Posts Tagged ‘transit benefit’

How Metro’s Federal Customers Pay Fares, and Why It Matters (3 of 5)

November 30th, 2015 3 comments

Metro’s federal customers pay fares a little differently than other riders. Why is that such a big deal for Metro’s financial future? 

(Third in a series of posts on Metro’s Federal customers – see posts 1 and 2)

SmartBenefits Feds vs NonCompared to other riders, Metro’s federal customers are much more likely to pay their fare using SmartBenefits.  SmartBenefits are the type of funds you load onto your SmarTrip card – usually through your employer, either as direct subsidy, or a certain amount of pre-tax dollars you set aside for transit fares. Metro riders in the Washington region may know the program manager WageWorks.

 (Importantly, SmartBenefits is not exclusively a federal government benefit!  On the contrary, non-federal workers are nearly half the overall enrollment in the SmartBenefits program, and 42% of Metro’s overall ridership comes from riders paying with SmartBenefits.  We’ll make clear the difference between SmartBenefits and SmartTrip in an upcoming Metro 101 post – stay tuned.)

84% of federal employees on Metro pay their fare with SmartBenefits, compared to 27% of non-federal customers. In addition, federal customers tend to pay higher fares on rail – because federal workers typically take longer trips and ride more at peak times (average peak fare $3.00, vs. $2.87 non-federal customers).

Finally, 87% of Metro’s federal customers pay using “stored value” (pay-as-you-go funds), rather than a weekly or a monthly pass. Very few still use paper tickets or passes – but this is similar to other riders.

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Rail Ridership Down As SmartBenefits Run Out

January 12th, 2015 3 comments

Many Metrorail riders now run out of SmartBenefits mid-month, and they may stop riding.

Since the federal transit benefit maximum dropped from $240 to $130 per month, about 25%  of regular Metrorail commuters are running out of SmartBenefits to pay their fare before the month is over. By month’s end, trips paid for with SmartBenefits are now crashing by 40% over last year.  Though a variety of factors explain recent decreases in Metrorail ridership, the transit benefit is a strong explanation as to why the losses are concentrated in the second half of the month. In fact, the biggest influence on ridership over the past year may be the cut in the federal transit benefit, and ridership might even be up by about 2% otherwise.

If we look at trips per day over the span of the month, and only at trips over 7 miles paid for with SmartBenefits, we see the drop closely coinciding with when riders run out of SmartBenefits.   (Shorter trips can be fully funded by the current benefit amount of $130 per month.)

SmartBenefits_over_weekdays_in_a_month_v2

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The Drop in Transit Benefit Has Effectively Been a 20% Cost Increase for Metrorail Riders

November 6th, 2014 9 comments

The drop in the federal transit benefit is making Metrorail riders feel the pinch in their wallets, and it’s hurting ridership.

What’s happened to ridership since the benefit changed? You may have seen in the news that Metrorail riders have been heavily impacted by changes in federal tax law that discourages transit usage.  The maximum amount of SmartBenefits dropped from $240 to $130 per month in January, and since then:

  • Since the change, our traditional commuter market – full-fare customers who travel from suburban stations to the core at peak times – has fallen by about 1.5%.
  • Trips shorter than 4 miles – more likely to still be fully subsidized – are unchanged.
  • Customers able to get through the month on SmartBenefits alone are down 25%, while customers who must supplement with their own cash have doubled, and the net result has been a 10% loss in trips from this key commute market.
  • 75% of this ridership loss has been from trips over 7 miles: at an average fare of $4.10/trip equating to $165/month and up, these longer commutes now require substantial out-of-pocket contributions.
  • The average impacted SmartBenefits customer must now pay $0.84 extra per trip – this is the equivalent of a 20% fare hike.
    • For riders directly subsidized by the federal government, this was increase of nearly $2.40 per day, or over $54/month.
    • For riders setting aside pre-tax dollars, this felt like a 10% fare increase.
  • Trips paid for with SmartBenefits have dropped 1%.

Change in Ridership by SmartBenefits Class v2

The decrease in the federal transit benefit has hurt Metrorail ridership in the last year. Ridership is up from customers who are unaffected by the policy change, but more people must supplement with out-of-pocket contributions to make it through the month, and in the process Metrorail is losing trips.

How do you know it’s not something else? Ridership could be down for a variety of reasons, and we continue to mine the data for other patterns – from the economy to demographics to fares. We can’t pin all of the ridership loss on the federal transit benefit, but the losses have been concentrated on SmartBenefits users. In addition:

  • Ridership from commuters not enrolled in SmartBenefits has actually grown by 2% in the last year.
  • We are still investigating, but customers do not appear to be reducing travel much due to telework. Metrorail has been losing both customers and trips (not just trips), and trip frequency among commuters is mostly stable.
  • In fact, we are gaining riders at stations with recent transit-oriented development, and ridership is up 3% at stations along the Green Line in D.C., the Red Line in Northeast D.C., and Courthouse/Clarendon in Arlington.

We continue to study the trends, and for a second glance see our more detailed summary of ridership trends (PDF, 710K).