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.

39 Replies to “Intercity Transit rolls out fare freedom, and schools King County on performance metrics”

  1. Generally speaking it doesn’t make sense to collect fares if you have a small agency, and it makes sense to collect fares if you have a big one. To quote some lines from this essay: https://pedestrianobservations.com/2019/07/18/free-public-transportation/:

    In all of these cities, if there is money for fare elimination, there is money for further improvements in service.

    The above discussion centers where the vast majority of public transportation takes place – that is, in cities with serious public transportation systems. The argument changes completely in smaller cities, which run the occasional bus but not at the required speed, coverage, or frequency for it to count as a real public transport network.

    Alon’s use of the word “real” in this context is silly, in my opinion (worse than the misuse of “literal” or the overuse of “awesome”) but you get the idea. If transit represents a substantial share of the ridership, then it is “real”. If not, then it is quite likely you are better off without fare collection. Seattle, on the other hand, has a very large transit system — we have a “real” transit system. Like bigger cities, we have better uses for the money.

    1. So, I am trying to move the needle from overgeneralization to better data-informed policy.

      Obviously, Intercity Transit is not Island Transit.

      IT’s ridership is roughly 4 million per year, putting it closer to Pierce Transit’s 10 millionish per year.

      PT only gets 8% of its funding from gross fare revenue. PT may be a better example where the net fare revenue ends up being so small that collecting fares has far more drawbacks than pluses.

      That said, I’d be fearful of the motives of current PT leadership if they suddenly moved to fare-free. I’ve seen fare freedom become an excuse to legislatively install a totally new board structure and membership, raid the sales tax for other uses once the board no longer objects, and then enact austerity on transit service, in a much more progressive setting than Pierce County.

    2. Intercity Transit is surprisingly large for a “small agency”, but Olympia is a college town, and commuting to the government buildings or to the ST district are probably secondary. And if fares raise only 2% of expenses, then what’s the difference?

      Metro is a very different situation, and it’s not just because of the size of the cities. Metro’s district has enough homeless people and minority communities that people get all out of whack about assumed social problems of letting everyone ride free. In Olympia and Pierce County, those factors are so small that they don’t enter the debate much. Long-term we should put the people and non-car mobility first and there’s a good argument for free transit just like there is for free libraries, but short-term Metro has more urgent issues (lack of comprehensive service) and those social factors need to be addressed (by giving everyone housing and allowing the benefits of diversity to percolate more).

      Island Transit was the first with free fares, Intercity Transit can be the second. Eventually Pierce Transit can be the third if it likes, and then we can talk about Metro. Except that Pierce Transit is even further behind on comprehensive service than Metro is, and we mustn’t let anything get in the way of filling in the frequency. That’s the best way to get the low-hanging fruit of latent ridership demand and get the most people out of their cars.

      1. Olympia has a lot of homeless folks — especially young ones. But most of them are white, so your point is well taken. Politics is everything (which is Brent’s point).

      2. I haven’t lived in Pierce County since 1991, so this may have changed but I doubt it: There are plenty of minorities in Pierce County, probably more by percentage than King County, especially if you only count bus riders. I will admit the homeless situation probably isn’t as huge in Pierce as the police are much less tolerant, however.

    3. It’s not just an income for number of riders situation. Taking cash also means a lot of work going into handling, counting, and auditing those that are handling and counting to verify nobody is pocketing any of it.

      Large agencies have enough people that staff to do this represent a small minority of total staffing. The % that goes to administration gets larger with small agencies.

      There is also the FTA grants. They have (under normal federal administrations) usually been higher for agencies that don’t charge a fare. In the case of Corvallis, OR this made it silly to charge a fare because the federal funds more than made up the difference.

  2. Brent,
    I admire your zeal on going fare free. Here’s one of the arguments that’s going to be used against it – paratransit must have a fare.
    What? Paratransit must have a fare.
    Let me explain: Paratransit is basically a taxi service for the severely disabled. It costs many, many times more per rider than fixed route. Without some rationing – thank you – the service will be oversubscribed and collapse. That’s reason #1 why Skagit Transit is going to a paratransit fare this July.
    With the current federal regulations requiring paratransit only be double the fixed route fare and anything times zero will always equal zero… there’s the rub.
    THAT SAID, I would like to see some serious, genuine effort to update federal paratransit regulations in the next few years.
    Very thoughtfully;
    JOE

    1. I’m anything but zealous about going fare-free. I just want transit agencies to be more transparent about how much fare collection improves the budget. Metro’s fare collection certainly does not enable 25% more service over if no fares were collected. I’d like to know what the real number is. Then, Metro could either decide going fare-free makes economical sense, or that fare collection really is worth it. Sans the transparent net fare recovery numbers being made available to the public, I’m agnostic on whether Metro really should be collecting fares.

    2. I also have minimal interest in lobbying the federal government for a fare policy change that will be opposed by a lot of pro-transit lobby groups, as opposed to, say, lobbying for much more federal transit funding, and for Amtrak to have more ROW priority to provide dependable intercity transit that can compete with the climate-killing airline industry (along with my dream of being allowed to sit or stand on SRO Amtrak trains).

      1. Thanks Brent for your thoughtful answers.
        a) I am disappointed there is more interest in an arguably broken status quo on paratransit policy – for another thread – than in fixing it.
        b) That said, I would like the feds to chip in more for transit and get Amtrak top priority. I recently did a Twittah thread why the status quo of intercity transit (SEA-OAK) just doesn’t work for most travelers.
        c) Thanks for clarifying your thoughts on KCM & fare collection. Keep on it!

  3. I remember the excruciatingly slow buses on Third Avenue when Downtown Seattle was a free-fare zone. The free-fare zone not only did not increase travel times but the buses seemed even slower than today! Much of that was because there were lots of riders making very short trips on the system.

    If free-fare travel is an objective, I think we should introduce a fleet of easy-on and easy-off shuttle vehicles for free short-distance trips to longer-distance service, but rely on passes and electronic fare programs for those trips on longer routes. It eliminates tracking of most transfers and fits better with our emerging Link + RapidRide network.

    1. I find this really surprising. The ride free area slowed down buses in downtown Seattle? A major argument for the RFA was that it would help buses move through downtown quicker, because both ons and offs would not need to pay at all within the RFA, so there would be no taps or change fumbling at all within downtown. All bus doors could be used for both entering and exiting, encompassing the benefits of off-board payment (which wouldn’t be necessary). In fact, leading up to the end of the RFA, there was a big worry that it would cripple speeds in the DSTT since everyone boarding the bus there would now have to pay when they didn’t before (it seems not to have been that big of a deal in hindsight).

      I would think there would have to be a very large increase ridership to completely overcome the savings of fare free, all-door boarding in the affected area. But that seems like not the worst problem to have.

    2. Given that there are already buses going up and down 3rd Ave. every minute, at least, adding yet another route up and down 3rd Ave., whose sole purpose is to be free, is not a very efficient use of service money. In practice, most transit riders downtown already have either passes or transfer credit (how else did they get downtown to begin with), so they’re just going to take the first bus that comes, not wait up to 15 minute for the free shuttle. Even those that don’t, many will prefer to just pay the fare, rather than wait.

      If you really want a free option for traversing downtown, a cheaper solution would be to leverage Link. Since it’s already tap-on-tap-off, you could just set the fare for intra-downtown trips to zero and not conduct fare inspections within downtown. But, I still think this is making the system more complicated, and costs money that would be better spent running the buses and trains more frequently.

      1. As it turns out, I made a page 2 post about exactly this: https://seattletransitblog.com/2019/04/06/rfa-revival-make-link-free-in-the-tunnel/

        I do think it’s a good idea. As for the complexity, I think with Link already having distance-based fares, it’s a small step to make trips within a set of stations free. It could be ticket-free, fare enforcement-free within the DSTT, and it’s easy enough to add an automatic announcement before Westlake and IDS that says something like “you must deboard here if you have not paid a fare.”

        As it pertains to this, it would help remove a lot of intra-downtown load that could slow down buses city (and county) wide, which could be moved much more efficiently with trains.

    3. This is a classic example of “those guys made the bus slow”. I’m sure there is a scientific name for this phenomenon, but let me just use this for now. Anecdotally, when “those guys” seem to make everything worse, there is a tendency to blame “those guys”. But when they actually do the science — when they actually study the matter at hand — they find that off board payment actually saves a considerable amount of time, even when there are plenty of “those guys”. There are few places in this country with more of “those guys” than San Fransisco. It is warm, it is nice, it is fun, it is forgiving. Whether you came there trying to make it rich, or trying to just make it, it is attractive. Yet despite all that — despite huge numbers of people perfectly willing to gum up the works — the buses ran a lot faster when they stopped collecting the fares on board.

      The free-fare zone not only did not increase travel times but the buses seemed even slower than today

      Yes, which suggest the problem is not the system, but your perception.

      1. The “those guys” I tend to encounter tend to follow into one of two categories. 1) Those that need lots of time and/or the ramp deployed to board the bus. 2) Those that don’t know where they’re going and want assistance from the bus driver.

        These are the situations where a single person can end up delaying a bus by multiple minutes. By contrast, the impact of fare payer making a reasonable effort to be quick ranges from 3 seconds (Orca) to 20 seconds (cash).

      2. The ride free area sped up travel time. When it ended, the DSTT backed up significantly more. ST and Metro did testing and instituted some countermeasures like grouping the buses and having offboard fare assistants to scan ORCA cards but it wasn’t enough to mitigate it completely.

        The RFA had to go because it was non-intuitive and confusing, especially after it stopped being 24 hours so the payment location changed at 7pm, and it was requiring an ever-larger subsidy that Seattle wasn’t keeping up with, but it did not slow down boarding, it sped it up by dispersing the payments to non-downtown stops. The confusion did cause some delays when people didn’t understand the policy and drivers had to explain it and people had to exit the front door, but the explaining wasn’t that long overall and the payment was outside downtown where there weren’t a lot of people waiting to board. Most drivers covered the farebox and told people “Pay as you leave” as they walked past.

      3. Because Downtown Seattle was the point with the heaviest loads of passengers, getting riders on along Third Avenue took more time in the free-fare zone when a bus had lots of standing riders (which was often throughout the day). It was occasionally delayed further from people carrying roller carts onto the bus; the driver would obediently lower the ramp for a rider with a cart to board, and that rider would then hop off at the next stop and the ramp operation would be required again. Meanwhile, riders going several miles were slowed for 3-5 minutes because of these very short distance riders.

        It probably did not happen in the tunnel as much because it took effort for people with carts to get to the platform.

        I mention this as a note that we’ve had free fare transit in limited form already. There are often unintended consequences like slower bus speeds even though logic suggests that they should be faster. I’d rather see us instead encourage pass use with subsidies for those with limitations. It isn’t because I’m demonizing a demographic group, but instead I’m pointing out that free-fares in the real world can end up making travel more difficult for others trying to use transit. It’s going to have problems that emerge. It’s just reality, anyone who thinks otherwise is living in a fantasy world.

      4. While I do believe the ride free area did speed up buses within downtown, it came at the expense of slowing down buses everywhere else. It just pushes the fare payment delays from downtown stops to stops elsewhere in the city. Worse, pay-as-you-exit means you can only exit through the front door, so the bus has to sit there while people in the back squeeze through to the front.

        Worse still, the ride free area downtown significantly slowed down the 44, all the way from the U-district to Ballard, simply because the 44 was thru-routed with the 43.

      5. While I do believe the ride free area did speed up buses within downtown, it came at the expense of slowing down buses everywhere else. It just pushes the fare payment delays from downtown stops to stops elsewhere in the city.

        But that’s not the point. No one is suggesting that we go back to pay as you exit. The point is that off board payment (or no payment) speeds up the buses. That is what I’ve been saying all along, and you clearly agree. The evidence supports that (as Mike wrote) and yet we still see statements like this:

        There are often unintended consequences like slower bus speeds even though logic suggests that they should be faster.

        No, Al, the buses aren’t slower when you eliminate payment, or have off board payment. It might have felt slower when they were crowded and people weren’t paying, but in reality they were faster. The handful of people that decided to board because it was free was more than made up for the vast majority that didn’t have to pay.

      6. asdf2, the ride-free zone was more harmful to the 44 than just slowing it down – it caused serious legibility problems for an E/W route. Which direction was towards downtown? It was even worse when Metro only partially severed the 44 from the 43, because now you had buses with the same signage, some of which started downtown and required pay-as-you-leave while others did not.

      7. “While I do believe the ride free area did speed up buses within downtown, it came at the expense of slowing down buses everywhere else”

        It’s not a 1:1 correspondence. Most of those other locations have only 1-2 people getting on at a time, so the delays aren’t compounded by a backlog of people. It’s like a supermarket checkout line that can absorb spikes when there are 1-2 people waiting but when there are more it quickly becomes overwhelmed.

    4. Tallinn, Estonia enacted free transit a few years ago. Much of the increased ridership came from people who formerly walked relatively short distances.

      Intercity Transit might not see this as much – it doesn’t serve a very dense, walking-centric area – but I think Metro would see this significant if it was fare free.

  4. “If only we could keep that revenue stream from major employers without the major inconvenience of fareboxes.”

    The solution to that is an equivalent tax. It would have to be equal on all employers, so you’d have to do something like broadening the base and lowering the rate, and making sure the smallest companies can afford it, but it could be done if the state allowed it. of course, a lot of things would be possible if the state allowed them, and it would take a new generation of legislators who are willing to do it. In the meantime we’re left with small-scale reforms and trying not to backtrack.

    1. The Vienna model is an interesting one. They have no fare barriers and essentially every resident has a pass so there is minimal fare enforcement. I believe you get a pass from your employer, your school or with your old-age pension, and there may be other categories (e.g., stay at home parents with kids). So the only people who are supposed to pay fares are tourists (the transit equivalent of the hotel and rental car taxes we use to build sports stadia, but for a better reason). A lot of tourists ignore this and take their chances and probably succeed most of the time.

  5. After 40 Years of working for Metro Transit, I have read all of the studies on Fare Free Transit. After World War 2 many Transit Agency financed equipment purchase based on Farebox revenue. By 1960s farebox revenue was covering less and less of the cost of operations. By the Time Metro came into being a lot had changed
    1. Equipment purchases were financed By UMTA 80% Federal 20 % local matching Funds
    2. Metro was directed to recover funds by charging “fares” In the early days it was around 35% as service demands increased the FBRC started to Fall
    3. The old Metro Council did study Fare Free Operations, but the there an opinion by the State Auditor that would require the legislature to Act The Voters were not asked about this itemwhen they approved Metro
    4.In 1980s Fare Free Operations was studied again, I wrote a Paper on this very subject I was supposed go before The Metro Council but…..the Metro Council became divided city vs suburban interest ….finally The Court said Merge or else, then Metro forced into a shotgun wedding with King County Government. Once that happed Metro now had to dance to a different tune….i.e. political decision verses operating decisions.
    5. Fare Free Operations can work by changing some operational policies that make clear how you ride transit ( Read Austin Texas Study )
    The way I understand it….King County Council would have to buy in….but there is the ORCA agreement between all of the Transit Agencies the surround Puget Sound that would also have a part to play plus the Ferry System would to be considered ( Route 118/119 )
    King County Council would likely want to increase the sales tax to pay for FFT i.e. Fare Free Transit to offset revenue loss around 20% currently

      1. Some of the studies were done as research papers by the Federal Government….FTA
        The studies done by metro can found in archives, will be difficult to locate as they are not catalogued. Another source would be minutes from the transit committee meetings from the Metro Council or the King County council
        A lot of information is just filed away in the Washington State Archives …unless you know the box it is in good luck finding the Information
        I.e. not available on line

  6. From viewpoint of a driver, rather than an accountant, seems like we could’ve built more than one ST- on the revenue we wasted trying to get loaded Route 41’s out of Westlake any PM rush, what with the change-fumbling, information discussions, and arguments.

    Our years collecting fares on board coaches in the Downtown Seattle Transit Tunnel ought to carry one lesson: Let fare collection get under the wheels of your vehicles and you might as well have your bus lane piled high with metal safes. For the future, worth whatever it costs to eliminate.

    If you need to charge some fare, universal monthly ORCA-card possession should be all the proof-of-payment anybody needs. Union should take a harder view of inspectors doing accountants’ work than inspectors, and probably Court, already do. Have behavior-poster artists create a sensitive little creature in uniform to enlist children in tap-enforcement on their parents. Nobody is mean enough to want to see the tapmunk cry.

    Everybody have a great New Year. System and country, History’s probably just got us in the “Not Yet Begun To” phase.

    Mark Dublin

    1. The issue of leaving the 41 and 550 in the tunnel was feasible only between last March and now. ST is installing a maintenance turn track for East Link that it says is incompatible with buses in the tunnel. Maybe it could have designed it differently but that’s the issue, not whether we want buses in the tunnel until 2024.

  7. While some fantasize over the possibility of fare-free Metro, consider other impacts basing fare policy on net fare revenue could have.

    Raising the cash fare to $3 could have a significantly positive impact on net fare revenue, even if its impact on gross fare revenue is much smaller. The operational savings that ensue could help the county continue to meet its fare recovery goal (which will have to be lowered to reflect the current difference between gross and net at some point), and potentially enable the county to avoid an increase in the general electronic fare, or enable the county to reduce the youth fare and LIFT fare to $1, or help cover the cost of fare freedom for some no-income recipients of N-month passes.

    Likewise, lowering the youth fare to $1 might end up having a negligible impact on net fare revenue once operational savings are considered. It isn’t happening right now, in part, because the county is stuck on policy based on gross fare revenue, and perhaps because it would lose some subsidy from various other local governments.

    Moreover, consider that if the county is using this phony accounting measure of gross fare revenue as a basis for policy, imagine what hocus pocus the county might be playing with accounting for its carbon footprint. Are we paying for some other entities elsewhere to plant trees that will someday suck CO2 out of the atmosphere to offset today’s emissions? Are we selling other entities the right to pollute? If we can’t get proper performance metrics for something as easy to account for as the transit budget, is the county being honest with its part in ending CO2 emissions in every way possible?

  8. “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.”

    You’re still stuck in the mindset that there isn’t latent demand for transportation and that transportation demand is constant. Even if more people pile onto buses, that doesn’t mean fewer car trips will be taken. For every person that switches from car to bus, there’s another waiting in the wings to take their place. It’s the same fundamental concept behind being unable to build yourself out of congestion (with more lanes on highways). If you buy into that, you cannot also believe that plussing up transit capacity and/or making it more accessible will magically make cars disappear. About the only thing that makes cars disappear is reducing capacity (like when a highway is replaced with a surface street — many of those cars just disappear).

    Comment #1 is spot on. No matter how you slice it, a free fare will mean either 1) reducing service or 2) forfeiting a potential increase in service. That’s the crux of the issue, and that’s not going to change. Leaders just need to make a choice: do we want free fares, or do we want more service? It’s that simple. And that hard.

    1. Adding to this: Metro gets an estimated $160m in annual fare revenue (gross). I doubt the expenses you cite above would total more than $10m/yr, but depending on how you price carbon emissions (which won’t appear in any accounting records), let’s go with $20m/yr. $140m net with a direct operating cost of $110/hr yields 1.2m+ hours of service each year. Metro is somewhere on the order of 3.8m annual hours right now.

      When you start talking about operational efficiencies, it gets real dicey in terms of what you’ll actually be able to save. Shaving a minute or two off a schedule doesn’t necessarily translate to any actual savings in labor costs. There are complexities here that are nigh on impossible to accurately assess. My gut instinct, though, tells me that you won’t save much, if any, in labor costs.

      So that’s what a free fare will cost – roughly 30% of the current system size, either in cuts or in opportunity lost. It’s not peanuts, and the costs you seem to be so concerned with (and raking Metro over the coals for) most likely aren’t all that important given the amount of fare revenue collected.

      I’m not necessarily presenting an argument for or against a free fare. I just think the original article fails to assess the impact/costs it would have.

      1. I’m not necessarily presenting an argument for or against a free fare. I just think the original article fails to assess the impact/costs it would have.

        The point of the article isn’t to advocate for free fare or to make up a back-of-the-napkin calculation for net fare revenue. The point is to ask Metro to calculate net fare revenue, and use that, not gross fare revenue, to guide fare policy. There is a lot more to fare policy than just whether or not to charge fare.

        I admit I have no idea how much it costs to collect fare. And neither does the King County Council. But Metro has some idea. The council should ask.

      2. Perhaps, but I took away an underlying implication that *if* Metro did this, they might come to the same conclusion Intercity did. I’m arguing that the conclusion wouldn’t be the same. With a fare revenue efficiency of probably >80% (net fares over gross fares), I question the incremental value a net fare figure would have over gross fares. Useful to look at, for sure (and I agree that Metro should take a look), but enormously impactful to fare policy in the aggregate? I doubt it. Metro could use it to keep enforcement costs in check, and they could also use cash fare collection efficiency to inform a possible decision to nix the cash option. Beyond that, I can be schooled.

        We also should keep in mind that dwell times increase when buses get packed. For trips that are already packed, a free fare probably only stands to increase efficiency. But for trips where induced ridership causes non-packed buses to become packed, there’s an offset to account for in any assumed efficiency gained from free fares.

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