Fair Fare Policies: Pricing Policies that Benefit Transit-Dependent Riders

Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 167)

Abstract

Budget shortfalls resulting from the recent recession have prompted some US transit agencies to increase passenger fares for mass transit. Given that the top 20 US agencies, representing 83% of transit trips, either already have or plan to implement a smart card fare collection system and are looking to increase farebox revenue, we propose introducing a “Best Fare” alongside the next fare increase. A “Best Fare” can guarantee that riders will pay no more for incremental trips than they would if they purchased a discounted pass covering the equivalent time period. This policy supports transit-dependent riders for whom prepayment for multiple trips to receive the associated discount may present a financial hardship. We apply this concept in a nonlinear Fair Fare Policy (FFP) model using cross-elasticities between fare products to determine the revenue from a fare increase that is and is not coupled with a Best Fare. We provide agency decision makers a case study of how one agency could increase revenue and reduce ridership loss using a Best Fare alongside a fare increase.

Keywords

Europe Transportation Income Shrinkage Gasoline 

Notes

Disclaimer

The opinions and conclusions expressed in the chapter are those of the authors and do not necessarily reflect the views or policy of C2HM Hill or Booz Allen Hamilton or the University of Texas, Arlington.

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Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.CH2MHILLAtlantaUSA
  2. 2.University of TexasArlingtonUSA

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