Staff Report: Unlimited access U-Passes and increasing ridership on the New Orleans Regional Transit Authority system.
Overview
Bobby Evans July 20, 2012
The following is a report on how an unlimited access “U-Pass” system could benefit the New Orleans RTA in terms of generating ridership. The focus of the report is to determine if further investigation of a U-Pass system is worth the time and money of the RTA. There are three sections to the report:
General explanation of the U-Pass system
How U-Passes benefit a transit system
How U-Passes benefit colleges and universities
Each of the three sections will begin with a discussion of national trends. This information has been gathered from scholarly articles published on the subject of UPasses. Each section will also contain discussion of how that particular subject relates to New Orleans and the RTA. Finally, this report will end with an examination of three main issues that would likely be the focus of a full scale RTA investigation into the U-Pass system. About U-Passes Essentially, a U-Pass is a contract between a college or university or group of schools and a transit agencyi. Most commonly, this relationship takes the form of a lump sum payment by a college or university to the transit agencyii. In return, the students of those institutions are allowed unlimited, fare free access to the transit systemiii. In such an arrangement, the amount paid by the university is calculated using the transit agency’s pass rate multiplied by the number of anticipated rides per studentiv. It is important, however, that the transit agency carefully calculates the pricing parameters in order to not lose moneyv. Many U-Pass contracts have sunset clausesvi. This provision allows for renegotiation between schools and transit systems and for students to reevaluate their need and desire for the U-Passvii. Alternately, an arrangement wherein the university purchases passes from the transit agency and sells them to students who choose to ‘opt in’ to the program does
occurviii. Evidence has shown that such arrangements have less success than a whole campus buy inix. Most commonly, the U-Pass system is financed through an additional student feex. Students choose to enact this fee upon themselves through a referendumxi. Early reports indicated challenges faced by U-Pass supporters in passing the referendumxii. However, time and other studies of the subject have shown U-Passes to be increasingly popular over the life of the agreementxiii. Other financial arrangements for U-Pass agreements include money from parking fees, the university general fund, and congestion mitigation air quality (CMAQ) grants or some combination of those sourcesxiv. Based on evidence from scholarly sources and primary Internet searches, there is typically a nominal fee to the students amounting to a range of $30-$150 per studentxv. These funds and the students they represent have great benefits for a transit agency How U-Passes Benefit a Transit System For transit systems the benefits of a U-Pass arrangement can be lucrative. Multiple research publications show that increased ridership, a guaranteed source of funding, and an improvement in overall transit service are all well noted benefits that accompany U-Pass agreements. A survey of 100 transit systems showed that U-Passes were the most popular method of attracting additional ridershipxvi. Among students, ridership has shown to increase by 70-200% within the first two years of the U-Pass agreement and 78% per year thereafterxvii. On a system wide level, multiple studies have shown UPasses to have a consistent, positive impact on total ridership upon implementation. A study by Brown, et al concludes that U-Passes provide an immediate total ridership impact of 7% per year. The arrangement between the University of Washington and King County Transit, one of the older U-Pass systems, shows that UPass riders account for 10% of all transit tripsxviii. In Milwaukee, U-Pass riders accounted for 25% of all transit riders after two years of the agreementxix. Some evidence from Brown, et al shows that U-Pass systems have shown to increase full fare ridership as wellxx. This can be accounted for due to the increase in capacity and service that transit agencies are able to provide given the
guaranteed funding provided by the U-Pass agreementxxi. Depending on the nature of the U-Pass contract, transit systems can use the guaranteed revenue from U-Pass agreements at their discretion. As long as service to the colleges and universities are maintained at satisfactory levels, the U-Pass funds can be put toward service expansion in other areas of the system. This is not to say that service expansion outside of routes that directly serve the university would not also aid the students. After all, students are members of the transit riding community as well. They would benefit from increased access to varied locations throughout the city and the mobility that a growing transit network would provide. Brown, et al have amassed evidence regarding transit agency performance improvements related to U-Pass agreements. Aside from total ridership, their findings include increases in: vehicle miles of service, reduced operating cost per ride, reduced operating subsidy per ride, and reduced total operating subsidy. One piece of evidence that Brown, et al point to is that students often ride during off peak times using extra system capacity. In Chicago, for example, the CTA reports that nearly 70% of U-Pass rides occur at off peak timesxxii. How U-Passes Could Affect the RTA There is no reliable method of accurately forecasting increased ridership as a result of a U-Pass agreementxxiii. A look into the crowding on the lines that serve Tulane University, Loyola University, University of New Orleans, Xavier University,Southern University of New Orleans, and Delgado Community College based on data from the 2011 Year End Performance Report regarding peak crowding shows that only two Bus lines, 91-Jackson Esplanade and 39-Tulane, would definitely need service increases. However, according the RTA Service Improvement Program’s guidelines on overcrowding, these bus lines would need increases in service regardless. Of the other remaining lines, that same report indicates that ridership increases would need to be quite dramatic, in the range of an additional 42-110%, for the line to be considered crowded enough for service expansion according to RTA guidelines. Next, though premature it is interesting to gauge the possible revenue that could be generated from a U-Pass system in New Orleans. Below is a chart of enrollments
of six of the colleges and universities in New Orleans; LSU Health Sciences Center enrollment figures could not be obtained.
School
Enrollmentxxiv
Date
Dillard
1,249
Fall 2011
Delgado
20,452
Fall 2011
Loyola
4,892
2010-2011
Tulane
13,359
2011-2012
University of New Orleans
9,825
Fall 2011
Xavier
3,391
Unspecified
Total
53,168
Conservatively, the total New Orleans collegiate student population can be estimated at 52,000. This next chart shows the potential revenue gained from a citywide U-Pass agreement at a range of student fee contribution levels. This table assumes that the U-Pass contract involves each school at the same student fee rate and does not include and ‘opt-out’ provision: each student participating in the program, thus adding funds. Fee level
City Wide Enrollment
Guaranteed Revenue
$15
52,000
$780,000
$30
52,000
$1,560,000
$50
52,000
$2,600,000
$75
52,000
$3,900,000
$100
52,000
$5,200,000
$125
52,000
$6,500,000
In the end, the realities of crowding and guaranteed yearly revenue would not be fully understood well into the contract negotiation process. However, this look into these factors provides a useful insight into what could be expected. The capacity constraints the RTA system might deal with do not raise any initial alarms. Possible funding levels to be expected are also positive in outlook. How U-Passes Benefit a University College and University campuses benefit from U-Pass agreements in four main ways:
Reduced pressure for on campus parking
Increased student mobility
Increased ability to recruit and retain students
Lower cost of attendance
For many colleges and universities available land is scarcexxv. Universities must often make a trade off between expanding or enhancing residential or academic capacities, and providing parkingxxvi. Multiple studies have shown that increasing parking supply on a university campus is both expensive and that parking passes are much cheaper than the cost of parking spotsxxvii. In order to deal with the scarcity of available parking, more than half of the universities examined in one report, limit the number of campus parking passes in some wayxxviii. In fact, parking scarcity has been shown to be the most common reason that colleges and universities enter into U-Pass contractsxxix Without facilitating student use of public transit, colleges and universities are left with few options. They can spend large amounts of money in complex financial arrangements to provide for increased parking supply. Or, they can limit the available parking and push the burden of storing idle vehicles onto the surrounding neighborhood. Evidence is showing that a third option, fostering a U-Pass system is increasingly popular in for colleges and universities in a wide range of settings all over the United Statesxxx. As an added bonus, U-Pass arrangements have shown to decrease the number of parking spots needed on cooperating campusesxxxi. On top of easing the land use burden faced by many campuses, U-Passes have proven to have other lucrative benefits for colleges and universities. First, U-Passes have proven to increase student mobilityxxxii. With unlimited access to a transit system, students are more able to access jobs, internships, field trips, and expanded housing optionsxxxiii. Along with increased options for housing, U-Passes make the possibility of student life without a car more reasonablexxxiv. Brown, et al showed that living car free as a student can lower the cost of attending school by around $2000 per year. U-Passes also help universities recruit and retain studentsxxxv. By marketing the school as more environmentally friendly and with a stronger
connection to the city, many schools are able to attract a wider pool of prospective studentsxxxvi. The Possibility of a U-Pass Market in New Orleans Contemporary evidence from Loyola University, Xavier University, and Tulane University points to the strong likelihood for a robust U-Pass demand in New Orleans. Each of these schools faces land use pressures that prove evidence from the scholarly research to be playing itself out right now. In 2010 Loyola University secured $6 million in funding for an addition to a parking garage as a part of a larger state bond initiativexxxvii. Providing an additional 236 spaces, the addition to the parking garage cost the school over $25, 000 per spacexxxviii. Given that the cost of the most expensive parking pass offered by Loyola is $400 per year, it would take the school more than 63 years to pay off this addition through the sale of the those passesxxxix. This is not to say that parking lots and UPasses should be traded for one another outright. However, this example speaks to the fact that land is at a premium, parking is expensive, and increasing the supply of parking space is difficult, if not impossible to pay for using the sale of parking permits. Given previously stated evidence, it is very likely that Loyola would benefit from a U-Pass arrangement. Xavier University has experienced a sizeable increase in funding in the days since Hurricane Katrinaxl. The academic and residential capacity of the school is expanding to such a great degree that school administrators have been assembling land for future usexli. In an interview with the New Orleans Times-Picayune one administrator said that he considered Xavier’s current surface parking area a ‘place holder’ for future academic facilitiesxlii. This is another example of the scholarly research coming to life in New Orleans. Finally, the struggles that Tulane University has undergone in attempting to construct a new football stadium have been widely publicized. Parking is a central issue in this debatexliii. The problems that Tulane has faced simply underscore the likelihood for a U-Pass market among colleges and universities in New Orleans. Three Main Issues to be considered in a Full RTA Investigation
Outside of the many benefits that U-Passes provide for both schools and transit systems there are three main issues that must be a part of any larger investigation made by the RTA. First, the seasonality of service increase related to U-Passes is an issue that requires further studyxliv. Nearly every system with a UPass has some seasonal service cuts and there have been innovative solutions in this regardxlv. Second, the added capacity needed to accommodate the influx of students on the transit system is crucial to the success of a U-Pass arrangementxlvi. Many systems add capacity in anticipation of the U-Pass agreement using the revenue generated from the contractxlvii. Lastly, there are upfront costs of both money and hard work that go into the development of a U-Pass systemxlviii. Negotiations with school administrations, student associations, lawyers, and unions require time and money. The tradeoff between the benefit of the U-Pass and the effort required must be thoroughly examined. Conclusion Unlimited access to given to college and university students in return for a lump sum payment to a transit system, also known as a “U-Pass,” has been proven as a popular, efficient method of increasing ridership in a myriad of settings. Transit systems benefit from:
Increased ridership
A guaranteed source of funding
Overall improvements and growth of the transit system
University benefits include:
Reduced pressure for on campus parking
Increased student mobility
Increased ability to recruit and retain students
Lower cost of attendance
Colleges and universities in New Orleans face many of the same pressures that are noted in the academic literature. Combined with the possible revenue
that a U-Pass system could provide for the RTA, a full-scale investigation of this type of arrangement would be a wise use of money and time.
i
Brown, Jeffrey, Daniel Hess, and Donald Shoup. "Unlimited Access." Transportation 28.3 Aug. (2001): 233-67. Web. 15 July 2012. <http://shoup.bol.ucla.edu/>. ii
ibid ibid iv ibid iii
v
TCRP Report 111: Elements Needed to Create High Ridership Transit Systems. Washington: Transportation Research Board, 2007. Web. 20 July 2012. <trb.org>. vi
Brown, et al. 2001 ibid ibid ix ibid x ibid xi ibid xii TCRP Synthesis 39 -Transportation on College and University Campuses. Washington: Transportation Research Board, 2001. N. pag. A Synthesis of Transit Practice. Ser. 39. Web. 15 July 2012. <http://trb.org>. vii
viii
xiii
Brown, et al. 2001 TCRP 39 xv Brown, et al.; "About U-Pass." Arizona State University Parking and Transit. Arizona State Univeristy, 2012. Web. 18 July 2012. <cfo.asu.edu/pts-transit-pass#UPass>. xiv
xvi
TCRP 111 Brown, et al. 2001 xviii TCRP 39 xix ibid xx Brown, et al, 2001 xxi ibid xvii
xxii xxiii xxiv
ibid TCRP 39 "Facts." Tulane University. Tulane University, 2012. Web. 18 July 2012. <http://tulane.edu/about/facts.cfm>.
"Loyola Releases Fall Enrollment Numbers." Loyola University New Orleans. Loyola University New Orleans, 11 Oct. 2010. Web. 18 July 2012. <http://www.loyno.edu/news/story/2010/10/11/2266>. "Quick Facts." Southern University of New Orleans. Southern University of New Orleans, 2012. Web. 18 July 2012. <http://www.suno.edu/About_SUNO/facts.html>. "Fourteenth Day Enrollment Report." Delgado Community College. Delgado Community College, 15 Sept. 2011. Web. 18 July 2012. <dcc.edu/departments/ir/enrollmentreports/>. "Fourteenth Day Enrollment Report." The University of New Orleans. N.p., 27 Sept. 2011. Web. 18 July 2012. <irdm.uno.edu/facts/index.cfm#EnrollSummary>. "Quick Facts." Dillard University. Dillard University, 2012. Web. 18 July 2012. <dillard.edu/index.php?option=com_content&view=article&id=57&Itemid=71>. "About Xavier." Xavier University of Louisiana. Xavier University of Louisiana, 2012. Web. 18 July 2012. <xula.edu/aboutxavier/index.php>. xxv
Brown, et al. 2001 TCRP 39 xxvii Nuworsoo, Cornelius. "Discounting Transit Passes." Access 2005: 22-27. Web. 15 July 2012. <uctc.net>. xxvi
xxviii
TCRP Synthesis 78 - Transit Systems in College and University Communities. Washington: Transportation Research Board, 2008. A Synthesis of Transit Practice. Ser. 78. Web. 19 July 2012. <http://trb.org>. xxix Brown, et al. 2001 xxx ibid xxxi Nuworso, Cornelius, 2005 xxxii Brown, et al. 2001 xxxiii ibid xxxiv ibid xxxv ibid xxxvi
ibid Anderson, Ed. "Loyola University expansion financing approved by State Bond Commission." New Orleans Times-Picayune 22 Jan. 2010. Web. 15 July 2012. <nola.com>. xxxvii
xxxviii
xxxix
ibid
"Parking and Traffic Regulations." Loyola University New Orleans. Loyola University New Orleans, 29 Sept. 2010. Web. 18 July
2012.
xl
Pope, John. "Xavier University being transformed by influx of money following Hurricane Katrina." New Orleans TimesPicayune 12 Mar. 2012. N. pag. Web. 15 July 2012. <nola.com>. xli
ibid ibid xliii Eggler, Bruce. "Proposed Tulane stadium to be subject of three community forums." New Orleans Times-Picayune 15 May 2012. Web. 15 July 2012. <nola.com>. xlii
xliv
TCRP 78 ibid xlvi Brown, et al. 2001 xlv
xlvii xlviii
ibid ibid