Metro officials find obstacles embedded in SmarTrip plan
Friday, September 17, 2010
Metro's plan to reduce the price of SmarTrip cards by half has encountered major obstacles: the agency's concern that people would use cheaper cards to avoid paying millions of dollars each year and the possibility that the agency will run out of the electronic cards, Metro officials said Thursday.
The revelations at a committee meeting Thursday of Metro's board of directors exasperated several members, who decided to halt the discussion and ask staff to return next month with better solutions.
"This is embarrassing," said board member Jim Graham, who is also a D.C. Council member (D-Ward 1). "I think we should move off this agenda item. With every passing minute, it looks worse."
Metro had planned to cut the price of SmarTrip cards from $5 to $2.50 to encourage use of the cards. The agency provides discounts of 20 cents on bus trips and 25 cents on rail trips for SmarTrip users.
Metro staff members grew concerned that some riders would take advantage of the cheaper SmarTrip cards, which allow customers to exit the system once with a negative balance, by buying cards at $2.50 and using them for more expensive trips.
Given that rail trips can cost as much as $5.20 and bus trips as much as $6, Metro officials estimated that the lost revenue from customers "gaming the system" could reach $1 million per month.
"The more money they could make off it, the more likely they'd be to do it," said Steve Holland, Metro's director of customer service, sales and fare media services.
Worsening the problem, the company that makes SmarTrip cards is discontinuing them, Metro officials said. Metro has purchased an estimated two-year inventory, but that could dwindle rapidly if customers purchased the cards in higher numbers.
Metro officials said they would have to switch to a new technology for SmarTrip cards in the future but provided no details.
"This is the only company that makes these cards. This chip and card will no longer be available," board Chairman Peter Benjamin said. In the meantime, "you have to watch what you do or you will end up with no cards."
Holland acknowledged that "if someone buys two cards a day, we will burn through the cards much faster than projected."
Board members, who in part based their decision to cut the price of the cards on information that the cost to Metro had fallen to $2.50, learned that the cost is actually $3.40, meaning Metro would lose 90 cents on each sale.