Caltrain’s fare study summarizes equity problems, sets the stage for board decisions this fall

Caltrain’s report analyzing its fares concludes that the fare structure raises equity concerns, and sets the stage for board policy direction this fall.  Several measures that could improve equity are queued up for next steps, but won’t be ready for fall decisions. 

As indicated in earlier presentations, the study shows that low-income riders with household income under $50,000 are more likely to pay higher fares, using one way tickets or day passes purchased at ticket vending machines, and less likely to use monthly passes or have access to deep-discount GoPass fares, even if they are frequent Caltrain riders.  Lower income riders are also less likely use a Clipper card which provides lower prices than cash.

Caltrain’s study indicates that the agency could raise fares without big reductions in ridership. But higher-income riders have lower tolerance to fare increases, meaning that fare increases would hit lower-income riders even harder.

The conclusion is stated clearly: “the existing conditions research and analysis on Caltrain’s fare revenue, rider  demographics, and fare product usage patterns indicates that there is an equity question with Caltrain’s current fare products and pricing.”

The next step is for the Caltrain board to articulate a policy to balance goals for ridership, revenue, and equity.  

caltrain-fare-proposed-policyIf the Caltrain board wants to address the equity issues, subsequent steps are queued up, some sooner than others.

These steps include:

  • Further review of the GoPass program, which provides the lowest cost-per ride for Caltrain’s higher-income customers is slated for in Winter/Spring 2019
  • Moving forward with support for a regional “means-based fare” pilot, where Caltrain is one of four agencies proposed to offer a 20% discount for riders with household incomes under 50,000, which would begin, pending board approvals in late summer 2019.
  • Considering an off-peak discount, which is recommended to be deferred until after Caltrain can offer more off-peak train service.  By logical inference, the timing is probably after electric service starts in 2022, and may be after a ballot measure to provide dedicated funding.
  • Considering changing from a zone-based fare structure to station-to-station, as part of the Caltrain business plan in the coming year
  • Considering integration with regional ticketing and potentially integrated fares

A few thoughts about the study results and recommendations:

The equity problem is clear.   It’s good that the study clearly shows the equity problems in Caltrain’s fare structure, putting policy direction into the hands of the board.  

Go-pass reform and means-based fares.   Unfortunately, the study frames GoPass reform and support for means-based fares as contrasting strategies to address the equity problems.  These solutions are complementary.

Go Pass reform has the potential to cover two large classes of low-income commuters by extending the current program

  • Contract workers at the sites of major employers, who perform service jobs such as janitorial, security, and food service, who currently are not eligible for the transportation benefits available to directly employed workers
  • Retail, food service, and other low-wage workers in station areas such as downtown Palo Alto whose transportation benefits are managed by a Transportation Management Association which is not yet allowed to serve as a bulk purchasing agent for a consortium of smaller businesses

While a low-income contract worker at the site of a corporate GoPass buyer, or service worker covered by a TMA would get discount pricing through their job, and the reform would provide benefits to many people at the same time.  In order to participate in the means-based fare program, low-income riders would need to seek out the program and go through a process to verify their income level. This discount would benefit people who aren’t fortunate enough to work on the site of a major corporation or a TMA-covered district, but requires people to go through a qualifying process one-by-one, in order to be eligible for a 20% discount.  

GoPass reform and means-based discounts are complementary and should both be pursued, while considering financial consequences.  The GoPass reforms would likely raise additional revenue, because it would bring new groups of customers to Caltrain.  

The cost of the means-based discount program will be only partially covered by the Metropolitan Transportation Commission. The Caltrain board should carefully consider budget and service consequences.

  • If implementing a means-based fare requires raising fares on other passengers, that should be a public discussion.  Customers with household incomes over 50,000 should be surveyed if they want to pay more in order to subsidize lower-income fellow passengers – the answer may well be yes, as it was in the Seattle area where a regional fare increase was used to pay for a means-based discount program.
  • If implementing a means-based fare requires cutting service or cutting maintenance, that is not a good tradeoff, since all passengers including low-income riders would lose with less service and lower reliability

Business plan fare strategy and service transformation.    The Business Plan process in the next year queues up crucial discussions about what kind of service Caltrain will offer in the electric age.

Electric Caltrain will have the potential to follow the model of dozens of services around the world that started off as commuter rail, and were upgraded to so-called “regional rail”, which provides frequent, all-day, bi-directional service that serves a wider variety of trip types and customers, and typically generates more ridership and revenue than classic, peak-focused, single-purpose, long-distance commuter rail. Electric Caltrain has the ability to keep the same trip times while stopping at more stations, making mid-length trips convenient.

If Caltrain pursues this direction, increased off-peak service frequency would facilitate off-peak discounts which would benefit low-income riders.  The increased service span, and adding station stops would be a good fit with a change to station-to-station fares, which would reduce big fare jumps at zone boundaries.  Station to station fares would bring Caltrain’s fare structures closer to BART’s, taking a step forward toward integrated fares (read on). These changes could be queued up by the business plan, and then implemented with electric service.

Another transformative fare strategy common to regional rail services around the world is fare integration with other transport services. Instead of considering fast “commuter rail” as a high-end, expensive offering for wealthy customers, in parallel to an inferior, slow, inexpensive bus service serving low-income customers, such regions design services to be complementary, with feeder service offering frequent or timed connections to rapid trunk service.  

Such regions not uncommonly provide integrated fares, with all-you-can eat passes allowing a rider to use a variety of transit modes across the region.  In some regions, an “accumulator” pass allows riders to get the benefit of a predictable fare, without having to post the cost of a monthly pass in advance, helping cash-flow sensitive customers, and coming across as a good deal to all customers.  Regions that have pursued integrated fares have have found that, perhaps counter-intuitively, the new system results in higher ridership and higher revenue, because a more streamlined customer experience draws new riders.

Another, emerging opportunity for fare integration is the trend toward “Mobility as a Service”, with offerings that combine all-you-can-eat transit passes with bikeshare, scooter, carshare, ride hail, and other modes offered by a combination of public and private providers.  These “MaaS” offerings are intended to replace private car ownership with a mix of mobility services.

In order for a region to provide compelling MaaS offerings that include public transit fare integration is needed to provide simple transit components within the overall offer. For MaaS with transit to be possible, the region’s top transit agencies, including Caltrain, would need to strongly support this unprecedented level of coordination. If the region’s public transit services do not head in this direction, they risk being crowded out by convenient offerings that exclude transit. This result risks increasing traffic congestion with greater use of lower-occupancy vehicles, and worse equity outcomes, with private services skimming off the most profitable customers.

Such fare integration, is of course, outside of the scope that Caltrain can pursue on its own. As part of the board’s policy direction in the business plan, the board could – and should – encourage Caltrain to support regional initiatives for transit fare and schedule integration.


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