Ask Pat: $1 Transit?

Terran asked—

Hey Pat,
Hope I’m allowed to still ask questions even though I don’t live in New Westminster anymore. (I’ll be back once affordability comes back)

Translink recently started asking about transit fares again. This was a long time promise for the compass card that we could better manage the system. The survey is quite overly simplistic but that’s not my question more concern.

My question stems for the comments below the Facebook post they have for the survey. The idea of $1 transit fares comes up. Considering only ~35% of the budget comes from transit fares could this actually be a realistic option? I know I would switch from using my car if I could get to work for only a $1. Would the increased ridership even come close to off setting the huge loss in revenue? Is there even a way to know?

Sure, I’ll give you one free question since you used to live in New West. Wait – was that your question?

As you mention (and I talked about a bit a few weeks ago), TransLink is going through a Fare Review process right now. This is likely in response to the integration of the Compass Card as much as to a newfound opportunity for the next stage of system growth, as the Mayor’s Plan for a decade of capital investment may be back on track.

This review is not intended to boost or reduce fare revenues, only to re-jig the system to make it work better; to make it more “fair” or more user-friendly. The working model is that any adjustment would result in about the same revenue from fares, it will just be collected in different ways. The survey therefore was designed to collect people’s feelings about fare structures such as whether people who travel farther should pay more, or the entire system should be a flat fee, but is basically silent on what the actual flat fee or distance charge would be.

What you are suggesting is not just a “flat fee” model, but one that sets the fee quite a bit lower than it is now, in hopes that it will boost ridership. Considering the purpose of the survey, what would that rate have to be?

TransLink receives a little more than 1/3 of its operating revenue from the farebox, or about $510 Million of a $1.4 Billion budget. Aside from roads and bridges and all the other things TranLink does, they annually have about 240 Million journeys on the multi-modal transit system, or 360 million boardings (obviously, some portion of journeys results in more than one boarding, as a person may transfer from SeaBus to the SkyTrain, or from one bus to another on a single journey). So depending on whether you want to issue transfers or not, you would need to charge $2.15 per journey, or $1.45 per boarding.

So a dollar won’t be enough, but would this simple and cheap fare boost ridership enough to make up for it? At current service levels, there would need to be a doubling in the number of journeys on the system, or a 45% increase in boardings. Anyone riding a SkyTrain during rush hour or standing on a 106 recognizes this is not viable without a significant increase in service levels, which would require investments in the capital part of operations (buying more trains and buses), not just increased operational costs.

Perhaps there is some wiggle room in the idea of flat $2 fares per journey, one might speculate that this would provide a 7% increase in ridership to make up for the lost revenue per ride, but that brings us back to the fairness question: should a person riding the 106 from Columbia Street to Uptown pay the same amount as someone riding SkyTrain from Surrey to Downtown Vancouver? Which type of journey are we trying to incentivize more? These are the questions the current review is trying to address, even at a relatively simple level.

Calculating an optimum fare, one that incentivizes use but also provides enough ridership to maintain a system, is some difficult calculus, even putting aside the political implications of increasing the various tax subsidies to the system (or the massive tax subsidies to the alternatives). I don’t think we are going to get there through this fare system review.

And seriously, we really need to talk about how much you are spending on your car now. If $1 fares would sway you, perhaps you might want to crunch the numbers and see where $2.15 fares put you, financially. The sad reality is that, regardless of how much we subsidize cars, they are still surprisingly expensive to operate if you do the actual math.

4 comments on “Ask Pat: $1 Transit?

  1. The very well used Mexico City fare on Metro is 5 pesos. With the peso worth approx. 1/15 of a Canadian dollar, 5/15 would be about 30 cents. But when many Mexicans earn in a day what our lowest paid workers earn in a hour, then 8 x the 30 cents should be considered cheap – $2.40. How would that fly?

  2. For individual riders, our transit system is good value for money and certainly cheaper than running a car (if you don’t factor in the increased time it’ll take you to travel). For families, transit is not such a deal, especially if the children are over 5.

    1. Totally with you, there, Garry. It is unfortunate that we discourage transit use right at the age (pre-teen) when we could be normalizing it as the default way to get around. Something I will write more about in the near future.

  3. Given that the infrastructure appears to be overstressed during rush hour and somewhat underutilized the rest of the day, it may be possible to get the best of both worlds by reducing fares to below breakeven (maybe even to a flat $1 per boarding) outside of rush hour, and make up the difference with higher, distance based fares in the morning/evening.

    Doing the actual math, rush hour fares would need to rise at least $15 a day (New West to Downtown return) to tempt me back into my car.

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