King County Council’s Transportation, Economy and Environment Committee quickly approved Metro’s fare simplification proposal that would eliminate zones and peak-rates — establishing a flat rate of $2.75. But the committee hesitated on a proposal to reduce card fees for adult and youth passengers from $5 to $3, delaying action until the next meeting.
Metro already waives the card fee for ORCA LIFT riders and proposed the eliminations of card fees for Regional Reduced Fare Permits, which the committee approved Tuesday.
But, Metro recommends continuing to charge card fees to adult and youth passengers, saying “the agency needs to balance discounts with service” and “customers have not identified card fees as a significant barrier.”
According to Metro, each card costs $8 to issue, which includes $2.50 in card costs plus tax, credit card fees and staff time to process the card and handle the sale.
Seven transit agencies use the ORCA card, and currently, the ORCA Joint Board, which is charged with setting system-wide policies, is in the process of establishing new card fees. The regional consensus has formed around the $3 charge for card fees for adult and youth riders, but Metro does have the option of setting its own card fees.
Metro estimates a $3 card fee would result in roughly a $700,000 a year loss in revenue for the agency while eliminating the card fee entirely would cost the agency $1.67 million.
Chair of the committee Councilmember Rod Dembowski proposed tabling the decision regarding card fees, calling the $3 proposed card fee “a compromise.”
“What is the best way to lower barriers and get people into the system?” he questioned. “Is it to reduce the fee from $5 to $3? Is that an effective tool if those are the goals?”
“From my sense, I’m not seeing a compelling reason to do that, and the impact to the transit division is about $700,000 a year,” Dembowski said. “I think Metro sees some good uses of those dollars.”
Agreeing, Councilmember Kathy Lambert added, “To me, $1.67 million (referring to revenue if the $5 fee is kept) is a lot of bus service hours that will help everybody.”
“For me, getting people more service is the number one thing,” she added.
According to Scott Gutierrez, Metro spokesperson, currently “Metro uses card fee revenue to partially offset the costs of the cards and the administrative services needed to provide them to customers.”
“The $700,000 in question would be a reduction in revenue if Metro reduced ORCA card fees from $5 to $3 per card (at $5 per card, total revenue is about $1.67 million),” he wrote in an email. “The Council could direct Metro to use any amount of that revenue to do other things, such as add transit service. However, the cost of ORCA cards and administration would remain.”
Dembowski said it might make sense to keep the card fee at $5 and dedicate resources to increasing ORCA promotion.
To help more people access the benefits of public transportation, Gutierrez said, “Metro is considering in coordination with the Council whether investing in things such as more community outreach, education and promotion of transit and ORCA makes sense, rather than reducing card fees.”
The committee also passed a resolution recommending increased funding for the Human Services Ticket program, by $400,000, bringing the total to $4 million per year.
Councilmember Jeanne Kohl-Welles voiced concerned about the efficiency of the program, saying she had heard that riders using these tickets often use one bus ticket to travel to a different human services agency to get another ticket. Kohl-Welles proposed looking into integrating these tickets into the ORCA system instead of these agencies using paper tickets. Leah Krekel-Zoppi, from council staff, said Metro was looking into a very low-income ORCA card pilot program.
This is frustrating. If I go to LA, I pay $1 for a card. Tallinn Estonia was only 2 Euro. I’ve even gotten paper tickets with RFID capability for no extra fee in many cities in Europe. $5 is a lot. And how does it cost $8 to issue a card? ORCA and its agencies have to be doing something wrong for to cost that much.
Also, this subsidy discussion is ignoring boarding speed improvements. If Metro service costs >$150/hour to operate, reducing cash payments could easily save >$1.67 million per year.
Good point about speed improvements. Metro needs to at least quantify this rather than pretending it’s zero. County councilmembers reading this, we need you to demand this of Metro. When the Rider Free Area was eliminated there was much debate about how much it would slow down buses downtown, and there was a study to quantify it and mitigate it. This is the reverse situation: we’re talking about freeing up bus hours to get more frequent service for free.That’s a substantial benefit which needs to be weighed directly against eliminating the card fee.
And under ORCA outreach, put more TVMs in more places. In cities with ubiquidous subways there’s always a train station nearby to get a card at, but we have lots of areas far from trains. How about one TVM in every urban village? That would be a nice goal, and they’d be distributed more like ATMs.
As a Portlander who visits Seattle maybe once or twice a year, I have yet to buy an ORCA for this reason. I have Oyster, Clipper, and DC Metro cards at home. You guys really need to lower your barriers to entry.
What about Transit GO Tickets?
http://kingcounty.gov/depts/transportation/metro/fares-orca/transit-go-ticket.aspx
That seems more convenient. No options for day passes, though?
You have an Oyster, so you’re willing to pay at least $6.50 for a card.
On an Oyster, the Initial UKP 5 is paid fare, and, at least in principle, refundable: the Oyster itself is free.
The app offers day passes specific to Link, Sounder, and the Streetcars. But there are no interagency transfers or passes available on the app, so you’ll have to wait for Next Generation ORCA coming in 2021.
What William Aitken said. In *sane* systems the card is *always* free. Often you have to put a minimum amount of fare on the card. Sometimes there’s a deposit which is refundable by turning the card back in. But the card is, per se, free.
Drew, Maybe this question will be On Topic because I support Estonian RFID paper tickets since I only buy paper ones for LINK because it doesn’t cost me $124 if I tap one wrong. Though maybe mis-tapping an RFID ticket will cost me $248 if it’s folded in half.
Question is: Did you get to ride on that great Estonian hydrofoil I saw in Helsinki harbor, and would like to be liberated from I-5 by a fleet of them roaring up the Sound between Olympia and Everett, with stop at Colman Dock? Jet-boats aren’t Distance Based, are they?
Mark
I’m surprised the Council isn’t more interested in why the staff cost to process a card is (presumably) over half the cost of providing one.
Some napkin math:
Card cost: $2.50
Tax (10%): $0.25
Credit card fees: $1.25 (I have no idea what these are, but $1 + 10% seems a generous upper bound and makes the math easy)
Total : $4.00
That leaves $4 of the $8 cost as “administrative services,” which seems excessive. Drop that by $2 and there’s your budget-neutral way to reduce card cost to $3.
I think I see what’s going on here – everyone is discussing the $8 figure as if it’s a marginal cost, which it’s not because the $8 figure includes fixed administrative costs. (It’s not clear to me from the staff reports if the fixed costs include the ORCA website, vending machines, etc. – they discuss a $100k one-time cost for reprogramming a new card fee, so I’d assume it does.)
eg, if you go to an ORCA card vending machine and purchase an ORCA card, metro isn’t necessarily going to incur a $3 loss on that sale.
Interestingly, if Metro gets their way and everyone treats ORCA cards as having value (vs being disposable), and nobody ever loses an ORCA card, the per-card average cost figure becomes much worse because of the fixed costs as the diseconomy of scale kicks in.
It’s similar to how Seattle per-gallon water/sewer costs are so astronomically high – conservation doesn’t reduce many of the fixed costs, so the per-unit price increases.
One other interesting thing that Metro mentions is that 77% of ORCA purchases are made by businesses, so they “would accrue a much greater benefit than individual customers.” Assuming that the group buys are some of the most efficient ways to obtain ORCA cards, and assuming that the companies pay the standard $5 fee each, it’s quite possible that business purchases are breaking even and maybe even subsidizing other ORCA costs?
It took a while to find the correct docs for the ORCA cost decrease (Motion 2017-0353), they’re available here: http://mkcclegisearch.kingcounty.gov/LegislationDetail.aspx?ID=3138000&GUID=1F0D6219-393B-40E5-B2BB-544C308B3002&Options=&Search=
“Customers have not identified card fees as a significant barrier.”
Sure, but many customers are also choosing not to buy them. Reduce the cost and give people an incentive to use the cards and you might get better results than spending more service dollars on outreach and education.
Good point. Customers think it’s better for them individually to pay with cash and use paper transfers, but it’s Metro’s responsibility implement what’s better for them collectively. Because if Metro doesn’t, nobody else can.
Verbatim from NPR interview with millionaire pork farmer of the type that Biblical Divinity says should be turned into swine themselves, in punishment for treating their poor pigs so horribly.
Reporter inquired about a girl pig spending her life in a cage where she couldn’t even turn around. Owner’s statement? “Well, she’s never complained.” Explains who created current Zero Tolerance fare system.
Man of few words, isn’t he?
MD
Customers may still identify card fees as a barrier by contacting their county councilmembers.
My point is more that many people who may be able to pay $5 for the card are choosing not to because they don’t see $5 worth of benefits from it. Lowering the card fee could change that calculus, as would a small ORCA fare discount / cash surcharge, including some fare value ($5?) on the card at purchase, etc. As it is, we’re asking people to pay $5 for the privilege of paying more money, with the only incentive being that they don’t have to carry cash around. For infrequent riders that probably doesn’t seem very appealing.
As a customer from outside the county, how do I notify the council that with current card fees, *visitors* will never buy an ORCA card and will pay cash? I have no council representatives.
US$3 flat rate cash fare, US$3 card fee. Seem a fairly simple trade-off.
Agreed.
+3
I’m surprised to hear that the cost to Metro is $8 per card and they actually lose money on each card! It would seem to be in Metro’s best interest to have an alternative for regular riders and visitors.
I just spent over $90 to get my driver’s license transferred to WA. And that’s for a non enhanced license. There’s gotta be a way to incorporate ORCA fares into a driver’s license, like the way UW does it with U-Pass/Husky Cards. As mentioned in other recent threads, this is something I already *have to* carry with me everywhere I go. Actually, all WA transit agencies could then be required to be compatible. Of course, that would involve coordination on transit at the State level…good luck, I suppose.
Another possibility: mobile QR-code based payments like many parking garages are adapting. A bonus is that “tapping on and tapping off” on trains can then be accomplished by tapping on your phone. With GPS they would know which station. Also something I carry with me everywhere which “usually” has enough battery charge to make it for the evening commute. Issue: I still don’t get cell signal (Sprint) in the tunnel.
I think merging it with the license would be a very bad idea. I keep my ORCA card in a completely different place than my driver’s license (with my debit card, because I use both daily), and while I may be in a minority for that, I doubt I’m in a minority of not wanting to constantly risk losing my driver’s license because it has to be in a lot more accessible (and consequently easier to remove/lose) place.
If Metro is losing money on the ORCA card, they should go back to magnetic swipe cards, which do not lose money. Oy.
$8 to issue a $2.50 card????? The problem is in the $5.50 between the cost of the card and total cost to issue a card. If part of the cost is a credit card transaction fee, add a credit card transaction fee as an optional fee for people paying with plastic – make it transparent. Seems like Metro needs an employee from private sector retail to manage the transaction cost. Imagine how many more cards would be sold at the airport if the cost was reduced from $5 to $3, especially among travelers only in town for a few days.
I’m not sure if $8 is the cost for cards distributed through the regular process, or the average when accounting for all the tabling and other outreach programs. It might be useful to specify the cost per card for the two separate processes.
General question with some ugly personal specifics in the not-very-far background:
Have spent much of my life in what’s become regional transit here, with some pretty deep involvement at a really basic level with King County Metro and its predecessor.
Compared to many other cities, Seattle and King County government are free from corruption, stupidity, and alcoholism.
While their particular political approach is currently near-death on the ropes in a fight that any decent ref would have called years ago, the people attending and chairing the meetings I’ve been attending for years are capable of some excellent governing.
So a seriously non-sarcastic question. Why so invariably does their reasoning lead them to complicated conclusions that show so little understanding of precisely the world in which the average transit passenger feels, reasons, thinks,sees, and moves?
And worse, while their general personal outlook on life seems to personify decency and reasonable compromise, why do they fight so tenaciously in defense of results that clearly are doing their transit system and its passengers such a world of damage?
Sweden has air raid shelters for subway stations, universal military conscription, and actual plans for war with Russia on Swedish soil if it’s forced on them. Also from memeville, the press gets a lot wrong about what hostages really do to save their own lives. So forgive “Stockholm Syndrome reference.
But hope I’m not the only one who cares enough to know: Who’s got the Sound Transit Board’s and the King County Council’s relatives, how much ransom do they want, and when General Mattis escapes, what can we do to help him save them?
Just curious.
Mark
We seem to be stuck in a loop here:
1) The cards cost too much.
2) We don’t want to charge extra to use cash, because the cards cost too much.
3) There is no incentive to use the card, because they are expensive, and it costs the same just to use cash.
4) Cash payments cost the agencies a lot, both on the bus and at the other end.
5) We could make the card cheaper, but that would cost the agencies too much.
6) Back to the top.
We need to bite the bullet, and charge less for the card, and more to ride with cash. As mentioned above, 3 bucks for both is about right. If anything, that is still too much (why are our cards so expensive?).
3 bucks is still too much. “Free” is correct, but “$1 refundable upon return of card” is fine too. But 3 bucks is better than 5.
OK, so how about changing card policies instead? The Vancouver BC card costs C$6 but the balance is allowed to go negative up to that value.
I was in Houston visiting and they have a Q card. You can pay cash when you board, or on some of the larger buses, there is a machine onboard where you can reload your Q card. The Q card was free and I purchased from a drug store.
Would really be curious to know what the cost drivers to the ORCA cards really are.
I’m surprised neither the council committee nor the commentariat gave any attention to the youth card fee.
With no LIFT card fee (for low-income adults 19-64), soon no RRFP fee (for riders 65+ and riders with disabilities), and if the county eliminates the youth card fee, that ought to eliminate the social justice arguments against raising the regular cash fare. It doesn’t eliminate the barrier completely, but those of means who have been paying with cash should move, pretty much en masse, to using ORCA, once the incentive is in place. Soon, most cash payment would be by tourists who don’t come through the airport, and would be in dollar bills. That’s definitely worth roughly $100,000 a year to eliminate the youth card fee. The extra quarter of revenue from those still paying with cash ought to easily cover that amount. The operational savings from near-universal non-cash payment would then be free-and-clear money for more service.
I’d be fine with keeping the $5 fee on the regular cards *if* the council committed to raising the cash fare in Phase I, II, or III of the fare restructure project. If groups still say the card fee needs to go first, that would still then be just $1.6 million that frees up many millions of service dollars through efficiency, and draws more ridership as buses become a faster option throughout the system.
The more I think about it, the more curious I get about what administrative costs Metro is including in the ORCA cost calculations.
How much of those fees are directly related to the cards themselves, and how much is due to operating a cross-region stored value system? Is ORCA acceptance hardware included in the costs? The websites?
ie, as a thought experiment, what if the physical ORCA card entirely disappeared, and people were identified through a magical biometric system (eg, no additional hardware costs – it just works, but without the card.) You’re still loading accounts with value, creating new accounts, running customer service, maybe dealing with ticketing machines, etc.
I have a hard time believing that the per-account cost would entirely zero out because the physical cards are gone. Are there maybe cross-agency cost recovery issues here which are just masquerading as card issuance costs?
Who is the card supplier/maker?
Metro sells 350,000 ORCA cards a year?
Come on, idiot Metro board members. Card fees are a significant barrier period!
They completely screw up the incentive to use the card at all. And if the card is the only option, they create a strong incentive to not use public transit at all!
The last time I was in Chicago I paid cash on all the buses and subways. Can you guess why?
The next time I’m in Seattle I will pay cash on all the buses and trains. Can you guess why?