Caltrain considers lowering fares for low-income riders, raising fares for others

At the upcoming board meeting on Thursday February 7, the Caltrain board will consider going ahead with participation in the regional means-based fare pilot program, which would give a 20% discount to riders in low-income households.  Meanwhile, Caltrain staff will give a heads-up that Caltrain is likely to consider raising fares on other customers in order to address a budget gap before a ballot measure moves forward to provide dedicated funding.

Caltrain staff analysis of the likely financial outcomes of the means-based pilot is relatively optimistic. Caltrain staff estimates that the means-based fare pilot is reasonably likely to be revenue-neutral or even net positive for Caltrain, meaning that the program would attract new low-income riders, who would pay less than other riders but would still bring new revenue (see chart below).   Important elements for the pilot will be assessing how many new low-income riders are attracted, and whether the discount will encourage current low-income customers to ride more.

Caltrain riders have an average income of $129,000 and low-income riders tend to pay higher per-ride than higher-income riders; this program has the potential to reduce these equity problems. means-based-revenue-scenarios

However, also this year, Caltrain is considering additional fare increases on non-low-income customers to fill a budget gap for the years before a revenue measure is put on the ballot, potentially in 2020, to provide stable operating funding.  This month’s presentation has a summary of the budget gap and options for fare increases, and the December board workshop presentation has more details on the expected budget gap.  The options for fare increases include increases to the large-employer GoPass, which would not fully close the budget gap, and other increases (see below)

 

fare-increase-options

 

In considering whether and how to increase fares to close a budget gap, Caltrain has some new information on the outcome of the last fare increase.  After the last fare increase, Caltrain reports a: “shift in fare product usage to One Way tickets (Clipper cash) due to Monthly Pass fare increase from 28 one-way rides to 30 one-way rides effective July 2018.” This change to more one-way tickets implies that cash flow sensitive people may be shifting to more costly per-ride pricing.  That change would deepen the structural inequities in Caltrain’s fare system that were revealed by Caltrain’s analysis which showed that lower income riders spend more per ride than higher income riders. 

The decisions about next year’s budget, including any fare increases, will be discussed and made at future meetings, not this Thursday.

What do you think?

* Should Caltrain go ahead with the means-based fare pilot, given the uncertainty about revenue impact (might go down, be the same or go up)
* Should Caltrain consider fare increases to close the short-term budget gap? If so, what sort of increases? (see the chart above)
* Are you comfortable with the means-based discount program even if it adds risk of greater fares for non-low-income riders?

What do you think?  Share your thoughts with board@caltrain.com, and feel free to copy us at friends@friendsofcaltrain.com