A Study of Variable Fare Structure for MARTA

Georgia Tech CEE 6602/CP 6311 December 2, 2016

April Gadsby Nate Hixson Ruoyu Ma Yuqi Ma Jian Pang Image Source: http://www.chrissewell.info/

Outline Background • Problem Statement

Research • Peer Cities

• Model Design

• Case Study

• Analytical Approach

• Variable Fares • Previous • System Studies Overview

2

Analysis

• Opportunities

Background Photo: Peachtree Center Station, circa 1980 Source: Atlanta History Center Archives

Problem Statement • Breeze smart card fares laid groundwork for variable fare structures.

• Most agencies with the highest farebox recovery use variable fare structures • Our study aims to assess and select a fare structure that: • Increases fare box revenue • Maintains equitable service • Minimizes impact on ridership 4

Background

Research

Analysis

Fare Structure Alternatives

Fixed Fare

Zone Based

Congestion Based

5

Background

Distance Based

Special Destination Fees

Research

Analysis

Stakeholders Public Agencies Have invested resources in the system

Individuals Rely on the system to get around Tourists and Visitors

Low-Income Individuals

Disabled and Elderly Citizens

Choice Riders

Private Companies and Other Facilities Customers and employees use the system

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Background

Research

Analysis

MARTA Rail System • 4 lines; 38 stations • Current Fare Structure: • • • •

Flat Fare: $2.50/trip Free transfers Monthly, weekly, daily passes Discounted fares available

• Farebox recovery: 32.3% • Daily Ridership: 432,900 MARTA Guide. martaguide.com 7

Background

Research

Analysis

MARTA Red Line • 9 stations studied

• Variety of land uses and demographics • Urban Core • Urban Residential • Suburban • Airport • Institutional

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Background

Research

Analysis

Research Photo: Civic Center Station, November 1978 Source: Atlanta History Center Archives

Case Study: 6 Peer Cities Comparison Basic information Atlanta

Washington, DC

San Fransisco

Detroit

Seattle

Minneapolis

Name

MARTA

WMATA

MTC

DARTA

Sound Transit

Met Council

Urbanized Area

1,962 sq. miles

1,157 sq. miles

527 sq. miles

1,262 sq. miles

954 sq. miles

894 sq. miles

Urbanized Population

3.5 million (1,780 per sq. mile)

3.9 million (3,400 per sq. mile)

3.2 million (6,130 per sq. mile)

3.9 million (3,090 per sq. mile)

2.7 million (2,840 per sq. mile)

2.4 million (2,670 per sq. mile)

Annual Regional Transit Trips

166 million (47 per person)

436 million (111 per person)

452 million (140 per person)

54 million (14 per person)

140 million (52 per person)

75 million (31 per person)

Cost of Living Index

98.2

140.0

182.4

107.5

122.7

109.3

Source: Aecom Consult

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Background

Research

Analysis

Case Study: 6 Peer Cities Comparison Funding sources Atlanta

Washington, DC

San Fransisco

Detroit

Seattle

Minneapolis

Source: Aecom Consult

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Background

Research

Analysis

Case Study Summary Minneapolis

Washington

Denver

Atlanta

Fare Type

Zone

X

X

Distance

X

X

Congestion

X

X

Flat

X

Base price Farebox recovery Daily Ridership

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Background

$1.75 - 2.25

$1.75 - 2.25

$2.60

$2.50

37%

56%

14%

32%

286,300

727,700

339,300

432,900

Research

Analysis

Prior Research • MARTA completed Phase I of a variable fare study in 2010 • Studied seven relevant fare alternatives Equity

Zone-based

Time-based

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Background

Ridership

32.5% of lowincome riders 50% of nonwhite riders

25% of lowincome riders 40% of nonwhite riders Research

Revenue

-1.39%

0.40%

-0.75%

No change

Analysis

Analysis Photo: Georgia State Station, May 1979 Source: Atlanta History Center Archives

Analytical Approach • Zone-based analysis: • Based on Origin-Destination matrix of trips in March 2016 provided by MARTA. • Elasticity model based on TCRP Report 95: • -0.25 for longer trips (more than 3 miles) • -0.55 for shorter trips (less than 3 miles)

• Time-based analysis: • Based on Breeze Card boarding/alighting data for July 2016.

• Elasticity model based on TCRP Report 95: • -0.20 for peak boardings • -0.45 for off-peak boardings

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Background

Research

Analysis

Model Design Zone-based approach Ridership Numbers …

Airport

North Springs

North Springs

16,816

0

0

17,637

…

O-D Pairs

Airport

New Fare (Based on Zone Crossings) Airport

North Springs

North Springs

$3.55

N/A

N/A

$3.55

…

x

…

O-D Pairs

Airport

Elasticities Airport

North Springs

- 0.25

N/A

N/A

- 0.25

Airport 19

Background

North Springs

…

x

…

O-D Pairs

Research

Adjusted ridership matrix Analysis

Model Design Time-based approach Peak and offpeak ridership x

Proposed change in fare

Estimated change in ridership

Estimated revenue

x

Peak and offpeak elasticities 20

Background

Research

Analysis

Other Factors Implementation Costs • MARTA variable-based fare study in 2010 estimated implementation costs associated with variable fare structures.

• Zone-based: $14,674,000 • Time-based: $6,218,000 • Airport fee: $3,108,000

• Costs will need to be recovered in some way; difficult to do this with a revenue-neutral approach.

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Background

Research

Analysis

Scenario Setting

Minimum fare: $1.75

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Background

Maximum fare: $2.75

Research

Airport Surcharge: $5.00

Analysis

Results Zone-based • Average fare of study area was $2.45.

• $1.75 base fare; • $0.45 per zone boundary crossing.

• Assuming flat ridership, fare collections increased 0.1% • Using elasticity model: • +1.3% in ridership • +0.1% in revenue

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Background

Research

Analysis

Results Congestion-based • Flat-fare alternative: • • • •

$2.25 off-peak fare; $2.75 peak fare -2% in peak ridership; +4.5% in off-peak ridership +0.3% in revenue

• Increased–fare alternative: • $2.50 off-peak and $2.75 peak • -2% in peak ridership • +3.3% in revenue.

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Background

Research

Analysis

Results Airport Surcharge • Difficult to understand effects of airport surcharges.

• Case Study: Chicago Transit Authority • Charges $5.00 surcharge fee for departures from Airport. Users of certain passes are exempt. Airport employees are exempt.

• Resulted in a 1% decrease in ridership (departures from O’Hare Station) for the year it was implemented; ridership increased by 1% the following year.

• In the case study, elasticity was extremely low.

• Potential to generate $1.1mm in monthly revenue for MARTA. 25

Background

Research

Analysis

Equity Impacts Case Study: Oakland City • Primarily residential uses within ½ mile of the station • Median income within ½ mile: $32,459 • Impacts on equity will depend on the ultimate price levels chosen

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Background

Research

Analysis

Equity Impacts Zone-based • For trips originating at Oakland City: • 29% would experience fare increases

Zones Crossed

New Fare

Percent of Trips

0

$1.75

15%

1

$2.20

57%

2

$2.65

24%

3

$3.10

5%

• 71% would experience fare decreases

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Background

Research

Analysis

Equity Impacts Congestion-based

• 40% of boardings in June 2016 were made during peak periods • 6:00 – 9:00am and 4:00 – 7:00pm

• This would result in higher fares those trips.

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Background

Research

Analysis

Equity Impacts Airport surcharge • Significant equity impacts associated with airport surcharge – many airport workers make minimum wage.

• Impacts could be mitigated by exempting airport employees from fare surcharge.

• Examples of mitigation: • Distribute special Breeze Cards to airport employees that are coded to exempt them from the surcharge • Exempt users of existing Breeze Cards - charge the fee on Breeze Card purchases, rather than the fare

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Background

Research

Analysis

Conclusions & Recommendations • MARTA should continue to study the impacts of fare changes, especially as the system expands • Currently, changing to a variable structure would be difficult to justify, unless MARTA was raising fares.

• MARTA should study the airport surcharge option further, assuming they are comfortable mitigating equity impacts.

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Questions?

Photo: Tunnels south of Five Points Station, Sept 1980 Source: Atlanta History Center Archives