Is now the time to sharply cut transit fares in Massachusetts? T fares have risen much faster than inflation, more than doubling since 2003.
Lower fares would result in more riders. More riders means less cars on the road which is good for everyone. Transit already carries a big share of the traffic on the most common routes into the core of the Boston area — approximately 40% region-wide. Even a small shift to transit could make a big difference in congestion.
I’m not suggesting that the MBTA and other transit authorities should run with less money. We are in the middle of a sustained effort to provide better quality transit service and that costs money.
Statewide, transit authorities raise approximately $800 million per year from their riders through fares. To cut fares, the legislature would need to identify annually recurring funds and permanently pledge them to the MBTA and other regional transit authorities. The pledge would be combined with a legal mandate that the funds be used to replace fare revenue. The transit authorities could then make decisions as to how specifically to allocate the reductions. The reductions would be permanent in the sense that future increases would be limited by existing law.
For example, a 9 cent per gallon gas tax increase and a one dollar per ride charge to Uber/Lyft users would raise a little less than $400 million. This should be enough to cut transit fares in half statewide. Likely, it would be a bit more than enough given that ridership would increase and generate additional revenue.
Drivers in western Massachusetts generally drive further each day than Boston drivers and do not want to subsidize the Boston region with gas tax payments. The new collections should be returned to the regions that they are collected from to assure geographic equity. If, within a region, the collections exceed the amount necessary to eliminate transit fares, the excess should be returned to cities and towns in the region for road improvement.
How ridership changes in response to fare changes is a subject of extensive empirical research, locally, nationally and internationally. For some riders on some routes, time savings are a more important consideration than fares. That tends to be most true for rail and subway routes that can move much faster than road traffic. Except when they benefit from dedicated lanes, buses tend to move more slowly than traffic because they stop frequently. Bus ridership is more sensitive to price changes than rail ridership.
Analysis of past fare changes in the Boston region shows roughly a .15 “elasticity of demand” ratio. In other words, a 10% fare increase would yield a 1.5% ridership loss. A 50% fare decrease would be outside of the historical range of experience, but if the .15 ratio held, we could expect an overall ridership increase of something like 7.5%. On the other hand, a fare decision of that magnitude would send a strong message of support for transit ridership and might lead to a larger increase in usage.
A careful analysis would need to be done by each transit authority about how to allocate the fare decrease to achieve manageable ridership increases. The authorities would have to think carefully about fare equity and how the changes affect lower income riders. An across-the-board even decrease would be easy to explain and would probably pass equity muster, but there are other possibilities.
For example, the MBTA could completely eliminate fares for local buses while making a more modest adjustment for the subway. This would benefit some of the lowest income transit users. It would have the additional benefit for both riders and drivers that buses would not be pausing in traffic while riders pay their fares. It might also greatly simplify the implementation of any new fare technology, although it would mean foregoing the ridership data provided by collections.
There is also a good case for targeting commuter rail fares. Commuter rail fares are distance based, so that commuting from endpoints like Worcester and Lowell can cost several hundred dollars per month. On the Worcester line in particular, we need to drive ridership up in advance of the disruptions likely to be caused on the MassPike by the Allston interchange construction.
As much as we struggle to provide more affordable housing, people of modest income find themselves increasingly priced out of the urban core. We need to make it economically feasible for them to commute to the high employment core of the region or they will be deprived not only of their preferred housing but of employment.
Please share your quick reaction to this proposal below. Please weigh in with your more detailed thoughts and concerns as comments further below.
- Studies of MBTA fare increases by the Central Transportation Planning Staff
- National Academy of Sciences Survey of Fare Increase Literature
- Amateur Planner blog on 2012 increases
- Crude estimates of ridership impacts of blanket fare cuts