Photo by Oran

One of the serious limits to fare increases is the impact on low-income people. Indeed, the current system for selling bus tickets to social service agencies will inevitably miss needy portions of the population. If the ticket program were ever radically expanded you’d almost certainly see a secondary market develop, as tickets are about as traceable as cash.

As a poverty-fighting measure, however, low Metro fares are a blunt instrument. First of all, they threaten the service that low-income people depend on. Secondly, a significant portion of the savings are recouped by middle-class commuters, employers (through transit subsidies), and the federal government (passes bought through employers are usually done pre-tax). More after the jump.

However, ORCA provides an opportunity to re-think this framework. In practice, you can’t sell a charged ORCA card to strangers on the street. Recipients would have to report the old card lost or stolen to receive a new one, strictly limiting the circulation of these cards to one per recipient. In principle it should be a relatively lightweight bureaucratic process to offer people already receiving public assistance (e.g., food stamps) if they would also like a discounted pass on an ORCA card.

Each 25 cent increase in fares brings in about $12m annually. 75 cents (on top of the increase planned for 2011) would more or less solve Metro’s revenue problem.* I haven’t done the research to know what the market will bear, but it’s clear that any additional fare increase will solve a big chunk of the problem.

To protect the poorest among us, the 150,000 King county residents living below the poverty line could have their fares frozen at 2011 levels through an ORCA discount program. To the extent these people would purchase full-price passes, this is foregone revenue, but aside from that there is no direct cost to Metro. Metro could even eliminate the $1.3m paper loss associated with the current discount ticket system. As a fringe benefit, more ORCA cards in circulation result in faster boarding.

Dedicated opponents to this idea will no doubt find the corner cases where a poor person ends up losing a big bite of their income under this plan. While those cases undoubtedly exist, they must be measured against the very regressive impact of losing transit service altogether. While direct tax subsidy is a good way to avoid both problems, no clear path to reconciling that with Metro’s costs exists. In the meantime, in ORCA we have a means of better targeting benefits and reducing fraud.

* There’s a lot to say about the structure of future fare increases, which we’ll save for later.

41 Replies to “Editorial: Fares, ORCA, and Low-Income Residents”

  1. $3 fares for trips to Seattle Center or the U-District are not the right public policy. That would likely make our base fare the highest in the country. It gets to the question of what is the purpose of the fare and how the fare level should compare to the cost of driving.

    If we had enough resources, I’d advocate for very low fares to make the decision to use transit rather than driving easy, and to reward transit users who are making the decision not to pollute, not to increase congestion, not to use land for parking, etc. A low fare also keeps transit accessible for low income riders. Higher income riders on the one hand are subsidizing the transit system through their taxes, and on the other hand are more likely to have an auto at their disposal, and to trade-off a given auto vs. transit on each given trip. A higher fare discourages them from using transit, and over time could discourage them from supporting taxes needed to fund transit.

    Transit should not be accessible only to low income riders, and employees with employer subsidies. Fares can provide a meaningful revenue contribution, but once the fares get to a level to discourage ridership, they are counter-productive, and tax revenue needs to examined, as does the cost of producing service. I don’t know where the price-sensitivity is, but $3 feels high for a base fare. You can ride anywhere in NYC for about $1.85 (Metrocard with 15% bonus). LA base fare is $1.25, about to go up to $1.50. Santa Monica is still $.75.

    We should keep transit affordable not just for low income riders, but for the middle class whose ridership and support we need to have a meaningful system.

    1. Exactly! the closer the gap between transit and driving the less appealing transit becomes. And WOW, I can’t believe the base fares around the country are so much lower, something is clearly wrong.

    2. Santa Monica is going up to $1.00 per ride, but will offer a 13 rides for the cost of 12 ticket.

      What is the going rate “on the street” for Metro tickets these days?

      Is it 50 cents on the dollar like food stamps were?

    3. I don’t care how you crunch the numbers. $2.25 is outrageous for the service Metro provides. $3 would be fatal.

      No other big city agency provides so little for so much. To find agencies with fares so high and service so infrequent, you would have to start flipping through lists of rural agencies.

      1. Many Canadian cities charge more:
        Vancouver: $2.50-5.00
        Ottawa: $3.25-5.25
        Toronto: $3.00
        Montreal: $2.75

        US cities are a bargain by comparison.

      2. Sorry, James,

        The correct comparison is not the exchange rate, but the actual purchasing power for those who get paid in Canadian dollars.

        Wages for comparable jobs date from a time when the American dollar was significantly stronger — CA$3 was US$2 or less.

        Under the current exchange rate, CA$3 may be closer to CA$3 to you, but to a Canadian, it’s still roughly the same value that it was ($2 or less terms of real value).

      3. Under the current exchange rate, CA$3 may be closer to US$3 to you, but to a Canadian, it’s still roughly the same value that it was ($2 or less terms of real value).

    4. “If we had enough resources…” Well, gee, you bet; make it free.

      When will people understand that “enough resources” are only available to the military and its suppliers? Every other corner of the economy must make do with less. Heck, soon even the military will have to make do with less.

      Transit has many positive effects on a city: it reduces congestion, at least potentially supports corridors and clusters of higher density development, if well patronized reduces air pollution and energy consumption, and provide an opportunity for people of different demographics to mix and meet.

      But it’s pretty darn expensive to provide. Most systems recoup less than 30% of their operating costs from the farebox, with taxes providing the rest. Transit operation funding is already pretty strongly redistributive. Since riders are typically a relatively small minority of a city’s population, except for New York, Chicago and San Francisco, the wider population heavily subsidizes all users. The subsidizers receive the indirect benefits mentioned above, but most individuals probably receive less than they give.

      So how much to subsidize economically disadvantaged people depends on why they fall into that category. Those who are mentally or physically disabled should certainly be supported, but I’m not certain that just being a working poor person should entitle one to a discount.

      At what level of income do you draw the line? Should marriage/partnership income be counted? Would the number of dependents be a component of eligibility? You end up with another welfare system — “bus stamps” — that can be gamed.

      There is no free lunch. Either King County residents need to agitate for greater tax authority for transit from the legislature or fares simply must rise. That’s hard on the working poor, but there is no other option other than serious cuts to base levels of service. For most transit-dependents service elimination would be a much greater hardship than a few dollars’ increase in the monthly pass cost each year.

    5. Changes from pass to Orca, no logged to before. Waiting to discover such changes. Part-time, bus Meto transfer was a premium, For costs, but transferring or a monthly payment, not used. Main cause is Visa has been challanged repeatedly. Personal one for one payment needs to be addressed by other methods. For us “senior” part-time workers as set an option to discopver. As this is the end of June, july Settings from employer, just educated me to Orca. No telephone or address had been set up for response. A real B-B-B- (situation) for prior setings, would have a need to reinstate for easier/more advantageous settin. Myself, always challanged by payments, Single settings was enough, with Orca pass setting can only be presented as this message, as to type. How could they have contacted before. Cash in pocket and tommorrow’s conditions, could need another paymnt. Cash in the pocket gets devided in more ways than one. Waiting for tommorrow, to pass.

  2. Those low income riders who pay in cash are really taxed out as it is, how much more can they raise fares before cutting into ridership? I know a lot of people who simply don’t want to spend the money for the bus anymore (particularly with sound transit because of the transfers). I guess what I got out of this post is that Metro needs to be doing more to encourage people to adopt ORCA, mainly to cut down on fare evasion.

    Whats the status on installing TVMs at transit centers around the region? I think this is a really great place to start, as it lets people put the CASH their already spending on the bus onto a card. And maybe this will help more people adopt ORCA (It would certainly make it easier for me in Bellevue).

  3. Further fare hikes aren’t going to help transit as a whole. It’s currently cheaper for most people to drive a car (uninsured, of course) than to take public transit.

    My round trip work commute, for example, is $4 on Metro and Link. Driving, it costs me closer to $1.75. My wife’s commute is $5 on Metro and ST express; about $2.90 by car. The American SOV subsidies really show up in this way.

    This is of course only counting short-term costs; fuel and oil. Folks living paycheck to paycheck only care about short-term costs.

    The poor who have access to a vehicle will use it until this inequality is corrected. We need to deal with this before hiking fares any more.

    1. “Folks living paycheck to paycheck only care about short-term costs.

      That doesn’t mean that they should.

      Car dealers and loan officers see the working poor as easy targets for overpricing—they are often victim to dealer fraud and pay high prices for older cars in poor condition; they can pay more for insurance based solely on their zip code; they pay higher loan rates; and they are the pool of customers for car title loan outfits that have repossessed hundreds of thousands of cars out of neighborhoods around the country each year.

      – “Carjacked” by Catherine Lutz & Anne Lutz Fernandez

      I’d also argue that the only way your commutes are cheaper is because you apparently don’t pay a day rate for parking. If your employers charged even $3/day, or covered the price of a transit pass as many do, then transit would certainly be cheaper.

      1. There are a lot of trips where free parking is available – whether it is employer subsidized, or provided by a business you are visiting, or unmetered on-street parking. Transit should be an easy choice for those trips, too.

      2. Here’s an easy one, start charging for all on street parking. In business areas where you want turn over (as opposed to all day hide and ride) use the “metered” system (the little reciept you put in your windshield… btw what do motorcycles do?). In residential areas charge by permit. Earmark 100% of the revenue for Seattle transit improvements (ETB preservation, reduced fare permits/ORCA, additional service hours, etc.)

      3. Oh yes, taking advantage of the poor is a time-honored business tradition. Car loans are especially predatory. But the reality is that cars are generally available to the poor. Used cars are cheap and plentiful in America, the upper classes practically throw away usable vehicles due to high mileage, cosmetic blemishes, or comfort issues. And the poor scrounge them up, and drive them until they won’t run. Charitable family members and friends pass them along.

        As for parking, we both work at retail establishments with significant free parking lots shared between customers and employees. Free parking for employees is pretty much the norm outside of downtown. In fact, I’ve even worked at downtown businesses that paid for monthly underground parking for employees. On the other hand, I’ve never worked at a retail business that offered transit passes.

        The employer-provided transit pass is very much a upper-middle-class phenomenon. The working poor rarely (if ever) get offered one.

      4. The employer-provided transit pass is also a phenomenon of cities where the transit isn’t good enough to sell itself.

        In cities like Boston, you’re much more likely to be offered an employer-distributed pre-tax transit pass.

        This is actually a good thing, as it makes these upper-middle-class riders (who can easily afford the pass) feel like stakeholders in the transit system.

        Free employer-provided pass users in Seattle seem to lack the outrage about service quality that those of us who pay $80+ per month have.

      5. Only some employers in Seattle subsidize passes but many do offer programs to allow you to purchase passes with pre-tax dollars. I’ve only had one employer who paid the whole cost of my pass and they offered a $100/month parking voucher for those who didn’t want the pass.

        We’ve actually got a fairly high transit mode share, particularly for commute trips to the CBD.

    2. A great many Metro routes are dominated by the working poor. I’m sure they know first-hand how much higher the marginal cost of a transit trip is compared to the cost of fuel in their own car. They are riding the bus because they don’t have a car that is running. And since most low paying jobs don’t come with benefits like transit passes, they are paying fares in cash if they can’t spring for a monthly pass or a loaded ORCA card.

      Therefore I favor keeping fares low – and making ORCA cards much more widely avaiable.

      1. Or because they don’t have employer-paid parking. But same result, and I agree with keeping fares low and encouraging ridership and keeping it accessible for the working poor

  4. The poverty line is far too low; there are many families who are just above or even quite a bit above the poverty line but would have a lot of trouble paying $1.50 more per day per commuting adult. One way to ensure that commuters who go longer distances and can afford to pay more end up paying more would be to charge extra for peak-only express service. People riding, say, the 218 from the suburbs or even the 76 or 64 from northeast Seattle would pay an extra 75c or dollar while the poor coming from closer in neighborhoods riding high-efficiency routes that don’t require much deadheading or anything would still pay the same fare.

    1. Allelujah, brother! The premium transit service should charge a higher fare when other transit options are available. A little use of the invisible hand could help people choose the most efficient transit options.

      1. That is a fantastic idea! I would happily pay a higher fare in exchange for fast, efficient rush-hour commuter service to downtown from my non-close-in home, especially if it got me off the hooker-filled 358. I bet a lot of other commuters would too.

  5. I’ll be interested to see how the suburbanization of poverty will affect discussions of fare policy and network design in the years to come. Many of us advocate “good service in a few places” rather than “skeletal service everywhere”, and it continues to be the case that the worst-performing routes are cross-suburban services politically subsidized by 40/40/20. But our agencies have the conflicting mandate both to seek efficiencies of design (which privilege commuter and in-city high ridership routes) while also providing a social service to the poor, efficiency be damned. This conflict will only become more apparent as poverty continues to become more suburban and diffuse and increasing numbers of middle and upper-class people move back to dense city neighborhoods or near new LRT lines.

    That’s one reason why the fairest and most transparent fare system – distance-based fares – may turn out to be counter-productive if we will continue to offer low-productivity routes as a matter of justice. Our current zoned systems work best for traditional radial travel models that are ever less relevant. A flat fare system, meanwhile, penalizes short trips and subsidizes lengthy ones. Given such difficulties, I’m starting to be convinced by those who advocate for free or extremely cheap fares and much steeper taxes that directly disincentivize driving and are cheap to administer, especially gas taxes.

    1. I get nightmares about this sort of thing. Thanks for entering it into the public discourse.

      I have no idea what the solution is, although curtailing the suburbanization of anything in the present would seem a good start to reigning in the suburbanization of poverty in the future.

    2. The US is coming back to where the rest of the world has always been. Good jobs and transit in the cities; neither in the outskirts. So the rich ride subways to work while the poor walk to subsistance jobs. The difference in the US was that suburbanization and white flight brought middle-class people to the suburbs while the transit infrastructure remained in the cities, now accessible to poor people. But then the jobs moved to the suburbs, meaning the poor needed to buy a car to get to them. Now the rich are moving back to the cities and taking back the transit infastructure, and the poor are being pushed to the less desirable suburbs and outskirts where little transit exists.

      The right answer is to put comprehensive transit everywhere, and to retrofit the residential neighborhoods and strip malls so that things aren’t so far apart from each other.

      The poor and working classes are generally moving to Skyway, Renton, Burien, Des Moines, Federal Way, Lynnwood, south Everett, and Everett. Link on Pacific Highway and in Lynnwood is well-positioned to serve them, if east-west BRT is implemented at several points.

      1. I don’t know about the US but this certainly doesn’t match with reality for Seattle and King County. The Greater Seattle Datasheet Home Page shows that the percentage of jobs in King County has been shifting way from Seattle, from 55% in 1980 to only 41% in 2006.

        The neighborhoods you identified are all old established ones where housing was built 50 or 60 years ago. It’s not surprising the houses are more affordable and that the percentage of rentals is much higher. I’d argue that these always were Seattle’s working class neighborhoods (and I’d hardly describe Skyway and Burien as “the outskirts”). The new construction has been in Redmond, Woodinville, Issaquah, Mill Creek, Duval, etc. And of the “rich” moving back to the city a large proportion are young professionals that want the city nightlife but commute to their tech jobs on the eastside; hence the “reverse commute” is almost a thing of the past. On 520 it’s often more congested east bound in the AM.

        The idea “to put comprehensive transit everywhere,” is what 40/40/20 attempts to do and is a complete failure. It dilutes the effectiveness of the entire transit system (which is why we’re staring at $3 fares) and worse than that encourages the dilution of density requisite to making transit work. Transit money is limited. You can serve serve a lot of people in a limited area or you can serve a limited number of people over a wide area; your choice. You can’t do both.

      2. True, the jobs aren’t coming to Seattle as much as I implied. I was speaking of a long-term trend. Most likely, parts of the suburbs will merely be declared “city” and gain density. But eventually the cost of oil will make living on the fringes (Woodinville, Lake Stevens) unfeasable unless you work at home. It’ll lower the cost of housing in the outer areas compared to the inner areas, and thus push the poor further out.

        I didn’t say Burien et al was the outskirts. Just that it was less desirable than the new suburbs, which is why housing costs less there and poor people move there. But the transportation there is skeletal, which is a significant burden.

        ‘The idea “to put comprehensive transit everywhere,” is what 40/40/20 attempts to do and is a complete failure.’

        40/40/20 is not comprehensive transit but pie-cutting. Comprehensive transit means a level of quality like NYC or London or Toronto, where transit is so ubiquidous that more than 50% of the population either don’t have cars or drive them only occasionally. 40/40/20 distributes the money from high-ridership areas to low-ridership areas. But that’s a false choice. The truth is that both areas need more transit (although the city can use it more efficiently).

      3. You’re presenting the false choice that we can have transit everywhere. It’s a limited resource. Other than the air we breath everything is a limited resource and you have to decide where it’s put to it’s best use. Even if we increased taxes to the point Woodinville had the same level of transit as Queen Anne it would still be a terrible waste of resources. You can’t have NYC levels of transit without NYC density and you can’t drive density if you spread transit resources across the whole county. BTW, if you live in Woodinville you’re closer to Microsoft than Ballard. It’s only in your dreams that good paying jobs are going to disappear on the eastside. Right now office space in DT Bellevue rents at a premium to DT Seattle and has a lower vacancy rate.

      4. If we have goals, we can move toward them. If we don’t have goals, we’ll end up with something else. Of course there’s a limited amount of money. As I’ve said repeatedly on this blog, we need to compromise with the transit haters and tax haters because we all live in a democracy where their vote is as valid as ours. So we need to push hard only on hour highest priorities, and push more softly on our other goals. So I’d like to bulldoze Lynnwood and rebuild it smaller with Seattle’s density, but I realize that’s unrealistic and unproductive.

        We should at least have comprehensive transit in the inner-city areas and between them. Chicago has 24-hour buses every mile or so, so why can’t we? You shouldn’t have to wait 30 minutes for a bus anywhere in the inner city. Likewise, the suburbs should have buses every 30 minutes on all the major arterials. If we can only do one or the other, I’d prefer city service, because it’s better to have one area with comprehensive transit than all areas with skeletal transit.

        But you realize that not everybody in the suburbs is a transit-hater. Some people would ride transit if it were more frequent (or even existed on the nearest arterial). Some are under 18, over 65, have a temporary or permanent disability, have had their license revoked, or don’t like to drive. And as I said, the poor/working class are moving to south King County and Snohomish County. If you deny them bus service, you force them to spend hours walking and waiting for transfers, or to buy a car.

  6. I just saw this article about NEST (Northeast Seattle Together) and I wonder if ORCA could be rolled into that, too:

    “For $600 a year, they get a “concierge service” — essentially, referrals for anything from a good plumber to transportation to a baseball game or trip to the museum — and a buddy system that pairs them with volunteers who check in on them regularly, said Judy Willett, its executive director.”

    Obviously the personal connection with neighbors is also important, but that’s a list of things that transit excels at: ballgames, museums, etc. It’s also easier for people with restricted mobility to get in and out of a low-floor bus or train than a typical sedan.

  7. A three dollar base fare means 6 miles of auto transit according to Federal deductibles.

    Add three people in a car, and that’s 18 miles, or the distance from Kent to Seattle.

  8. As i’ve said all along, some investment needs to be made in electronic transfers (like vancouver BC) need to be implemented to take the cash fare inequity out of ORCA for those on low/limited incomes, who cannot properly care for the card for whatever reason.

    As for abuse of paper tickets. Yes, something needs to be done. Personally, as much as i hate to say i think those programs should be ended. Replaced with what i dont know, prehaps a special ORCA card that changes the fareset to discounted (than the bearer would have to cough up the fare), and make the benefit expire fairly rapidly so that the individual would have to take it back in and get it reset at his or her place of assistance.

    1. An orca card loaded with a low-value Pugetpass ($1.50 or something) operates this way. It takes the difference out of the e-purse. Me and my wife did this for a long time, buying a 1-zone off-peak pass and keeping cash on the card for cross-lake or peak time commutes.

      That’d probably be the best way to handle the situation, replace the reduced fare permit with a free low-value Pugetpass with a very long expiration date. Card lost? They can revoke the pass on the old one and move it to a new one.

      Hell, the cards can even LOOK special, maybe just have a special Reduced Fare sticker on them or something, but just have a $1.75 Pugetpass on them.

      If they absolutely need to pay cash at the farebox, though, I don’t know how that would work. I’ve never let an ORCA card run completely out. What does it look like to a driver right now if someone taps a one zone pass on a two zone trip?

      1. Can we end the use of stickers, please? They can be sold, reported as lost or stolen, and then cannot be cancelled in the way ORCA can.

        The U-Pass should be rolled into an ORCA card somehow or another.

      2. From FAQs:

        “If you run out of transit products on your E-purse, you should pay the balance of the fare with cash. However, if you need to transfer to another bus, only the fare spent from the E-purse will be available as transfer value so you may be required to pay any additional fare in cash. To prevent running out of E-purse set up an Autoload to add value each time your E-purse reaches a zero balance.”

      3. On the user side, it beeps twice and the screen says “OWE +$0.50” or whatever fare difference if you do not have enough value in the e-purse.

  9. A few things I see other transit systems do that I’d like to see our local agencies do:
    1. Charge more for peak-only commuter routes. CT does this with their express services to King County. Metro and ST should consider doing the same thing. Commuter rail like fares aren’t uncommon for suburban express buses. Hopefully this would mean base fares can be lower as well. A lot of commuters get subsidized passes or can at least buy them with pre-tax dollars.
    2. Offer a discount for using ORCA
    3. Longer ORCA transfers or some form of maximum daily fare.

    1. ORCA transfers are already longer, 2 hours vs. 90 minutes previously. However, ORCA transfer windows start from when you tag on, vs 90 minutes from when the bus arrives at it’s terminus.

      1. My recollection is that if it was pay as you board the transfer was from when you got on. However, virtually every transfer I ever received was very generous on the time and you’d never be questioned over 15-20 minutes showing a transfer that was likely expired.

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