and reloadable cards that we can’t apply a similar model onto buses and trains but make it cheaper per each person.

  17. calwatch February 8, 2014 at 10:32 am #

    Actually on bus, distance based fares are not common – there are some agencies that use zones like NJ Transit and Golden Gate Transit but zones are much wider. The average bus rider has an average income of less than $30,000 so is unlikely to have visited some of those countries which have distanced based fares, or be immigrants from Latin America where local buses generally charge a flat rate. And Salt Lake City is taking a pause on converting their system to distance based fares because they have to address Title VI concerns, as members of racial minorities may be disproportionally impacted by moving to a distance based fare system.

  18. Nexus I February 8, 2014 at 10:04 pm #

    People making under $30,000 a year is not going to be living in McMansions out in the suburbs and have 20 mile commutes into the city so they can earn minimum wage.
    People who earn minimum wage, get paid minimum wage because they only qualify for jobs that don’t require that much skill. And those types of jobs are plentiful near where they live. And they tend to be renters who live in apartments. If a minimum wage worker lives in a rented apartment in Compton, do you think that person is going to commute to Malibu to flip burgers at the McDonald’s in Malibu? No, that person is going to be flipping burgers at the McDonald’s in Compton!
    It doesn’t matter if there are no other US cities that uses it, it doesn’t matter if minimum wage workers haven’t visited other countries. All those statements you just said are totally irrelevant.
    Furthermore, we shouldn’t make decisions based on copying what other cities in the US does or base decisions whether or not other cities in the US does it or not. If anything, the US as a nation are complete amateurs in public transit compared to the rest of the world.
    Even New York’s public transit system, the best in the US, sucks compared to those in Europe and Asia. Why copy amateurs in the US when we could learn from the world?
    Besides, you say that “as members of racial minorities may be disproportionally impacted by moving to a distance based fare system.”
    Do you have any valid studies that apply that to the realities of how the poor live and work in Los Angeles? Do you really think minimum wage earners live in big homes out in the suburbs in LA? Do you really think minimum wage earners travel 20 miles to get to work to their minimum wage jobs? Can you provide comprehensive proof that a vast majority of the people in Los Angeles, have a need to travel longer distances to actually need a “all you can ride, anywhere, as long as you want for a $2.25 system?”
    Unless there is a valid study, all you say is baseless, just like the thought that the honor system was working fine.
    And lastly, who’s to say that this will be the end of it? $2.25 fare hike will end up becoming $2.50 later, then $3.00, then $5.00. At what point do we say then, that “it’s stupid to running this way?” When it’s too late? Reminds me of the honor system.

  19. Nexus I February 8, 2014 at 10:18 pm #

    If this still doesn’t make sense to all of you, then think of it this way.
    1. Where do you live?
    2. Where do you work?
    3. How far is it between (1) and (2)
    This is the trip that you do the most often. Forget about “oh I can go from Sylmar to San Pedro for $2.25, what a great deal!” Forget that because YOU DON’T DO THAT EVERYDAY!
    What do people do everyday, on a constant, frequent basis? You go to work. You go to school. You go to the supermarket to buy groceries. You go to the bank. All of these are the trips that you do everyday. And for most Angelenos, these core activities do not occur that far from where you live and work.
    The idea is not “you get to go as far as you want for $2.25.” The idea is “I do this everyday, this what I do the most, and what it’s gonna cost me to these things.”
    Are you going to spend $2.25 just to go to the neighborhood bank? No.
    Are you going to spend $2.25 just to go to the neighborhood supermarket? No.
    Are you going to spend $2.25 just to go visit your friend who lives 3 miles away? No.
    Are you going to spend $2.25 just to go the nearest post office? No.
    You see where I’m going? Who gives a flying F— if it’s going to be $2.25 from Long Beach to Downtown LA or from Venice Beach to Union Station, or when the Regional Connector is built, all the way to San Bernardino County. NOBODY DOES THIS!!
    Now imagine that when fare hikes go up to $3.00 or $5.00. It’s going to cost $5.00 whether you ride the bus to your neighborhood supermarket less than 5 blocks away or whether you go from Sylmar to San Pedro? At this point, no one is going to care about whether no one in the US runs on a distance based system or how it’s going to be confusing, people will learn a new system because it’s going to hurt their wallet!!!
    This is why the flat rate fare system is completely ridiculous. The only reason why most cities in the US were using this is because they didn’t have any funds to invest in technologies to use distance based fares.
    But now we have a rather cheap contactless payment system that enables us to do this with relative ease. So why should we keep sticking to old ideas and outdated ideas, keep being afraid of change, while the rest of the world keeps moving ahead?
    It’s not about “no one does this in the US” or “the poor hasn’t traveled abroad,” it’s about fixing the system once and for all!!

  20. Asian Dude February 9, 2014 at 12:46 pm #

    I think everyone is forgetting that LA has a large Asian American population. You can’t deny that immigrants from Japan, Korea, China and Southeast Asia makes up a large voice in LA. And you can’t deny that the Asians have made huge strides and advancements to their economy and public transit systems in the past 60 years. Perhaps it’s time to listen and learn from the Asians in regards to developing mass transit.
    The whites, blacks, and Hispanics are not capable of building mass transit. The Asians OTOH, are the experts in building mass transit that actually works, is efficient, and even profitable. If they know something that we don’t, we should learn their methods utilizing the huge Asian American population we have here in LA. Because, isn’t that what the groundwork of this country is based upon? We learn from other cultures, not brush them off.

  21. calwatch February 9, 2014 at 9:57 pm #

    Since this seems to turn into a personal bashing of me I’ll point to Jarrett’s piece – https://www.humantransit.org/2009/05/in-search-of-fair-fares.html -that states that there is no such thing as a “fair” fare system. A distance based fare would dramatically increase complexity, encourage gamification, and provide unknown impacts to Title VI protected populations – none of which can be solved in the span of when Metro wants to do fare increases, which is September. Other MTA Board members wanted to look at distance based fare, but staff concluded that it was not done elsewhere in the United States and nixed it. You may argue that we should be looking globally. While this is a fine statement, the fact is that implementing a true distance based fare system, like Singapore, in Los Angeles would likely cause outrage. Sure, there may not be many people making the trip from Long Beach to Sylmar, but the ones that do would have their fares increase dramatically and will be the most vocal to complain. The average user who may see their trips get cheaper or at least stay the same will not complain, but nor will they express their approval at the change. What will work in Singapore, an authoritarian state where residents accept fiat decisions, will not work in the United States and especially in California with a diverse population, healthy democracy, and laws such as Title VI and CEQA (would raising fares disproportionally on longer trips result in these individuals driving, causing increased greenhouse gas emissions and air pollution??? How would you know without doing an EIR?) prevent distance based fares from being considered anytime in the forseeable future.

  22. calwatch February 10, 2014 at 8:58 am #

    Please go ahead and lead that charge. Put a referendum on the ballot mandating distance based fares and get a majority of voters to vote for it. Meanwhile the rest of us will live in reality. Politicians do listen to people at public hearings – the previous fare increase was tempered as a result of massive public outrage at the qunitupling of senior/disabled fares. All of the other cities – San Francisco, DC, and Metrolink/Coaster – do distance based fares on RAIL, and for all of those systems save one (WMATA) there is only one path between one station and another.
    Incidentally, it is up to the distance based fare people to prove why their system is necessary. The ones who want the existing fare system don’t have to prove anything. I’m not doing the research for you, you are making the change to the status quo, so you will need to prove your case, not ask me to do it for you.

  23. Lionel State February 10, 2014 at 9:53 am #

    Supervisor Zev Yaroslavsky ordered Metro to conduct a study whether the honor system was working. That didn’t happen through public hearings. And it turns out fare evasion was rampant.
    What makes you so sure that the Metro Board will not order another study for fare restructuring? Everything that Metro has done so far from the reliance of the honor system to building rail at grade to wasteful spending on artwork, to failures of TAP, there’s a point where the people lose faith on Metro.
    People are skeptical about this idea. They make a valid point about the poor, the most reliant on public transit to go shorter distances will be hurt the most.
    Metro Board members are politicians. They read comments sections and they Google, Facebook and Twitter just like everyone else these days. Public hearings aren’t the only way to reach their ears. Look at the ExpressLanes’ maintenance fee waiver. Pubic hearings didn’t change their attitude, news reports, letters, news stories, Google, Facebook and Twitter changed that.

  24. Dana Gabbard February 10, 2014 at 8:40 pm #

    Lionel State, the study was simply a fare check of the Orange Line. And it mostly proved the Sheriff Deputies have been doing a poor job of enforcing fares on the busway. I see little support for your broad claim that there is any sort of huge crisis regarding Metro. Do you really think blog posts etc. will have significant sway on how the fare process works out? Whatever you are smoking it must be very potent.

  25. Millennial Power February 11, 2014 at 3:06 am #

    Dana, you’re the one that’s loopy. Do you really think public hearings and meetings in this day and age is going to be adequate to hear the concerns and voices of 10 million people living in LA County? There is no way a townhall type meeting is going to accomodate that. People have neither the time or expense or luxury like you retirees who have nothing better to do than go to these meetings. People are not going to waste their time, take their precious vacation only to get 3 minutes of talk time on the microphone.
    You’re living in a dream world of LA being a small city with 19th century ideas. We’re living in a huge metropolis of 10 million and growing with extensive mix of cultures, opinions, races, ethinc groups, income levels, sex, gender, and religion. We’re in 2014. We have Google, Facebook, Twitter, blogs, new article comments. We can write letters to elected officials, we can fax, we can do all sorts of things now.
    Dana, you’re old. Admit that things have changed a lot since the 1930s and 1940s. We’re not living in 1950s Los Angeles. In 1950, LA County had a population of 4 million. Today, we’re encroaching upon 10 million and it’s bound to grow. There is no way we can continue with 1950s solutions for LA for 21st century issues. There is no way a stupid, ancient 1950s method of going to townhall meetings is going to change things. This isn’t the Owens Valley water wars where sheeps are brought into the council meetings. Realize that you and your entire age group is getting old, senile, and declining. We’re the ones taking over from now own and we’re going to do things our way.

  26. calwatch February 11, 2014 at 9:40 am #

    Aside from commentors on this and The Source I don’t see a significant groundswell of support for distance based fares, either online or in person. There is a crowd of people who don’t currently ride transit who think that, if distance based fares were implemented, that their two seat five mile trip would magically cost $1 or so. In reality, with distance based fares, the base trip would cost similar but the outer trips would cost substantially more, who are the people that will complain loudest about the issue. You can look at the Metrolink fare chart, with a “drop fee” of $5 for even the shortest trip (although that acts as an EZ day pass equivalent) for confirmation of that.
    With the options on the table right now not including distance based fares, I can’t imagine that they would be introduced on Metro any time soon. With Title VI and CEQA requirements, imagine all the education that would be required – in eight languages, no less – about this would work.

  27. Dana Gabbard February 11, 2014 at 6:37 pm #

    Millennial Power, the saddest way to respond to something you don’t want to hear is engage in personal attacks. I doubt it will sway too many who read these exchanges.

  28. Here's my take February 11, 2014 at 11:30 pm #

    The commenter above said that people want a two seat ride for five miles for a buck, but the way the buses are crowded these days, you’re lucky to get a seat anyway.
    If you’re not going to get a seat for a measly five mile trip and are left to stand, they shouldn’t be selling seats in the first place. Just sell trip miles instead.
    Why should I have to pay more for crappier service? I’m not paying $2.25 to travel five miles for something that I have to stand. That’s not how business works. No business is ever going to gain any profitability for charging more for crappier service.
    I’ll find other ways to travel five miles. I can easily buy a bicycle. I can get a motorcycle license and buy a cheap Chinese moped. Why would anyone want to suck up between a choice between paying $2.25 flat rate or $110 a month when I can buy a bicycle or a moped? $110 bucks a month time 12 months is $1320. I can buy a really nice bicycle or a cheap Chinese moped for that amount.
    What Metro ends up overall is losing more ridership numbers and overall, even less farebox recovery ratios. They can raise their fares and keep the same way all the want, the people still have a choice to get around with alternatives to Metro.