Check out the short version of the Smart Passes concept
See what other people are saying about Smart Passes
See how Smart Passes are consistent with Metro’s fare principles
The Smart Pass concept improves Metro’s finances. Read the analysis.
by Allen Greenberg (Metroriders.org) and Michael Perkins
Smart Pass works best when people subscribe. Purchasing a pass every month helps stabilize WMATA’s revenue stream, and ensures that the customer will be able to take free trips month after month without worrying about their account balance.
One of us (Michael Perkins) had argued before on Greater Greater Washington for a bulk purchase discount, where customers would get their thirteenth week free when they signed up for and purchased twelve consecutive weeks of passes using a subscription. Some transit agencies do this when you subscribe to monthly passes in the mail. In the end, this was left out of the proposal, because it made the explanation a little more complicated, and because WMATA might not be able to offer this discount and keep the Smart Pass idea budget-neutral.
What if instead of offering a discount on the transit passes you’re already buying, subscribers could get a complementary subscription to bikeshare or carshare instead? This might be a winning combination. (For those not from the Washington region or new to it, Capital Bikeshare, or CaBi for short, has deployed 1,100 bikes in over 110 bikeshare stations, where members use an electronic key to unlock bikes for an unlimited number of free point-to-point trips so long as each is kept under 30 minutes. Carsharing, or automated hourly neighborhood car rentals offered in the Washington region by Zipcar, is used by members as a convenient alternative to car ownership.)
For the rider, it provides a discounted means to get two different subscriptions that complement each other. Bikeshare is a convenient way to take short trips within the city that don’t quite line up with the bus or rail system or that the user occasionally, for whatever reason, prefers to take by bikeshare. You can leave anytime without checking schedules or waiting at a stop or station. It provides “last mile” access to destinations that aren’t well served by transit. Carshare is also a complement to transit. It lets you carry items that would be bulky or awkward on the bus or train, access places that transit doesn’t serve well, and avoid waiting for the transit vehicle to arrive (or for multiple vehicles if transfers are required) when you are especially pressed for time.
For the agency, enticing people to subscribe stabilizes the revenues they get from passes, since customers would buy passes even when they think they won’t be commuting every work day. By providing their pass customers with bikeshare or carshare membership, they can also reduce the number of free trips desired by the customer since some of those trips will be taken using a shared bike or car.
For the region, the discounted combination of transit pass, carshare, and/or bikeshare offers a good substitute for car ownership and can decrease the number of people who own cars or need to use a personal car everyday. Arlington County Commuter Services chief Chris Hamilton says, “We are always willing to explore ideas that incentivize new customers to bus service and existing bus customers to use the bus for more of their trips. This sounds like it could be one. Bikesharing and carsharing are good complementary services [to transit].”
While WMATA may not be able to afford to offer such a discount, the District and/or Arlington have an interest in promoting transit use and reducing the number of residents that feel like car ownership is necessary (and then who often take up valuable on-street parking spaces and complain to the government when such spaces are in short supply). DC and Arlington should consider offering a discount or free carshare or bikeshare membership when a resident subscribes to a Smart Pass. In the case of carshare membership, Zipcar has at times offered deeply discounted promotional memberships, probably because it brings in new customers who might not otherwise join and who then pay for the hourly rentals that make Zipcar money. Since this proposed Smart Pass benefit would bring new members to Zipcar without the company having to incur marketing costs, Zipcar should be amenable to the government partner paying it only a fraction of the regular membership rate. In any event, the bikeshare and carshare discount could start small but increase as the number of months or the size of the pass increases, up to the point where you get your choice of free bikeshare or free carshare membership, or even possibly both, if you sign up for a whole year of Smart Pass.
I recently contacted the Metro Board of Directors to update them on the Smart Pass concept, mentioning the media coverage, new blog, Twitter and Facebook pages, and endorsements the concept has gotten from supporters.
Metro provided the following response:
Dear Mr. Perkins:
Thank you for your April 14, 2011 email message to the Washington Metropolitan Area Transit Authority (Metro) Board of Directors regarding the Smart Pass concept. I have been asked to respond.
We believe that introducing your SmartPass concept to the Metropolitan Washington region could present additional benefits to Metro and our customers. In fact, Metro is already considering a robust analysis of the proposed pass program and its potential impacts. This assessment would include reviewing the experiences of similar agencies’ pass programs, determining more refined assumptions, and performing the analysis on several months’ worth of data reflecting passenger behavior after the most recent fare increase.
We certainly appreciate your knowledgeable assessment and enthusiasm for this process, and we thank you for your interest.
Office of Long Range Planning
Per trip, that is.
I did an extreme worst-case financial analysis of the Smart Pass proposal. I assumed that no one would start riding Metro because of Smart Pass, that riders knew everything about their travel plans and only bought passes when they knew they would average five extra expensive trips, that the number of such customers buying passes would double, that there would be no snow days, that bus pass customers already take rail trips and would only save money, and other extremely conservative worst case assumptions.
I was surprised at how limited the financial impact would be, even in the worst case. The revenue cut would be about $20 million per year or less, which sounds like a lot but is really just a bit more than a nickel increase on all fares. If you take more than 40 trips a month, you could cover this by increasing your Smart Pass by a nickel per trip and pay $2 per month more. If you’re taking fewer than 40 trips a month, the impact is less. Obviously the fare increase design should be balanced better than a flat increase on everything.
This analysis makes some extremely conservative assumptions and should be considered the absolute worst case scenario. Metro would be able to handle even this worst-case financial impact during the next round of fare increases, which will likely happen in July of 2012. This extra nickel would probably be reduced since the Metro analysis won’t make such extreme assumptions, and the jurisdictions could be asked to chip in funding to support Smart Pass, which has regional and environmental benefits.
Alexandria is looking for riders that want to test loading a monthly bus pass on their SmarTrip cards.
Customers would be able to load the $35 monthly pass, which is good for a month of unlimited trips on Alexandria’s DASH, Arlington’s ART, and Fairfax Connector bus services. The fare on each of these services is $1.50 with Smartrip, and there’s normally a $0.50 discount on transfers from Metrorail. This pass is being offered at 23 times a normal fare if you only take the Virginia bus services, an excellent deal for customers relying only on those bus systems.
Customers relying on both bus and rail might want to use this pass. Like the WMATA regional weekly bus pass, if you transfer from a bus ride on the pass to Metrorail, you will not get a transfer discount. Paying per ride, you’ll pay $40 for the bus segments of trips using Smartrip (after transfer discounts are tallied), and only $35 for this monthly pass. This is still a good deal.
At first, customers will have to purchase and load their passes at transit stores, CVS and Giant stores in Alexandria. Eventually, Alexandria will add the ability to purchase and load the pass online. A subscription option is in the works.
If you are interested in participating in the pilot program, visit the website announcing the DASH pass program, fill out the application, and fax it to 703–746–5641 or email it to tristan.cunningham at alexandriava.gov.
It is looking like the federal government will shut down next week, and many employees will be staying home without pay.
Politics aside, this is bad for Metro. The loss of riders will reduce Metro’s revenues, but if those workers instead were purchasing transit passes, Metro’s bottom line wouldn’t be hit so hard.
Metro announced yesterday that they plan to maintain the current rush hour schedule, but in order to reduce costs will run shorter trains if demand is light. Their press release estimated about a 5-20% reduction in riders, or between 35,000 and 140,000 trips.
Reducing the train lengths will save electricity and maintenance, but the most expensive part of running a train is the operator, and that’s not being reduced. Metro’s costs will remain largely the same, and the reduction in riders will reduce fare revenue.
In my estimate, Metro will lose about a quarter million dollars per day during a shutdown ($2.50 per trip times 100,000 trips). This loss would be smaller if Metro had Smart Passes.
Most federal workers taking Metro get a subsidy to take transit, which they can receive as either the amount of money needed to commute from their home every work day, or monthly/weekly passes that cost the same amount or less. The Smart Pass concept is designed to be the same price as a daily commute, meaning many federal workers would opt for a pass instead of fare value. Metro gets to count fare revenue only when you take a trip, or when you buy a pass. With passes, Metro has already gotten revenue at the beginning of the month, so days off due to snow or government shutdown do not reduce the agency’s revenues.
Here are the entries for the “tweet the concept” contest, in no particular order:
From @cjrock: monthly @smartpasses=40trips @ std. commute rate. trips @>cost: pay diff w/ $ on SmarTrip. >40trips? “free” rides!
From @wmataplusside: @smartpasses is a good idea for monthly passes. For 40x cost of 1 trip, get free rail or bus use equal or less the cost of that trip. (This one had a little help from me)
I’m just going to post these and see if there’s a strong people’s choice.