Fare's Fair?

When does transit fare policy treat people unequally? When it treats them exactly the same.
Why?
At the risk of overgeneralization, there are two major constituencies for mass transit. First are wealthier workers who commute to jobs in city centers where parking is expensive. The other group consists of the very poor. Unlike the “choice riders,” who could drive if necessary, low-income “captive” riders often have no other option.
The two groups have very different travel behaviors. For example, they favor different modes. As of 2001, the wealthy were much more likely to ride commuter rail or heavy rail (e.g. most subways) than bus or light rail; those earning over $100,000 took twice as many trips on the former modes as on the latter. For the poor, it is just the opposite. Members of households with incomes under $20,000 were almost six times more likely to take bus or light rail trips than heavy or commuter rail ones.
The wealthy also travel longer distances. Those bus and light rail trips favored by the poor averaged only 6.8 miles, while the heavy rail and commuter rail trips preferred by the wealthy averaged 8.7 and 22.1 miles respectively.
Since they are largely commuters, the wealthier tend to travel during the peak periods (the weekday morning and evening rush hours) and in peak directions (inbound in the morning, outbound in the evening). The poor, who rely on transit for a wider variety of travel, take trips in more varied directions and are much more likely to travel at off-peak times.
What does this add up to? In pretty much every respect, the trips of the wealthier impose heavier costs on the system than the trips of the poor.
Bus service is cheaper to provide than rail service. Short trips are obviously less expensive to accommodate than longer ones.
And even though vehicle occupancy is much higher during the peaks, on a per-rider basis it is still cheaper for transit agencies to provide service at off-peak times and in off-peak directions. This is because accommodating rush-hour traffic means purchasing extra vehicles and hiring extra staff which will be underused at midday, at night, and on the weekends. It also means problems with trips like reverse commutes; for example, commuter trains often travel outbound during the morning peak and inbound during the evening nearly empty.
Yet despite the very different burdens different types of trips impose on the system, most transit agencies prefer the simplicity of flat fares, regardless of time of day, day of week, mode, distance, or other forms of costs imposed (excepting, to a degree but not completely, commuter rail service).
This is why it was with considerable happiness that Professor Brian Taylor and I read this article announcing that the New York MTA is considering cutting fares during off-peak times. Brian is my mentor at UCLA and is an outspoken advocate for equity in transportation; after seeing this piece he wrote me that “you would be hard-pressed to find anyone in the country more excited by this article!”
What has Brian so giddy? This policy would be progressive in that it would benefit poorer riders who disproportionately travel at off-peak times. It would also be equitable in that it would reflect the lower costs those riders impose on the system. This would help equalize the subsidy each passenger receives.
And in addition to being more fair, this policy would be more economically efficient. By using price signals to increase demand at off-peak times, it would put underused staff and equipment to work.
Consider that transit vehicles can be packed during the peaks but are decidedly light on traffic much of the time; economists Clifford Winston and Chad Shirley calculated that as of the mid-1990’s rail vehicles ran only 20 percent full. Yet there is usually no flexible pricing mechanism to fill those seats. Compare this with the commercial airlines, which are continually (perhaps maddeningly) adjusting prices to be sure every seat is occupied, and which have succeeded 81 percent of the time this year.
Unfortunately, for the moment new MTA chairman J.H. Walder is ruling out fares that are higher for longer trips, but this would be the logical next step. As with time-sensitive fares, this would combine greater equity with improved economic efficiency. Distance-based fares sound confusing and logistically difficult, but they need not be: San Francisco and Washington (which also offers an off-peak discount) already charge fares based on distance without any major problems.
But for now, off-peak discounts are definitely a step in the right direction. In a world where economic efficiency and social equity are often at loggerheads, this policy promises to increase both. Let’s hope the new ideas will represent more than a (sorry) token effort.