Happy New Year!
Today, Thurston County Intercity Transit is embarking on a five-year pilot program to run without fares. That means both their fixed-route buses and paratransit (which, by federal law, cannot charge more than twice the fixed-route fare) will be free.
This experiment is not a dive off the ideological deep end, but, rather, the result of using proper performance metrics. From IT’s fare page:
Fares account for less than 2 percent of our net revenue. After considering the capital and operational costs of a new system, the difference is negligible. The opportunity to offer faster service, increase ridership, improved access and equity is a far better investment.
It seems that Intercity Transit was following my advice to use the proper performance metric — net fare revenue — or that that performance metric is so obvious that many wise minds think alike. (I’m not necessarily counting myself as one of the wise guys.)
King County Metro continues to base fare policy on the much less useful datapoint of gross fare revenue.
Sans the more useful datapoint of net fare revenue, we don’t know how much net value the whole exercise of collecting fares is bringing in, after accounting for:
- the enormous costs of buses idling (both in fiscal terms and in carbon footprint) while passengers fumble change or figure out how to tap the ORCA reader, instead of just boarding at all doors;
- how much is spent on farebox maintenance and capital replacement;
- how much is spent in staff time and contractor time handling fare sales and service;
- how much is spent in staff time for cash handling.
Beyond the fiscally measurable minuses in computing net fare revenue, there are also costs to riders’ time, the time of car drivers stuck behind idling buses, the carbon footprint of said idling cars, and the carbon footprint from riders diverted into taking trips by car because the buses are too stooooop-and-go to compete.
There may be other reasons to keep fares as a rationing tool if projected increased ridership would overwhelm the existing fleet and Metro’s ability to add more drivers, buses, and base space. Overwhelming the system with free riders could also delay the day when Metro’s fleet is all electric, plugging into power sourced from windmills and solar arrays. As it is, Metro is probably already missing the deadline when humanity’s 1.5-degree-Celsius-of-increase carbon budget runs out. Still, it seems intuitive that having more passengers on diesel buses delayed from retirement is better than having a lot more people continuing to drive used clunkers with the worst emissions per mile.
I am not a fan of sales tax, but if given the opportunity to simply raise the sales tax enough to fund Metro’s projected service needs based on induced demand of free ridership, and cease fare collection, I would be sorely tempted to take the sales tax pill. In general, there is no more inefficient, counterproductive, or regressive way to fund bus service than to place fareboxes at the front door.
That said, forgoing the income from the ORCA Business Passport program, which amounted to $80 million for Metro in 2018 (gross) and $136 million for all agencies combined, would mean losing a revenue stream from major employers who can clearly afford to pay. Nor is it politically safe to depend so much on one revenue source. However, when sales tax revenue plummets, so does ridership and fare revenue. Fare collection has not been a stabilizing force for Metro’s budget during recessions.
If only we could keep that revenue stream from major employers without the major inconvenience of fareboxes…
Planning for the future is difficult. Starting to use the proper metric of net fare revenue when planning fare policy is easy. If Thurston County could get their metrics straight, so can King County.