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

November 6th, 2014

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).

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  1. Stephen
    November 6th, 2014 at 16:18 | #1

    Thanks for highlighting this. It’s great to see some ex post facto calculating of how the transit-benefit change might be affecting ridership.

  2. MLD
    November 7th, 2014 at 09:54 | #2

    The detailed summary PDF is great. It would be great to see more analysis like this in the future. Or to have monthly excel reports of entries/exits so people could do their own analysis!

  3. MLD
    November 7th, 2014 at 09:56 | #3

    It also looks like stations along the Red line in NW have seen declines – would be interesting to see if bus ridership has grown in those areas.

  4. Michael
    November 7th, 2014 at 10:08 | #4

    Thanks for the feedback, Stephen and MLD.

    MLD, we’ll try to include more regular ridership analysis here on the blog, and include data downloads as well.

  5. Vinnie
    November 7th, 2014 at 12:38 | #5

    An argument to consider —

    What you’ve shown rather convincingly is that the decline in ridership is due to suburban-to-core commuters during peak commute time and direction, and that this is concentrated within longer-distance commuters who use SmartBenefits (those who receive transit subsidy from work).

    However, this is not necessarily due to the decline of the benefit — it may just be that SmartBenefit users are more likely to choose other ways of commuting than other riders. Their chocie of another mode could just as easily due to increasing fares (so they decide driving or the bus is a cheaper alternative), or due to a decrease in service reliability (so they decide driving or the bus is a better alternative).

    There’s one piece of evidence pointing to the likelihood of these possibilities — the AM peak entry drops appear to be concentrated on the DC stations of the western Red Line branch and all the Green Line stations east of the river.

    Honestly, I’m trying to be constructive. There’s an easy way to strengthen your argument — when did the May-to-May decline occur? If the year-over-year declines started January or later, you have a pretty solid case.

    If instead they started after a fare increase, or after a particularly bad week on either the Red or Green line, perhaps its time for Metro to consider the consequences of fare policies and service quality.

  6. Michael
    November 10th, 2014 at 11:29 | #6

    Hi, Vinnie:

    We did look at year-over-year changes and there was a big drop in January of 2014 vs the previous year. We are in the process of developing a survey that should help provide confirmation of the primary conclusions of this analysis and we’ll keep everyone posted with what we find.

  7. Justin
    November 10th, 2014 at 12:47 | #7

    Great points, thanks for the feedback Vinnie. On your first point, I agree – but what would your theory be on why SmartBenefits users are more likely to choose other modes compared to non-SmartBenefits users? Across many dimensions – for the exact same trip, fare, and service experienced, the non-benefit users remain stable, while the benefit users are supplementing and traveling less.

    And yes, the changes began pretty distinctly in January – we just kept things month-over-month to control for seasonal effects.

    Thanks again, and stay tuned!

  8. Vinnie
    November 10th, 2014 at 17:05 | #8

    Thanks for the responses! Makes sense to pinpoint at the SmartBenefits cap if the big dropoff happened in January.

    @Justin — your case was made pretty well that it was traditional, peak hour weekday commuters that had the dropoff, but the Smartbenefits were also an outlying group, and your theory was that it had to do with the benefit cap.

    I’d suggest that perhaps the SmartBenefits group is just more price-sensitive in general. My thought was that fares increasing in general may be pushing those with access to other options off of MetroRail. Looking at the geographic distribution of the decline, this could be the case — stations with nearby (or adjacent) MARC/VRE service, or parallel MetroBus service to downtown, appeared to be more likely to experience morning boarding declines than other stations at a similar distance, at least from a cursory glance.

  9. November 10th, 2014 at 18:29 | #9

    Interesting research. Has WMATA considered adjusting fare schedules to increase the cost of short trips (many of which are fully subsidized) and lowering the cost of long trips (which see not) to take advantage of the kink in the demand curve?

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