May 23, 2013

Expert suggests Capital Metro revamp fare system

Transportation expert Nancy R. Edmonson recommended changes to most aspects of Austin, Texas-based Capital Metro’s fare structure, which would improve equity and consistency across fare types and could net an additional $3.8 to $4 million in revenue, annually, if fully implemented over the next two years.

The recommendations include some internal, behind-the-scenes changes that would improve the bottom line but not impact riders, such as renegotiating contracts with major employers and the retail outlets that sell Capital Metro passes. Other recommendations would address customer concerns, such as eliminating the complicated zoned-fare structure for MetroRail and providing more equitable discounts for various pass types.

Edmonson recommended adjusting some fare rates and passes within the next year, with a 25%, across-the-board fare increase in FY2015.

“Our region has serious growing pains, and we need continued investment in mobility to keep the quality in our quality of life,” said Capital Metro President/CEO Linda S. Watson. “We’ve improved nearly every aspect of our business so that Capital Metro is in a position to lead the charge to keep our region moving, but we need a modern fare structure if we are going to be a modern transit agency.”

Capital Metro has some of the lowest fares in the nation. In FY2012, revenue from fares covered just 13% of the cost to Capital Metro to provide transit service. That fare recovery rate is very low by industry standards, and Capital Metro has a board-approved long-range policy goal to reach the industry best practice of a 20% fare recovery rate.

Capital Metro has worked to improve the fare recovery rate by reducing overall operating costs and increasing ridership and route productivity — all of which are factors impacting fare recovery. Route productivity has increased by 12% as a result of implementing ServicePlan 2020 and other changes. Capital Metro also reduced costs by streamlining and revamping the MetroAccess service and by implementing a new business model for delivering transit service.

Edmonson also recommended the agency develop a new fare policy by FY2015 that would establish a set schedule for fare adjustments over time. That kind of consistency and transparency allows both the community and Capital Metro to be able to plan ahead.

In addition to streamlining the fare structure, Capital Metro also plans to make it easier to pay, with a new mobile ticketing app to debut in time for the launch of MetroRapid bus rapid transit service in early 2014. The Capital Metro board approved a contract with Bytemark Inc., to develop, host and maintain the mobile ticketing app.

Capital Metro will begin a public involvement campaign over the next few months to discuss the various recommendations and get feedback from the community. Public input will shape a final fares proposal that the Capital Metro board will consider for adoption in September.

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