ORCA LIFT on ST ExpressThe Sound Transit Board of Directors is scheduled to take action on the proposals for fare increases and adding a low-income fare category on ST Express and Sounder at its monthly meeting next Thursday, November 19, from 1:30-4:00 pm. The public comment period on the proposals ended last Thursday, so any further lobbying requires communicating directly with board members.

Most of the public debate has centered around implementing the low-income fare on all ST Express routes, and not just on routes that operate wholly within King County. The King-County-routes-only option would create a lot of confusion for holders of the ORCA LIFT (low-income) card.

The primary concern for having LIFT fares on all ST Express routes appears to be that Sound Transit staff projects the program will run at a small loss, but that’s because they’re assuming 100% of low-income riders will sign up. If we use more realistic assumptions, the fare change not only doesn’t lose money, it’s actually profitable. Let’s look at the numbers.

ST staff projects an annual profit of roughly $662,000 for a general fare increase with a new LIFT fare of $1.50 only on routes operated wholly within King County (522, 540-567, and 577). The option in which LIFT fares ($1.50 intra-county and $2.75 multi-county) are implemented on all ST Express routes is projected to be a net revenue loser, to the tune of $295,000 per year. Obviously, the all-routes option would bring in less revenue than the KC-only option, given that all the fares would be the same for everyone except LIFT holders, while LIFT holders would then be paying the LIFT fare instead of the higher regular fare. But the math required to get to that $957,000 annual hit — the difference between these two revenue projections — bears close inspection.

Sound Transit did an origin and destination survey in 2011 and 2012, from which it estimates 24.5% of ST Express riders would qualify as low income. But then, staff assumes that all those riders would obtain and use a LIFT card if LIFT were to be honored on ST Express, meaning LIFT taps would grow to 24.5% of all boardings.

The projected revenue loss for each LIFT tap, vs. the new regular ST Express fare, is roughly $0.75, when accounting for transfers and passes. LIFT taps are projected to be 4,653,539 out of 18,996,217 total ST Express annual boardings if LIFT is implemented on all ST Express routes.

Extrapolating from ST’s figures, it would take just 394,000 qualifying boardings to not use the LIFT card, at $0.75 extra revenue for ST per tap, to wipe out the $295,000 projected revenue loss. That would still leave 4,260,000 LIFT boardings, or 22.4% of all boardings.

King County Metro has several months of data on LIFT use. From May to September, LIFT as a percentage of ORCA boardings grew from 2% to 3%, with a slowing upward trend. Even if LIFT taps continue to grow at the rate they did from August to September, it would take years to get to 24% of boardings being by LIFT.

ORCA boardings

When looking at the graph above, consider that Metro has 120 million annual boardings, or 10 million per month.

If ST Express follows KC Metro’s trend, LIFT boardings would be closer to 4% the first year. Under that scenario, only 760,000 of all ST Express boardings would be by LIFT. After accounting for the extra revenue from regular-fare boardings by low-income riders, the annual profit off the all-routes version of the fare change would be $2.9 million.

Reality will lie somewhere between Metro’s experience and ST’s extremely-fiscally-conservative assumption that all riders who qualify as low-income will go get the LIFT card. The fare change, while honoring ORCA LIFT on all ST Express routes, is pretty much guaranteed to turn a substantial profit for the near term.

Meanwhile, the ridership projections for the LIFT-on-King-County-routes-only option has ridership going down from what would happen if there were no fare change, by 135,000 boardings per year. The projection for the LIFT-on-all-routes option would yield an increase of roughly 56,000 boardings per year. Once LIFT fares become available, any low-income rider considering quitting ST Express due to the fare increase would presumably make the rational choice of getting a LIFT card, and saving money.

A more realistic estimation of riders that would obtain and use ORCA LIFT would result in a projection of both ridership and fare revenue going up beyond what is projected for no fare change. That doesn’t include the operational savings from converting lots of cash fumbling to ORCA tapping (which saves 4.6 to 6.9 seconds per boarding, according to King County Metro data). More riders, more revenue, reduced travel time, and reduced barriers to being able to access public transit: Why would the Board not jump at this opportunity?

50 Replies to “Analysis: ORCA LIFT on all ST Express Routes a Win-Win”

  1. Fantastic post, and fantastic work on LIFT generally. The program seems to be an unqualified success at this point, and more agencies need to get on the bandwagon.

  2. Correction. It’s a Win-Win-Lose. People who claim to be low-income win. ANYONE can get a LIFT card if they want, and once they get it, it’s for life. There’s no yearly reevaluation. They don’t have the manpower to check s. Transit agencies win. And the struggling middle class they jacked up the fares on lose.

      1. Notably, in 2016 a single person who works at least 40 hours a week at minimum wage in Seattle won’t even qualify for LIFT. They will actually make too much money, which shows how far the minimum wage has moved.

        I am aware that a lot of minimum wage workers don’t work full time, which would mean they would still qualify for LIFT. Workers with multiple part-time jobs exceeding the LIFT threshold would have an incentive to only show one of their pay stubs, however. That is untruthful, yes, but I doubt that many people would go through the effort to do that.

      2. “Employed (paid in cash): Letter from the employer signed and dated with gross income for the client for the last 30 days.”

        You’re really employed and make too much to qualify. But you tell them you’re employed part-time and paid in cash. Then you become the fake employer, make up some name and company, and sign and date a letter saying your employee (you) makes next to nothing doing occasional yardwork or something.

      3. If i was that clever, i could probably get a real job, like maybe for a conservative think tank. Honestly, that sounds like it would take s lot of research and effort for a simple discount on bus rides

    1. Sam, you got one thing right: There is no yearly re-evaluation. The discount indicator programmed into the card is set to expire 2 years after receipt. Once the discount expires, the card continues to function as a regular fare card. So, yeah, the card works for life, but the discount does not. Those who still qualify will have to go back and get a new card in order to continue receiving the discount.

      As you pointed at the other day, the qualification methods are well-defined, and there are lots of locations where multi-tasking staff can perform this transaction swiftly, in amongst the other work they are already doing. And, Sound Transit doesn’t have to pay a penny for King County’s card distribution costs.

      This increase brings ST Express fares up to Metro/Link/Streetcar/Community-Transit fares for RRFP holders and youth riders (6-18). It makes regular ST Express 1-county fares the same as Metro’s peak 1-zone fare, and still doesn’t catch the multi-county fares up with Community Transit’s commuter fares.

      1. Requalification should be annual similar to Obamacare subsidies, food stamps, etc. And, like with Affordable Care Act subsidies, recipients would need to show the following year’s tax return and “settle up” the difference between the appropriate subsidy and the correct fare if necessary.

      2. Sam has a good point that the various programs ought not expire simultaneously, creating a sudden big hit for barely non-low-income folks. The more frequent requalification, the higher the administrative cost to benefit disbursed ratio gets.

      3. Most “income-based qualification” programs I know of here in NY are based on last year’s tax return… which has the advantage of extreme simplicity.

      4. Nathanael,
        NY has an advantage as far as administrationg “income-based qualification” based on last years tax return in that they have a State income tax. Not to get into the weeds on if WA should adopt an income tax but what happens with the huge number of people that just don’t file; work for cash, have less income than required to file, etc? I like the idea of having multiple ways to prove need. For example if you’re on Medicaid then you’ve already qualified as low income. Come to think of it that seems like a problem with LIFT if they have a hard and fast rule about income threshold.

        FWIW I’d agree with your assesment of Nixon but to his credit he was a pretty good foreign policy wonk. I’ll disagree about Ford. He got a bum rap from the press about “can’t walk and chew gum at the same time” based on one clip of him tripping on the ramp of Air Force One. He was actually a decent college athlete and had to be a sharp cookie to lead the country though the situation we were coming through. Carter OTOH, is a heck of a nice guy but not the sharpest tool on the peanut farm. Reagan was a Democrate and a bit big supporter of JFK. He didn’t become a Republican until the Democrates started running on the “what can the government handout to you” platform.

  3. I completely agree with this. I remember the switch to ORCA from cash being one of the best things for my own bus riding experience. And conversely the fumbling for cash being one of the things I hated most. I don’t usually ride the ST buses, but yesterday I did and one of the passengers had to go through this. Miserable experience for all involved. Expand the program.

  4. Interesting. LIFT requires an in-person application, correct? Has there been any discussion of application sites outside of King County?

    1. Yes. The estimated cost for ST to make LIFT cards available at sites in Pierce and Snohomish County is $100,000 per year according to ST staff.

  5. Can transit make itself anymore confusing for the average Joe from (not from Skagit) Kokomo?
    Well, apparently the answer is still a resounding YES, it can be.
    A simple look at Metro fares shows 3 columns (off pk, pk-1, pk-2) and 6 classifications of riders in each, for a matrix of 18 fares. ST will undoubtedly add some wrinkles to that maze.
    Referring back to Metro shows the fare paid as a percentage of full fare in each of the 3 categories varies from 31% (Sr, Pk-2 zone), to a high of 70% (Access, off Pk) and everything in between.
    Interestingly, Orca Lift (income based) is the same as youth fares which vary from 45% to 60% of full fare.
    Would it be asking too much for the cadre of bean counters to take a break from all this, and just say our fare is this, and if you are a senior, youth, disabled, or below 2x the poverty line, we’ll only charge you 1/2 price. Simple! Maybe too simple for some.

    1. The proposal at hand (for all ST Express routes, not the King-County-only routes mess) helps simplify the fares. I agree that LIFT and youth fares should all end up being half price, as the agencies reach the financial ability to do that. Of course, that probably means continuing to raise regular fares unless we can come up with other funding sources that meet with your approval.

      1. Oh, spare me on the funding sources issue.
        From ST’s own fiscal note: “This represents less than one-percent of Sound Transit’s $73 million annual fare revenue, and is arguably within the bounds of error of the modeled financial projections.”
        If you really want to put this in perspective, divide the cost of the most expensive proposal by both agencies annual operating and capital budgets of about $2B and you get .0003 or an insignificant amount of money in the big picture. Not even a rounding error.

    2. Yes, and make it very clear that they are working to simplify riding transit in the region at all levels, including fare collection.

    3. They should just simplify the fares. A regular fare and a reduced fare. Reduced fare would include seniors, disabled and low income. Children aged 18 and under ride free.

      1. Joe, the proposal makes transit fares much less confusing. mic is making things more confusing by changing the topic to Metro’s byzantine fare structure.

  6. How does this factor into getting rid of on board transactions all together?

    Wouldn’t this count as Title VI mitigation for going cashless?

  7. Even if it did operate at a $500k loss, you could think of it as spending a half million to unify fare policy in support of Dow’s push for agency integration and customer convenience. Instead of paying consultants nearly that much to tell you to do the same thing, you accept a small revenue hit in order to make the system better and simpler. The fact that they’d likely make a profit anyway is just bonus and makes it a slam dunk.

    1. Um, Zach, not to go all right-wing or anything, but “make a profit” is not the right phrase. “Increase net revenue” would be more accurate, though it will also reduce operating expenses. However, I don’t think that the Agency’s computations include that, because it’s so speculative.

      So, “increase net revenue”?

      1. And the increase net revenue is for the fare change as a whole; that is to say, it has almost nothing to do with extending the LIFT fare, and almost everything to do with increasing everyone else’s fare. It would be charitable in the extreme to describe an assertion that extending the LIFT fare to all ST Express routes will be profitable as merely disingenuous.

        I have no substantive objection to the LIFT fare extension: the amount of money involved doesn’t even qualify as low hanging fruit for those who want to criticize ST for wastefulness.

        I do have two problems. The first is a a transparency: this is essentially a welfare program being financed from funds that the voters and legislature went to great pains to ensure would be used for transportation only, largely because they believed that any attempt to route the money through traditional local government bodies would inevitably be “wasted” on welfare. While I think that all the compartmentalization of money we do in Washington is a bad idea, I don’t get to unilaterally set the rules, and I do believe that it’s important to live within the democratic process. The second is that I think that extending the LIFT fare in return for raising fares elsewhere is a bad deal. I’d be happy to trade it for eliminating cash payments on ST Express completely.

        As part of a grand deal to tally eliminate cash payment on ST Express, I would wholeheartedly

      2. this is essentially a welfare program being financed from funds that the voters and legislature went to great pains to ensure would be used for transportation only

        That’s the question I keep asking. If King County thinks this is a great idea, and it is, why are they making it an unfunded mandate against transit? And transit outside of King County to boot! Get a spine and pay for social welfare programs from something other than money earmarked for transit. I guess one reason is ST’s pot of gold is pretty easy to derail. If the only source of funding is picking the pockets of transit riders then recoup some of the money by ditching the Senior unFair. Check out Household income by age. Seniors genuinely in need of help could of course qualify based on the same requirements as everyone else.

      3. It’s less egregious than Access, which uses vehicles that wouldn’t otherwise be used and cost a lot more than a regular bus. And it’s not going for a non-transit purpose like home heating subsidies or something. It’s just adjusting the fare schedule to reflect what people can afford.

      4. One reason the senior and disabilities discount exists is because of the federal requirement that these fares be no more than half the peak regular fare. Yes, the RRFP fares are still lower than they have to be, and we ought to be moving toward a consolidated half fare for all discount categories. A yes vote from the ST Board on the all-routes option would be a step toward that ideal.

      5. BASIC REQUIREMENT
        For fixed route service supported with Section 5307 assistance, fares charged elderly persons, persons with disabilities or an individual presenting a Medicare card during off peak hours will not be more than half the peak hour fare.

        I should have known it had something to do with strings attached to money D.C. redistributes. Half of peak fare is $1.37 assuming you calculate it off the lowest peak fare (oi is our system overly complex). So charging a $1 isn’t far off. But, it only has to be valid as I read it off peak. Plus as it’s set up a person is “required” to have a Reduced Fare Permit which I’ve never seen even asked for let alone enforced. Obvious thing to do here is issue a Senior Fare ORCA which must be used instead of cash (i.e. cash pays full fare no matter what). And with a little searching I find no Federal definition by the FTA of “elderly person”. So, in short the County can just make LIFT the defacto reduced fare program by making in not worth the hassle of applying simply because you’re 65.

      6. Bernie, under Federal law you have to be able to access discount cash fares with a Medicare card. There are convolutions in some systems that allow this for faregate systems – BART sells “red tickets” at grocery stores, WMATA sells senior Smartrip cards and libraries, and LACMTA has the ability to add a senior/disabled fare on a regular blue TAP card, a huge loophole that fortunately is too complicated for most people (including those that would benefit) to figure out. But for bus systems that accept cash, they must have a discount half fare available at the farebox.

      7. Bernie, under Federal law you have to be able to access discount cash fares with a Medicare card.

        Calwatch,
        I’m pretty sure you meant to say Medicaid, not Medicare. I have no problem with that. You have to be low income to qualify for Medicaid. Medicare, paid for by the recipient, is a government healthcare insurance plan that pretty much everyone qualifies for that is 65 and can collect Social Security. It’s not income based; although high income earners sometimes pay more. What I’m opposed to is the automatic discounted fare at 65 regardless of income or net worth.

  8. Thanks, Alex, for calling attention to the problem of working people earning barely enough money to live, but too much money to be eligible for breaks of any kind. Probably the main reason that the term “Liberal” is a swear-word among the very people that any policy must have in order to merit the “L-word.”

    Though it’s also true that this exact situation has been forced on Government by budgetary strictures billed as “Conservative.” Which many working people vote for out of spite against liberals who themselves feel that because they have to care for the desperate first, they can’t afford to help the deserving.

    The “market” system works very well for things that aren’t life and death, either for people or their institutions. But for things like public transit, though the accounting has to be equally prudent, the calculations have to be different.

    One, in an advanced country, there should be no such thing as “working poor.” With core idea not that more people should get government help, but that the vast majority be able to earn enough to live good lives on their wages. And also enough to pay for an efficient, honest government and its services. Such as transit.

    If a transit system is considered, as it should be, a tool to increase general personal productivity, then it could financially “pay for itself” without fares at all. Coin-or credit-card-funded- home toilets are possible. But cost of revenue collection, and shovels for non-payers, and for cholera wards would mean much red ink.

    Right now, I think that a well-run system they can afford without pain or humiliation is worth some flexibility for young people whose schooling is vital to national productivity, people whose reflexes cause car crashes, and people with disabilities that include chiseling. Not Grand Theft Transit.

    So Orca Lift move is step in the right direction. And Sam, just show up at Customer Services with a sample of your comments, and they’ll give you, free, a lifetime regional pass,and a first class plane ticket to Germany, with a signed plea from the President to Angela Merkel to give you asylum.

    Mark

    1. the problem of working people earning barely enough money to live, but too much money to be eligible for breaks of any kind. … this exact situation has been forced on Government by budgetary strictures billed as “Conservative.”

      I’d point out that the EIC was enacted by the Nixon/Ford administration.

      Coin-or credit-card-funded- home toilets are possible. But cost of revenue collection, and shovels for non-payers, and for cholera wards would mean much red ink.

      You must not pay a water bill or haven’t looked at the line item charges. I’ll just say this, Bellevue has a low rate of property tax assessment but they make up for it in “spades” when it comes to their pay per flush water bill. But even though we’re on septic it isn’t as crazy as our Democratically controlled King County government taxing transit riders to pay for transit subsides. LIFT by gum really needs to directly fund the issued ORCA cards so that the money collected when tapped is exactly the same as a standard card.

      1. The Nixon and Ford administrations were economically left-wing compared to *every* subsequent administration. Actually, Ford was left-wing by any measure (though not particularly competent). Nixon is considered right-wing because of his embrace of racism, militarism, foreign invasions, illegal spying, and general autocracy — *not* because of his economic policies.

  9. Sorry if I missed this but is there any analysis that takes into account new riders attracted by LIFT? I know LIFT is a relatively small program and that 24% number just on the face of it seems absurd but what about people that might start using transit because of the reduced fare? Making the assumption that no new routes are added because of overwhelming demand from LIFT riders, if someone switches from driving to taking transit that fare is a 100% increase in revenue. I know it might seem a bit far fetched but a lot of people base their decisions on out of pocket expenses. That is to say they don’t amortize the cost of owning a car over the miles driven but look only at what it costs in gas to drive to work vs bus fare. You turn that positive in the favor of riding transit and people will switch. If they realize they can ditch the car then “friends they may thinks it’s a movement.”.

    1. People and governments get muddled about what the purpose of transit is. A city that’s larger than walking distance across needs people going from place to place or it won’t have much economy or tax income or cultural life. They can do it by providing good transit to everyone, or by building roads and forcing people to spend thousands of dollars a year on cars and tear up the city with parking lots, or something in between. So if the LIFT program causes a lot of poor people to switch to transit, or they make more trips that they’ve been foregoing, and it has to buy more buses because of this, then that just brings the level of service up to where it should have been in the first place. If people are going where they want to on transit, then they’re improving the economy and cultural life and cohesion of the city and making it more competitive, and they’re not polluting the air like their car would. The only case where transit overuse is a legitimate problem is homeless people riding it all day, but that’s not really a transit problem but a side effect of not providing housing for them.

      1. By these arguments we should be reducing fares for everyone, to encourage more transit use. Instead it is a fare increase on 96% of the riders to benefit 4%. If the 96% ride less after a fare increase, there will be less revenue not more.

  10. This should be a no-brainer, for the reasons of simplicity and uniformity. It also provides further reason for the concept of centralizing functions that make sense for all of the transit agencies. Rather than have meeting after meeting amongst senior staff and managers of multiple transit agencies, their associated travel expenses (including the most costly, time), and their debriefing, fare-setting could be a centralized function. Other candidates might be facilities (signage), purchasing (buses), personnel, finance, and, grants.

  11. If the realistic cost of adding Lift is so low, then shouldn’t it be possible that ST could just eat the cost of the program without having a fare increase for everyone else? It would realistically be 4% of 25% farebox recovery (liberal estimates here), which would be a 1% reduction in revenue (before you factor in new customers that lift brings in). Real world ridership could suddenly drop enough to reduce revenue by 1%, and that probably wouldn’t affect operations at all. I don’t get why adding Lift without a general fare increase is not on the table, especially given the fact that a fare increase can be a huge deterrent to general ridership as well.

    1. It’s not LIFT in a vacuum of otherwise static fares and expenses. Fares have to go up anyway, if not now then within the next couple years. To keep fare recovery within its target percentage window; to deal with rising healthcare costs, materials, and inflation; and because the fare has not risen in a long time so it’s now behind Metro’s and CT’s fares for equivalent service.

      In Metro’s case, LIFT was partly because the regular fare had reached a level where poor people couldn’t afford it, so there would likely be a public revoit if it went higher without a poor people’s discount. But the fare has to go up for these farebox recovery and expense reasons, so therefore they had to establish LIFT. With ST the issue is not as acute because it has more reserves and it doesn’t provide tons of local service that the poor mostly ride, so LIFT is more an issue of fair fare fairness and simplicity across agencies and modes rather than something ST has to do for its own survival.

      1. Fuel prices are the lowest they have ever been. Nothing about driving is expensive right now. Inflation is as close to zero, and maybe negative if you account for fuel costs. There really isn’t any justification for a general fare increase to fund this. It is a tax on bus riders to provide a welfare benefit. It should be funded from general revenues not by a fare increase.

  12. Just throw my voice in in favor of this — for simplicity if nothing else. Your fare structure is *waaaay* too complicated in Puget Sound, and this would be a step towards simplifying it.

    Honestly, there should be a joint fare-setting board which sets fares for Metro, ST, Pierce Transit, and Community Transit simultaneously, with a list of coordination (“these fares must match”) requirements.

    1. For simplicity – do Lift for everyone, across all agencies. Creating a new category for 4% of riders and dong nothing for anyone else does not create simplicity and certainly not for riders who have a choice. In fact, you’re raising fares on them and increasing complexity. Right now, at least off peak Metro and ST are both $2.50.

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