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The Effect of Fare Reductions on Public Transit Ridership

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The Effect of Fare Reductions on Public Transit Ridership iL THE EFFECT OF FARE REDUCTIONS ON PUBLIC TRANSIT RIDERSHIP John R. Caruolo Roger P. Roess May 1974 PROJECT" REPORT This document was produced as part of a program of Research and Training in Urban Transportation sponsored by UMTA, USDOT. The results and views expressed are the independent products of university research and not necessarily concurred in by UMTA. Prepared for DEPARTMENT OF TRANSPORTATION URBAN MASS TRANSPORTATION ADMINISTRATION RESEARCH AND EDUCATION DIVISION WASHINGTON, D. C. 20 590 1 Of Transportation we Dept. If 3*/ / 0*6 1 MIR a 1976 , I — Library Report No. UMTA-74-6-1 THE EFFECT OF FARE REDUCTIONS ON PUBLIC TRANSIT RIDERSHIP, John R. Caruolo Roger P. Roess - . May 1974 PROJECT REPORT This document was produced as part of a program of Research and Training in Urban Transportation sponsored by UMTA, USDOT. The results and views expressed are the independent products of university research and not necessarily concurred in by UMTA. Prepared for DEPARTMENT OF TRANSPORTATION URBAN MASS TRANSPORTATION ADMINISTRATION RESEARCH AND EDUCATION DIVISION WASHINGTON, D. C. 20 590 NOTICE This document is disseminated under the sponsorship of the Department of Transportation in the interest of information exchange. The United States Government assumes no liability for its contents or use thereof. T*cknicol Report Documentation Page 1. Report Ho. 2. Covtmoml Accrttion No. 3. Rrcipitnt * Cotoloq No. I UMTA-74-6- 1 4. Till* Subtitle 5. Report Do»o The Effect of Fare Reductions on Public May 1974 Transit Ridership 4. Performing Orgont ration Code 8. Performing Organization Report Mo j . Caruol'o, and Roger P. Roess (Advisor) __ f. Performing Organization Nome and Address 10 Wo* Un.t No RAIS) . (T Polytechnic Institute of New York Department of T ransp. Planning & Engineering 11. Coo. roct 0» Gront No. 333 Jay Street, Brooklyn, New York 11201 NY-1 1-0009 13. Type of Report and Period Core'ed 12. Sponsoring Agency Nome end Address Urban Mass Transportation Administration Project Report Research and Education Division 14. Sponsoring Agency Code 15. Supp I omen ter y Notes The results and views expressed are the independent projects of university research and are not necessarily concurred in by UMTA, VI. lillrKI The study was undertaken to determine the effects of various reduced fare programs on transit ridership. A listing of all reduced fare programs in North America is provided. The concept of fare elasticity wa^ defined and determined for the various programs. Empirical evidence was obtained and analyzed from senior citizen programs, reduced base fare programs, free fare programs and promotional programs. It was found that reduced fare programs produce significant ridership increases. Senior citizen transit demand was found to be more elastic than overall ridership demand. Off-peak travel is more elastic than peak hour travel. Even with these significant ridership increases, reduced fare programs result in a revenue loss. These programs have been successful in achieving their particular social and environmental objectives. 17. K«y Wor4t 18. Distribution Stotomonf This document was Transportation, Financing, produced as part of a program of Reduced Fares Research and Training in Urban Trans portation sponsored by UMTA, USDOT, If. Socun fry Clotiil. (of 4»is r opart) 2D. Soointy Ctotftif. (of tbi % pogo) 21- No. of P ago* 22. P-.c. U nclas sified Unclas sified 87 Ftm DOT F 1700.7 d-73) Reproduction of comp I o tod pogo outbortzod * u. S. GOVERNMENT PR! NT TNG OFFICF IP*? *-*04 _ ' - 1 TABLE OF CONTENTS CHAPTER I. INTRODUCTION Purpose of the Study 1 Objectives of Fare Reduction Programs 1 4 CHAPTER Z. LITERATURE REVIEW 7 Transit Fare Elasticities 7 Data Collection 15 CHAPTER 3. SENIOR CITIZEN REDUCED FARE PROGRAMS 17 Los Angeles, California 19 New York City 20 Chicago 21 Philadelphia 22 Miami 22 Milwaukee 23 Madison 23 Baltimore 23 Pittsburgh 24 Minneapolis 25 Detroit 25 Washington, D 0 C. 26 Honolulu 26 Des Moines, Iowa 26 Various Programs Across the U. S. 27 CHAPTER 4 , REDUCED BASE FARE PROGRAMS 29 Atlanta 3 San Diego 34 Cincinnatti 3 5 Boston 35 Denver 36 Louisville 37 Kansas City 37 Tulsa 38 Haddonfield 38 St. Louis 38 New Castle, Pennsylvania 39 CHAPTER 5. FREE FARE PROGRAMS 41 Commerce California 42 Raleigh County, West Virginia 42 Seattle, Washington 43 Amherst, Massachusetts 44 CHAPTER 6. PROMOTIONAL PROGRAMS 45 Boston Massachusetts, "Dime Time" 45 New York City, Sunday Half Fare Program 45 CHAPTER 7. SUMMARY AND CONCLUSIONS 47 APPENDIX 53 Senior Citizen Programs In The United States 54 Senior Citizens Free Transit Programs 66 Free Fare Programs in North America 68 Special Reduced Fares and Procedures 71 Sample Data Request Letter 78 FOOTNOTES 79 BIBLIOGRAPHY 83 VITA 87 \ LIST OF TABLES Table 1. 1: Reduced Base Fare Programs in North America 2 Table 2. 1: Elasticities Of Passenger Travel Demand With Respect To The Component Of Travel Cost 12 Table 2.2; Elasticities Of Passenger Travel Demand With Respect To The Component Of Travel Time 13 Table 3. 1: Costs of Senior Citizen Programs 17 Table 3.2: Elasticities Of Off-Peak Hour Senior Citizen Programs 18 Table 4. 1: Cost Of Reduced Base Fare Programs 29 Table 4.2: Elasticities Of Recent Base Fare Reductions 30 Table 7. 1: Ridership Increases Due To Fare Reduction Programs 47 . \ ' LIST OF FIGURES Figure 1. 1: Transit Trends 4 Figure 3. 1: Increases In Ridership Due To Senior Citizen 19 Fare Reductions Figure 4. 1: Increases In Ridership Due To Reduced Base Fare Programs 31 - 1 CHAPTER I INTRODUCTION In recent years, a growing number of transit systems in the United States have experimented with fare reductions or the elimination of fares completely. These programs have resulted in fares insufficient to support the operating costs of the system and have necessitated subsidies in some form. There are three basic types of reduced fare programs that will be examined in this report: 1) An across the board fare reduction applied to the base fare for all riders in the system. This reduction in fares must be ap- plied over a significant period in time. The reduction may apply over a 24 hour period or may be in effect only during the off-peak hours of the day. A listing of reduced base fare programs in North America is given in Table 1. 1. This listing is not complete as revisions and additions to the list occur periodically; 2) A fare reduction offered to a special population group of the total ridership. This report will examine senior citizen fare reduction pro- grams which have been instituted in every part of the North American con- tinent. Other special population groups that are offered special fares in- clude students, the handicapped, the blind, policemen and uniformed govern- ment employees. Senior citizen programs may also be restricted to the off- peak hours of the day. A table listing the current senior citizen programs in North America is included in the appendix of this report. A listing of special reduced fares and procedures for the blind, handicapped, unemployed and welfare recipients is also available in the appendix; and 3) A fare re- duction limited to a certain route or routes in a transit system. These pro- grams usually deal with downtown shuttle bus loops. The ultimate reduction in transit fares leads to a free or no fare tran- sit system. There have been numerous free fare experiments conducted in the United States in recent years. This report will discuss free fare pro- grams in the context of a type of reduced fare program. PURPOSE OF THE STUDY The purpose of this report is to investigate the effects of reduced fare programs on transit ridership. The report will identify all such pro- grams in the United States and Canada. Information about each program will be provided. The report will then determine whether the fare reductions have satisfied their particular objectives. Empirical results from fare re- duction programs will be analyzed to determine whether fare reductions have produced significant ridership increases and whether the increases in ridership economically justify the fare decrease. The report will attempt to quantify fare reduction effects on transit demand. These results will assist local transit planners in the prediction of system changes resulting from the implementation of a reduced fare pro- gram. Any such guide lines must be examined and modified when applied to a particular local transit setting. 1 I i H4 4 H 1 S* CD • rH -Q d i d r- > Td 0) — <D o CD ad rH CD d fi -rd CO cn a g <D TJ (D <D r>~ CD CD d • •» -L> -L CD > d o CD > >> U1 d a d 0 d d r— <D i—4 i O rH o <D CD L ao Li CO CO o CM s- L >N i— I TJ a <D ao • rH vO g O-' CM d 0) CD rQ O H-> 4J <D O' l _ Td CO 4-> g r—H Li rH C'- • rH Oh a, Oi d I d a. cv • r-l J_i a a nen •73. 0) C CT" <D D d < d rH u a d w a, M » c • rH L d • rH d d L d o CD ao <a d d d r— > 0 t— CO <u o di ro | Li o ao rH d Ll tuO at) Oh £ CO vO X) o 1 • rH rH 0 L <D o a D <u 2 d r—4 H-> O' H O g 3 U m d P CP CO Q < cn CP P CM 2 H HH M >s 5 O d d Li D America o o d 'H rd -H rd 4-> d CD Li CD L D CD -M d d •4J CD d d d CD "d d d X d X <D D d d North o o u d > > -M > "d • H Eh a <D D g o CD d > U d Pd P D Li CD T) Li D 0 r-l D Q rH 1 in D T! i- Q ^ d T3 rH d d d d d cu d d CD 0) d L L < D L< ad 0) 03 m <u <D D -LL 0) d d > *zco p*' d d CM "d d CD D D D H u D g Programs P O p P O o o O O D P Pi <5 Fare CD "LL 'LL 'LL 'LL CD LO d — -u d .a- lo o o -d O CO CO 4-> CD Base •T— -ll ° > d CM Li j.
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