Elimination of Paper Transfers Could Mean Windfall for Metro
Tuesday, November 4, 2008
Metro officials estimate they could generate at least $5 million more a year in bus revenue by reducing fraud when the agency eliminates free bus-to-bus paper transfers in January, according to a staff analysis to be presented to a board committee Thursday.
Paper transfers will no longer be issued or accepted beginning Jan. 4; the phaseout was part of the fare and fee increase the board approved in December and was to take effect a year later. The phaseout also includes discounted rail-to-bus transfers. Effective Jan. 4, the discounts will be offered only to users of electronic SmarTrip fare cards.
A Metrobus ride costs $1.25 with the smart card or $1.35 with cash.
Metro has long sought to get rid of paper transfers to reduce costs and fraud and speed bus boarding. Currently, Metrobus riders paying cash can receive free paper transfers that allow unlimited travel for up to two hours anywhere in the region. But paper transfers are often sold or shared; it is common to see passengers passing transfers out the windows to other riders.
Bus drivers are supposed to make sure the transfers are valid, but in practice, they say they are more concerned with getting riders onto the bus and avoiding confrontation. Transit police say disputes over fares, often related to transfers, are a major reason for assaults against bus drivers.
The switch to SmarTrip-only transfers is politically sensitive because of the perception that Metrobus riders, who tend to have lower incomes, cannot afford SmarTrip cards and do not want to use them. The minimum cost is $10, including $5 for the card. Metro has given 50,000 free cards to social service agencies for low-income riders, but those agencies have not distributed all the cards.
Metro officials say the fraud is difficult to quantify. In August, more riders boarded Metrobuses using paper transfers than those paying with cash. Paper transfers are used at nearly three times the rate that SmarTrip transfers are used on Metrobuses, according to the analysis.
Metro spokeswoman Lisa Farbstein said there should not be such a large disparity in the proportion of riders boarding with transfers, whether from cash or from SmarTrip. "You shouldn't see such a difference," she said.
Other transit agencies experienced revenue increases after paper transfers were eliminated -- $17 million more than budgeted in Chicago and $14 million more in Boston, according to Metro's analysis. Metro estimates it will net more than $4 million in revenue for the last six months of the current fiscal year after accounting for the cost of free SmarTrip cards and other expenses, and gain at least $5 million a year after that.
Some riders have called for a delay because they say Metro has not done enough to publicize the change. Metro's customer outreach campaign began last month with ads inside and outside buses and in rail cars and stations. Starting next week, Metro plans to distribute 320,000 information cards that will hang from overhead grab bars in buses.
To counter criticism about the lack of places to buy smart cards, Metro is in negotiations with a major retailer "with a prominent presence" regionwide and hopes to reach an agreement by mid-December, Farbstein said. The cards are currently sold online and at Metrorail stations with parking lots, Metro sales offices, commuter stores and some Giant and Safeway stores.
Metro officials say riders using a SmarTrip card board buses twice as fast as those using cash. But they acknowledge a drawback that could slow things down: The only way to add value to the card on the bus is with cash.