metrosmartpasses

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.

Sincerely,

Tom Harrington
Director
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.

This is the winning entry in my contest:

From @ahwahoo2006: Smart passes for Metro! Flat rate, unlimited use (up to a certain pre-set value). Everyone wins! http://bit.ly/gEttck @smartpasses

Congratulations!

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 @metrorage: Unlimited weekly/monthly #wmata rail/bus @smartpasses = best idea since Declaration of Independence; if you ♥ freedom you’ll ♥ @smartpasses.

From @yatesc: Save time and money: buy a pass for your commute, get any other rides free! (It helps Metro, too.) http://metrosmartpasses.org/@smartpasses

From @ahwahoo2006: Smart passes for Metro! Flat rate, unlimited use (up to a certain pre-set value). Everyone wins! http://bit.ly/gEttck @smartpasses

From @wmataplusside: @smartpasses if(smartpass.buy){funds-(40*basefare); while(month=CURMNTH)(unlimrail==true)&&(unlimbus==true);}}

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)

From @wmataplusside: @smartpasses is a smart idea for #wmatamonthly passes. For $ of 40 rail trips/mo, get unlimited rail & bus use =< the cost of one trip.

I’m just going to post these and see if there’s a strong people’s choice.

I’m looking for someone that can write the Smart Passes concept in 140 characters or less, so I’m announcing a contest.

Compose a 140–character tweet that accurately and creatively describes the key points of the Smart Pass concept, and send it to @smartpasses or put it in the comments below.

Bonus if you can fit a short URL in it to point to the website.

Entries are due by Midnight on Tuesday, April 5. I will post the entries on the blog on Wednesday and announce a winner and a runner up. I’ll mail a $20 Metrorail farecard to the winner.

All entries remain your intellectual property, but you agree to let me use them on the blog and elsewhere to promote the Smart Pass concept.

If Smart Pass ever becomes a reality, it would open up new possibilities in transportation demand management. One of these would be the introduction of a group-based pass (pdf) like a University Pass or an Eco Pass.

These passes work like group insurance for transit. A large group of people like a university student body would decide to implement a universal, mandatory fee, and in exchange all members of the group would receive a transit pass. These programs are fairly common at universities, where they are called U-pass or student passes. Usually the fee is a student activities fee, paid annually or by semester with tuition.

Some cities like San Jose have programs where employers can pay a fee for all their employees to get a transit pass, a program many cities call Eco Pass. This is different from an employer subsidy because the employer pays a discounted rate for all employees, even the ones that don’t take transit. Then, all employees would get the same transit pass.

Boulder, Colorado has a program where a neighborhood can agree to impose a transit fee, and everyone in the neighborhood gets a transit pass.

These programs are effective in reducing the demand for parking. A study (pdf) conducted at the University of California, Berkeley showed that the net revenue to the transit system increased by nearly 50%, and transit ridership increased as well. At UCLA, demand for student parking dropped, with the waiting list for a space dropping by nearly a third.

The passes Metro has now wouldn’t work as well for a U-pass or Eco Pass, because they’re currently limited to only rail or only bus. The student body or employer would have to decide whether to lock in transit riders to a bus-only or rail-only pass. With Smart Passes, the pass could be valid on either rail or bus, and the student body or employer could decide what amount of pass is a good balance between the price of the mandatory fee and the needs of its members or employees.

For an example, American University could require students to pay a $200 student transit fee per year, and in exchange all students would be able to get a Smart Pass good for the first $3 of any transit trip.  The fee would be based on an estimate of how many trips the student body would take, and might take a couple of years to get enough data to make an accurate determination. Universities or employers with better transit access would be asked to pay more, because their students or employees would take more transit trips on average.

Another example would be a large apartment building in the Rosslyn-Ballston corridor. These apartment buildings are almost always developed under a site plan approved by Arlington County. Site plans allow the developer to adjust the development outside of the requirements of zoning and other regulations. Usually the developer agrees to build-to lines, first floor retail, construction of nearby street or sidewalk amenities, affordable housing set-asides and transportation demand management functions like paid parking. In exchange, the developer gets additional height or density, and reduction in the number of required parking spaces. Part of that transportation demand management program could be requiring the building to fund an Eco Pass for its residents, giving all residents a transit benefit as part of the site plan requirements.

The last example would be if a major employer like the Pentagon decided that instead of paying for a transit benefit only for the employees that use it, they would instead pay an Eco Pass fee for all employees, and all employees would get a transit pass.

Metro’s current passes don’t lend themselves to innovative programs like University Passes or Eco Passes. By switching to Smart Pass, area businesses and universities could choose to give their groups a transit benefit at a reduced rate that still gets Metro the financial support it needs.

Sometimes when you’re looking for a big change, you can break it into smaller pieces and get each one done one at a time. Metro is already helping make Smart Passes a reality by putting the three legacy passes on Smartrip.

Remember that the final proposal is to have monthly passes on SmarTrip that work on rail or bus interchangeably, are valid for a fare amount chosen by the rider from a wide range of possible fares, and are available by subscription.

Metro is already working on various parts of this idea. They have already implemented the weekly bus pass on SmarTrip, and they’re working on a subscription option. The weekly bus pass is good for unlimited local bus trips or the first $1.50 of any other bus trip. That’s basically a weekly, bus-only Smart Pass with only one fare level available, at $1.50.

Metro is also working on moving the rail short trip pass to SmarTrip. The rail short trip pass is good for unlimited rail trips up to $3.25 during peak times, and for unlimited trips at all other times.  For trips over $3.25, you have to pay the extra. This is basically a weekly, rail-only version of a Smart Pass with only one fare level available, at $3.25. (It’s also what I’ll be subscribing to once these are available on SmarTrip if Metro doesn’t do Smart Passes).

Once these two passes are available with subscription on SmarTrip, the programming is pretty much done for two Smart Passes, except for two key changes:

• The passes should be interchangeable between rail and bus. For bus pass customers, being able to take rail trips too would improve mobility and let them take more efficient trips to get where they’re going. Rail pass customers would be encouraged to branch out and take bus trips on occasion. For trips with a transfer, the pass would pay for part or all of the trip after applying the normal transfer discount.
• The passes should be monthly, not weekly. This is for two reasons. One is for customer convenience. The other is to stabilize agency revenue. By requiring monthly purchase, customers are not as able to choose only their best weeks for buying passes, and are more likely to put passes on an autopilot subscription. The months with lots of trips will balance the months with fewer trips, and Metro’s revenues will be better off than with weekly passes.

With those two changes, Metro would effectively be selling Smart Passes at the $1.50 and $3.25 fare levels, which would serve a large fraction of the ridership better than we do today. Then, Metro can later introduce other passes at intermediate and higher fare levels, and then the full array of possible fare levels, from the $0.75 level for discounted bus up to $6.20 for the most expensive rail and bus transfer trip.