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Metro's Proposed Fare Increases II

Tony Dziepak
March 2004

I included the following information in a letter, regarding proposed fare increase in FY2004, to Mr. Harold M. Bartlett, Secretary and Chief of Staff, Washington Metropolitan Area Transit Authority, 600 5TH ST NW, Washington, DC 20001. I dropped the idea of the 25-cent divisibility, but I suggested a more sophisticated curve for the fare rates.

Dear Mr. Bartlett:

I regret that I cannot attend one of the public hearings, but I would like to convey my recommendations to you regarding the proposed Metrorail fare adjustments as described in Docket #B04-2.

MY SUGGESTION:

1. Suggested Metrorail Peak Fare Changes:

1.a. Reduce the base boarding charge to $1.00, but charge for mileage for all trip lengths.

1.b. Restructure the mileage charge as follows: $0.24/mile for miles 0.01- 5.00 $0.18/mile for miles 5.01-10.00 $0.12/mile for miles 10.01-15.00 $0.06/mile for miles 15.01-20.00 $0.00/mile for miles 20.01 and greater.

This would result in a maximum peak-period fare of $4.00.

2. Suggested Metrorail Off-Peak Fare Changes

2.a. Reduce the base boarding charge to $1.00, but charge for mileage for all trip lengths.

2.b. The mileage charge shall be half of the peak-period mileage charge, with the same travel increments: $0.12/mile for miles 0.01- 5.00 $0.09/mile for miles 5.01-10.00 $0.06/mile for miles 10.01-15.00 $0.03/mile for miles 15.01-20.00 $0.00/mile for miles 20.01 and greater.

This would result in a maximum off-peak fare of $2.50.

THE EXPLANATION:

Please look at the graph (Attached Excel file) of the current fare rates by trip mileage. The graph is full of kinks, which means that fares are not nearly as related to trip distance as they could be. The proposed rate increases do nothing to address this unfairness.

Metrorail passengers overpay when their trip length is 0-1 miles or 13-17 miles. Passengers underpay when their trip length is 2-9 miles or greater than 20 miles. Only when trip length is 1-2 miles, 9-13 miles, or 17-20 miles do passengers pay about the right amount.

My suggestion of a restructuring of the mileage charge results in a smoother curve.

The off-peak fare structure, while not impacting revenue as much, actually has a greater impact in terms of fairness.

The system of three off-peak fare tiers was originally designed to make it easy for visitors to buy single farecards with a minimum hassle of using or receiving change. The fares were $1.00, $1.50, and $2.00. However, now that they have increased to amounts not divisible by a dollar, this benefit no longer exists. In addition, with the possible introduction of annual fare indexing, there is no hope of ever returning to dollar-divisible fares for any length of time.

While this advantage of the tier system no longer exists, the disadvantage persists--the tier system exacerbates the unfairness of the fares. Passengers at the top end of the tiers underpay, and those at the bottom range of the tier overpay.

Please look at the graph of off-peak fares by trip distance (Attached Excel file, second spreadsheet). Passengers overpay when their trip distance is 0-2 miles, 7-8 miles, and 10-13 miles. Passengers underpay when their trip distance is 4-7 miles, 9-10 miles, and 17 miles or greater. Passengers pay about the right amount only when their trip distance is 2-4 miles, 8-9 miles, or 13-17 miles.

Because of this, the off-peak tier system has no advantage over simply charging mileage at half the peak rate, which is my suggestion.

My suggested formulas are compatible with indexing. When fares are adjusted, the base fare and mileage can all be raised by the same proportions. This maintains the ratios of base fare, maximum off-peak fare, and maximum peak fare as 1:2.5:4.

Another suggestion: Extending parking collection to station closing might have serious adverse consequenses--especially Friday night. It could directly lead to more downtown late-night traffic congestion, parking difficulties, and drunk driving, accidents, and deaths. Can I suggest extending it only to 11pm? I believe 11pm will capture almost all of the commuters while avoiding the undesired effects.

I hope you will consider my suggestions. This would bring both fairness and elegant sensibility to the fare structure. Thank you for your consideration.

Sincerely,

Anthony Dziepak (Eeconomist, Federal Aviation Administration)

Virginia Polytechnic Institute and State University Department of Economics at Virginia Tech Send an email to Tony Dziepak

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