As noted earlier, VTA is proposing a base fare increase of 25%, from $2.00 to $2.50 over two years, while providing fare relief in several other ways: providing free transfers among VTA bus and light rail trips, increasing its youth discount, and continuing the Transit Assistance Program which provides lifeline transportation for very low income adults not receiving other forms of transportation support.
At the same time, VTA is increasing the price of its EcoPass bulk discount program, serving large employers and institutions, which has been severely underpriced compared to individual fares.  Employers purchase EcoPasses for all of their employees (even ones that don’t take transit). The goal is to increase transit use overall by providing the passes.
VTA’s analysis showed that the EcoPasses were generating $.61 per ride on average, compared to $1.50 for other adult fares.  In other words, major employers such as Cisco and Adobe have been paying less than 40% the cost of a typical adult rider.
As part of the fare adjustment, VTA is restructuring the EcoPass, with the highest increases targeted at corporate employers. VTA is dividing the fare program into three categories: colleges and universities, non-profit and government institutions; and corporations.
The corporate pass is expected to nearly double in price, from $.96 per ride to $1.91 per boarding. Â The steeper increase seems fair – major corporations can afford to pay; and by increasing transit use, they save valuable land that is used for car parking. Â Â Assuming the revenue per average adult boarding increases 25%, this would bring the corporate EcoPass to approximately farebox neutral — compared to the average adult fare.
We wonder if the average adult fare is the best comparable metric – would an even closer comparable metric be the per-ride return of a monthly pass? (Since if the EcoPass weren’t available, corporations would buy monthly passes instead.)  We also wonder about the merits of having lower prices for larger companies, potentially with greater ability to pay. We’ll do some research on the topics.
Overall, though, afarebox neutral EcoPass seems like a better option than eliminating the bulk-discount program entirely; eliminating EcoPass would likely resulting in less transit ridership overall, since giving out the passes to all encourages more commuters to try transit.
I can’t go to the meeting but will try to go to one of the outreach sessions.
The term “farebox neutral” is new to me. A Google search suggests why: it appears to have been coined by the GreenCaltrain Blog, in this case to refer to a fare instrument priced approximately equal to the average fare paid by a particular rider type (i.e. adults). Hmmm.
It’s reminiscent of “revenue neutral,” which means a fare or tariff modification (such as switching Caltrain to distance-based fares) that while possibly raising fares for some and lowering them for others, and possibly increasing or decreasing ridership, is priced such that it’s introduction and use results in no net change in farebox revenue (and if it doesn’t change operating costs, would also therefore result in an unchanged farebox recovery ratio.
While easily defined, due to hard-to-predict effects on ridership (increase, decrease, trip types, distances ridden and fares used). it can be tricky to actually figure out a priori whether a particular fare/tariff change will, in fact, be revenue and/or farebox recovery neutral … so it’s necessary to make some (hopefully well-informed) predictions regarding effect on rider behavior (due to demand elasticity and other factors) when attempting to determine what pricing and fare rules will ultimately prove revenue neutral when enacted.
Farebox Neutral I’m pretty sure wasn’t invented by this blog, it is a term that I think VTA has used over time to describe the policy goal – never attained until possibly now – to have its bulk purchase program provide an equivalent farebox return as other fare structures.
“farebox neutral … to have its bulk purchase program provide an equivalent farebox return as other fare structures.”
So it’s an arbitrary goal that EP be priced such that VTA’s farebox recovery ratio is unaffected/unchanged by the existence EP program.
Which, depending on its associated marginal costs (administering the program and transporting its users) and differing economies of scale, is not at all the same as pricing it so that the average EP ride generates the same revenue as the average adult ride.
To illustrate why, imagine the extremes:
1: all eligible employees always uses their EP for every trip they can make on VTA
2. all eligible employees never use their EP
The administrative costs are the same for both, but in one case, operating costs would soar and some discretionary non-EP riders may even stop riding, so EP would need to be priced *far higher* to achieve farebox recovery ratio neutrality. In the other case, EP would need to be priced *far lower* in order to be farebox recovery ratio neutrality.
(Of course, real-world EP usage can change over time, but is somewhere between the “always” and “never” extremes —but far closer to “never,” and so that’s why EP per employee cost can low while still maintaining farebox recovery ratio neutrality.