Metro lists a whole set of social and economic goals governing its policy on fare increases, but a key goal is the obvious one: To make money.
Asking riders to pay more will raise money, but if you ask them to pay too much more, some of them will stop riding, and that’s counterproductive.
On Thursday, the Metro transit staff will propose a fare increase that averages 3 percent, starting in the middle of 2014.
What Metro learned from the last fare increase, in 2012, influenced the development of this new fare plan.
They included elimination of the 20-cent “peak of the peak” surcharge on rush hour travel aboard Metrorail, revision of the off-peak fare structure and a big increase in the surcharge for using cash or paper fare cards instead of plastic SmarTrip cards. Metro estimated the overall fare increase at 5 percent, though many riders found that the cost of their individual trips went up a lot more, based on the time they traveled and the distance between stations.
Revenue derived from passengers in the 2012-2013 fiscal year ending in June increased about $42 million, but revenue fell short of projections because of a decline in Metrorail ridership, transit officials said.
Metrorail riders reacted more strongly to this fare increase than they had to previous increases, partly because of a temporary drop in the federal transit subsidy, according to a planning document presented to Metro board members in October. Metrobus ridership, by contrast, was relatively stable. In the initial months of the current fiscal year, which began in July, Metrorail ridership was holding steady, and Metrobus ridership showed modest growth, the report said.
The long-term trend that Metro is looking at goes like this: Between fiscal years 1994 and 2009, annual ridership on Metrobus and Metrorail grew from about 290 million trips to 360 million trips, or about 24 percent.
Since the 2009 fiscal year (July 2008 to June 2009), a period that would include the recession as well as the decline and restoration of the federal transit benefit, total Metro ridership declined to 340 million annual trips, a drop of about 6 percent. Both Metrorail and Metrobus declined in fiscal 2010, but Metrobus regained some if its lost ridership while Metrorail ridership stagnated. The Metro report said ridership in fiscal 2013, ending in June, was about the same as in fiscal 2007.
Since the more recent experience with ridership doesn’t inspire as much confidence as the 1994-2009 years, how should Metro approach the next round of fare increases?
Transit officials say they are again dealing with some uncertainties about how riders will react.
“There are a lot of short-term negatives,” Metro budget official Mark Schofield told board members in October, as the new budget was being prepared.
Once again, the federal transit benefit is set to be reduced. A federal worker getting a $245 monthly transit benefit might take a fare increase in stride. Cut the benefit to $130 a month as of Jan. 1, and other forms of commuting might start to look more attractive.
And factor the benefit cut into a rail ridership that apparently is becoming more sensitive to fare increases than it was before 2008.
“This may constrain Metro’s flexibility in changing fares and trying to balance the funding burden between riders and local jurisdictions,” the transit authority’s report said.
Layer onto that the fact that telework has increased in popularity, particularly among federal employees. “If telework continues to grow, it has the potential to impact commuting patterns across the region on all modes,” the Metro report said.
There are bright spots for those trying to balance the transit budget. Notice all those townhouses and apartments that have been rising around stations? Such transit-oriented development creates a Metrorail market just as well as building more commuter parking garages.
Metro officials also see plenty of potential for bus ridership growth along commuter corridors.
And taking a really long view, Metro’s financial team also is looking at generational changes. They see that many millennials want to live in neighborhoods with good access to transit. Meanwhile, some of the Baby Boomers reaching retirement age are looking for smaller, closer-in residences where they won’t need their cars as much to get around.
While the long-run may be rosy, the present uncertainties have got Metro planners looking to see how far they can trust their old models on ridership.