Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

TransLink to raise price of discount tickets, bus passes

with 2 comments

The Richmond Review this morning has a short piece on Translink’s proposal to raise some fares. There is also a very small amount of additional information on the Translink Commissioner’s website. This includes a link to a two page letter of application which was submitted on October 30. Now that’s three links I have provided, but I have to say that most of the questions this raises in my mind are not answered anywhere in those documents.

The Commissioner only regulates “short term fares”, so the increase in monthly passes is not subject to his process. By the way, you might also notice that the Commissioner is based in Comox, so there is not much likelihood that anyone will be doorstepping him over this – or indeed, any other issue.

The justification for the increase is based on the part of the TransLink 10-year plan called Funding Stabilization: unhelpfully, neither the Commissioner nor the Review provide a a link to that. Google’s “I feel lucky” button helped me to get it for you.

The decision will change what had been a strategy to convert cash customers to tickets and passes, which has been in place for some long time now. Interestingly I cannot now recall if there was any formal research done to back up this policy, but the idea was that by deeper discounting of monthly passes and books of tickets, casual users who pay cash for each trip would be encouraged to become more frequent transit users.  Of course, plenty of other places use this strategy, but so far as I know there was no before and after market research done to determine how many casual riders would be or were converted to regular riders. Though, of course, sales of tickets and passes were monitored, so if we could see old staff reports, there may well be some data on how this policy worked in the past. If I recall correctly, there was a greater increase in ticket and pass sales in the wake of the increased discounting decision. Use of the system, of course, has always been much more opaque, and bedevilled by inadequate data collection.

In general, the people who do not use transit are not deterred by the fare. It is simply not something that non-transit users refer to when they talk about why they do not use transit. Journey time and convenience are their biggest concerns. The idea of discounting was that people who were already using the system now and then would use it more often if they paid up front. The same idea as the recent book of tickets I bought for the municipal swimming pool which gives me an extra 10% discount per swim. They also have monthly – and longer term – passes for frequent swimmers.

The arguments now deployed are not aimed at increasing transit mode share, but simply topping up the coffers. So the idea is that people who use transit a lot, and are willing to invest in tickets and passes will also not be greatly deterred by a fare increase. Cash fare riders, on the other hand, who are much less committed to transit use might well be more deterred, so an increase there might affect mode share adversely. More importantly, people on low incomes cannot afford to buy expensive passes so the fact that cash fares are held constant will help them, and avoid loss of riders, since they can only walk if they decide not to take transit.

At one time in my life I would have had access to the tables of fare elasticities  - or maybe even a revenue model that had those built in (Eva Hague produced one for Translink) – which would give some insight into the probable effects of these changes.  I think it would still be very helpful if that sort of information was included  in materials made available for public consultation. It is not that I question the strategy – as I said I can think of reasons why it might work – but it seems to me that if the Commissioner wanted to understand – and share – how the decision was made this sort of information ought to be part of the package.

Note that the above increases would have the effect of creating room for TransLink to increase monthly pass prices as well, while still keeping the passes an attractive option, relative to 10-ticket FareSaver books, for frequent transit customers.

One of the shortcomings of the Commissioner’s powers is that since he cannot regulate monthly passes that is all he is prepared to say about the discount. It is an observation that is difficult to dispute, except to say that obviously its attraction after the increase will be less than before. ‘How much less’ is the question I want an answer to.

UPass showed exactly how converting casual or now transit users to pass holders boosts ridership. The discount offered to students by UPass is significantly greater than any other transit user, and the cost to the transit system is significantly higher as well (although costs were never considered apparently until it was too late to change).But again, since UPass is not  a short term fare, he can’t say anything about that either.

One of the reasons that we need proper research into issues like this is that in the real world, you cannot hold “all other things equal” which is the great assumption of nearly every economic theory. So just looking at before and after ridership data, for instance, would include all sorts of other influences, not just fares. The service might have changed: the weather will have played a part, as would the employment situation, the fate of local sports teams getting into the post season and so on. Even if there was reliable ridership data.

My bet would be that no matter what anyone says to the Commissioner, he will approve the increase. The case for backfilling Translink’s coffers after the impact of the bet they made (that senior governments were serious when they said they wanted more transit use) did not pay off could not be simpler. The Mayors have bought into funding stabilisation as the lesser of two evils. It is not what they want or what the region needs but it is the best they can do under the circumstances. And that is probably the only way to view this fare increase.

Written by Stephen Rees

November 20, 2009 at 11:30 am

Posted in Economics, transit

2 Responses

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  1. This seems to me to simply be an attempt to clawback the federal transit tax credit. TransLink will say that riders won’t experience any increase, because they alreadt write off the increase on their taxes.

    Does anyone know what the impact the HST will have on fares? Is GST/PST already embedded in the cost of fare, or are they exempt?

    fersure

    November 20, 2009 at 3:15 pm

  2. As far as I know, the tax credit does not apply to tickets, only passes. Transit fares are exempt from GST

    Stephen Rees

    November 20, 2009 at 3:21 pm


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