Chart 1: E-purse fare revenue apportion to two agencies

“Your ORCA card works like cash or a pass, automatically tracking the value of different fares and transfers so you don’t have to.” —ORCA card website

This is the first in a series exploring the workings of ORCA based on communication with agency staff, contract documents and technical documents received by public records request. One of the key agency benefits of ORCA is automatic apportionment of fare revenues based on actual use. In this post, I am going to use examples to explain how the fare you pay is divvied up among the transit agencies. If you understand the chart above, then you pretty much get the general concept. Otherwise, read on for an explanation.

The scenario is an adult taking a peak period trip on Metro’s RapidRide A Line ($2.50), then transferring to Sound Transit’s Central Link at SeaTac to Westlake ($2.75).

Let’s start with cash. The person pays $2.50 for the Metro bus, then he buys a one-way ST Link ticket for $2.75. Total fare paid is $5.25 since cash users don’t get intersystem transfer credit. Metro and Sound Transit get to keep their respective fares.

The person decides to get an ORCA card with an e-purse, which is electronic cash. The person taps his ORCA card to pay $2.50 for the bus. When he taps his card at SeaTac/Airport Station, he pays only another 25¢ for Link because he gets a transfer credit equal to the fare he already paid (within 2 hours). Total fare paid is $2.75, equal to the Link cash fare. How much do Metro and Sound Transit each get out of that $2.75?

The answer is:

  • ($2.50/$5.25) × $2.75 = $1.31 to Metro
  • ($2.75/$5.25) × $2.75 = $1.44 to ST.

The revenue each agency receives is the agency’s trip value divided by the total trip value, times the total e-purse value used for that linked trip. The trip value is the full cash fare for that trip. Used e-purse value is transferred from ORCA’s e-purse float account to the agencies’ accounts daily.

Now the person realizes he can save more money by getting a pass, so he buys a $2.75 Regional Monthly Pass for $99 (36 × $2.75) and uses it only for his daily commute. Assuming he works 20 days in a month, he makes 40 one-way trips on Metro and Sound Transit. How much of the $99 does each agency receive?

The answer is Metro gets 47.6% or $47.16 and Sound Transit gets 52.4% or $51.84 from the $99 pass.

Pass revenue is allocated in proportion to the total value of services used on each agency during which the pass is valid (e.g. one calendar month). That total value is added up from all the trips made with the pass. At the trip level, it works like the e-purse case but the trip value for a pass is either the fare value of the pass or the fare for the trip, whichever is least. That $1.31/trip to Metro is multiplied by 40 trips to get the total service value for Metro of $52.40. The same is done for Sound Transit to get $57.60. That’s a total of $110 in service value but he paid only $99 for the pass. So each agency’s share of the $110 is calculated as a percentage, then multiplied by the $99 pass purchase price and the result is the answer above. The pass user never has to think about that and also saves $111 over paying cash. The agencies automatically get their share a month after the pass expires without complicated and costly annual surveys.

When using a pass in combination with e-purse, the above rules apply. However, the trip value used for the e-purse calculation is adjusted by subtracting the pass fare value from the trip value.

The chart below illustrates the scenario where a 50¢ PugetPass is used in combination with an e-purse to pay for a journey involving multiple transit agencies.

ORCA 50c PugetPass + E-purse Example
Chart 2: PugetPass + E-purse Example

If an ORCA pass user pays the difference with cash instead of e-purse, the receiving agency keeps all the cash for itself. There is no systematic apportionment of cash payments.

Next in the series: currently unused features that could appear in the future.

31 Replies to “How ORCA Fare Revenue is Apportioned”

  1. Interesting! I wonder if they do surveys to figure out apportionment (MT/ST/CT) on the SLU streetcar.

    1. I’d be amazed, given the complete lack of effort they’ve put into Orca on the SLUT.

      I’ve sometimes wondered if I could use my Orca to “pay” companion fare on the SLUT just like I “pay” my own…

      1. If I were Metro/SDOT I would be looking at bring the SLUT onto the OCRA system with the First Hill streetcar. They likely have to get a different kind of fare transaction machine and buying them all together would be better than buying 3 now and 4(?) in a year or so.

      2. I honestly wouldn’t bother spending money on fixed readers, at least with the SLUT on its current alignment. Maybe if they could get a handheld reader for an inspector to use, so you’re doing more than just wave it at the guy.

        What I’d really like is for the city to use the TBD money to build a 1st Ave streetcar that connected the SLUT to the First Hill line. Then you would actually have a streetcar worth riding, and worth spending money on readers and fully-featured ORCA-enabled TVMs.

      3. Yeah I they may just give all revenue to Metro since it’s relatively small, or split it using some downtown Seattle average or something.

        The whole fare system on the SLU streetcar is confusing: multiple different types of TVMs, signs by the on board TVM that say it does not accept Metro paper tickets or passes (leading many to think the sign applies to the streetcar instead of just that machine), and the different branding making it unclear if you can use ORCA or not (though on the website it definitely says you can).

        Of course, there are two fairly good reasons: first riders are currently commuters using employer passes, and second most tourists using it pay cash. The chart above shows there’s actually little incentive for agencies to discourage cash payments since they could actually get more revenue out of uninformed people paying twice instead of using ORCA. And hey, if you’re in Seattle hitting Tom Douglas restaurants and walking around Lake Union Park, what’s another $2.50?

  2. And another fun fact from this same PDR: The agencies pay $2.41 per ORCA card. But before you say “Then they shouldn’t be charging us $5 for it!” remember that it costs money to distribute them. Thirty some cents plus labor to stuff it in an envelope, some labor to stuff it in a TVM, or some labor to hand ’em out at the Westlake Customer Stop.

    1. But they don’t charge anything to distribute bus tickets. I buy $2.25 bus tickets for use when I’d get an OWL transfer over using my e-purse.

      Back when they’d mail out a physical pass every month (for those without employer passes) they didn’t charge to distribute the bus tickets.

      If anything they should sell them for $2.50 at most! Why should the agency be making a gross profit of $2.39 for something that saves them distribution costs in the long run?

      1. Reducing the cost of ORCA cards won’t increase e-purse usage dramatically, unfortunately, until Metro drops the time value of paper transfers. I still think they should reduce the time value of the paper transfers first, see if there is mass conversion to using e-purse, and then re-evaluate the likely effects of reducing the cost of ORCA cards.

        Metro still doesn’t get it that overvalued paper transfers are killing their efforts to reduce cash payment, and that that is quite likely increasing the travel time of existing routes by several percentage points.

      2. Well my first try at getting an OWL paper transfer after 9 pm with my ORCA card failed miserably. The drive looked quizzically at me, then said your ORCA card is your transfer.

        If I really want an OWL transfer I’m still going to use bus tickets until I get a clarification from Metro. Another strike against ORCA.

  3. SLUT and other streetcars will be brought into the system. There are some technical issues atm, with both platform and onboard options. But KCM is studying it.

    1. Technical issues?

      I fail to see how its much different than Link. If anything its simpler than link because people don’t have to tap off, they just tap on.

      1. Metro wants an onboard system, not platform like link. Unlike a bus there would be several card readers onboard. The difficulty is linked to the double ended operation of the streetcars, and how they handle ignition events, and triggers for upload into the Orca back end systems.

  4. My employer subsidizes my annual ORCA card, deducting a fixed amount from every other paycheck. When I tap on or off Link, the screen says I have a “Passport,” and I’ve been curious how the transit agencies whose services I use get paid for my trips when I use this type of card. Are the total costs my employer pays (whatever the price is; I have no idea what percentage of the total fare value they pay) apportioned similar to the $99 monthly pass that Oran described in the article?

    1. The short answer is yes. I don’t have the documents with me at the moment but what your employer pays is either per use or a flat rate negotiated with the agencies, based on actual use.

      1. Flat Rate… Passport is annual, discounted unlimited pass. Pricing is based on average usage and based on the fact the company must purchase a pass for all employees. The Passport revenue is split between agencies based on averages and agreements between the agencies.

    2. You can learn about ORCA Business Passport at Metro’s site.

      Employers with fewer than 500 employees pay a flat rate per eligible employee based on where the business is located. Larger employers have “custom Business Passport,” where the employer pays a negotiated amount based on actual usage. This is why my employer discourages us from using our passes for non-work trips, and made us sign a form that we understood that they can obtain usage records for individual cards.

  5. So which agency is hurting more for cash, ST or Metro? Metro, right? Could people “game” the system, with an army of bus-hoppers to split fares from ST over to Metro?

    Example:
    Getting off a ST bus downtown in order to either walk up to Cap/First Hill or catch a bus going up. Usually it’s the same amount of time either way based on traffic delays/etc.

    Granted it’s small numbers but it now adds a little input into my decision-making process of whether to walk/wait for getting up the hill…

    1. Depends on if you count capitol projects too. ST is hundreds (thousands?) of millions short whereas Metro is only $60.

  6. Very interesting – ORCA’s fare distribution works mostly how I imagined it would, oddly enough.

    I wonder how much money Metro loses from monthly pass holders tapping in/out in the DSTT (in case a light rail train happens to be the first vehicle coming). I rarely ride Sound Transit otherwise, so most of my $90 is going straight to Metro.

  7. Will there be a future installment in how each agency pays into the cost of operating the ORCA system? and how much it costs to operate?

  8. Ever since I found out that Metro fines passholders who forget to tap the same amount as regular fare evaders I’ve stopped trying to convince infrequent transit users to get ORCA. Aside from the problems mentioned above, you’ll still be treated harshly and punished at every turn.

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