As Caltrain considers updates to its fares, there is a timely opportunity to to increase ridership and revenue, while improving equitable access to transit.
Under the rules of the current Go Pass program, the bulk-discount passes may be purchased by a major employer for that employer’s workers.
In the area that Caltrain serves, there are common situations that have been excluded by the program’s current rules.
- Major employers are not allowed to purchase Go Passes for workers at the site who are employees of contract service providers. Many major employers utilize contract vendors for services such as food service, janitorial, and facilities maintenance, as well as other long-term contract workers in their core business.
- A growing number of Transportation Management Associations provide transportation services such as last-mile shuttles, transit passes, and planning assistance to employees and residents in a focused operating area. Although TMAs may provide central administration for transportation benefits, they are not currently allowed to administer Go Passes to people at a collection of smaller sites within their operating area.
Changing the rules to overcome these limitations would be a powerful tool to improve equitable access to Caltrain. The food service and janitorial workers on the campuses of major corporations, and the restaurant and retail workers in downtown and mixed-use transit-oriented development areas typically have lower incomes and are priced out of access to Caltrain.
The outcome is a situation where Caltrain gives its most favorable pricing to full-time employees of major corporations, while lower income workers disproportionately drive. Data from Palo Alto’s TMA shows that workers at larger tech companies in downtown Palo Alto have a drive-alone rate under 30%, while low-income service workers drove at a rate over 80% before they started transit pass discount programs. PATMA has demonstrated demand for Caltrain – they created a program offering discount transit passes helping over 300 workers chose alternatives to driving, and Caltrain has been the most popular service in by far.
Contract workers are a significant portion of the commuting workforce. Major employers have a high percentage of contract workers on site. “Contingent labor accounts for 40 to 50 percent of the workers at most technology firms, according to estimates by OnContracting, a site that helps people find tech contracting positions.”
In the North Bayshore area, about 20% of workers are contracted service providers, as reported in 2017. Similarly, in downtown Palo Alto, about 20% of workers are in service jobs for smaller employers.
Because the Go Pass would remain centrally administered by a major employer or TMA, Caltrain’s cost structure would remain the same.
Increasing revenue and ridership – instead of decreasing ridership
Caltrain is currently considering another fare increase on individual riders. Unfortunately, recent staff analysis suggests that Caltrain’s most recent fare increase on individuals is resulting in decreased ridership, as customers purchase fewer monthly passes, and instead purchase individual rides, less frequently. This results in greater traffic congestion and more stressful commutes – the opposite of the goals of employers, cities, and advocates of sustainable transportation.
By making contractors and Transportation Management Associations eligible for Go Pass, Caltrain could increase revenue significantly, reducing or eliminating the need to increase fares for individual riders.
If this program change increased coverage by 20%, this could add $4,500,000 or more in annual revenue.
|GoPass revenue||$ 22,500,000|
|Additional revenue||$ 4,500,000|
Now is a good time
A previous limitation to the feasibility of this concept is that historically, Caltrain has relied on employee identification badges as the distribution mechanism for the Go Pass. Recently, Caltrain has been piloting the migration of Go Pass to use Clipper. Security risk would not be any greater than the risk of monthly passholders sharing passes.
Another historical limitation was that the GoPass was priced very substantially below the price for individual customers, creating a risk that greatly expanding GoPass use would reduce Caltrain’s farebox recovery. In recent years, Caltrain has increased the price of the GoPass so that revenue would be more proportional.
Expand Go Pass to Transportation Management Associations and Contractors
Now that Caltrain has made adjustments to its GoPass program, the time is right to expand the program to allow major employers and TMAs to have the option to provide coverage to contract workers and employees of collections of small service businesses.
This expansion would increase Caltrain’s revenue and ridership, while increasing access to sustainable transportation to lower-income workers in the Peninsula corridor, and helping to take thousands of additional cars off the road, alleviating traffic congestion and pollution.
Organizations representing employers, transportation demand management service providers, and advocacy organizations supporting transit, the environment, and lower-income workers, urge the Caltrain board to update the Go Pass to allow major employers and Transportation Management Associations (TMAs) to provide coverage to contract workers and employees of collections of small service businesses.
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