CHAIR & MEMBERS VICTORIA REGIONAL TRANSIT COMMISSION December 8, 2015 SUBJECT: 2016/ /19 FARE STRUCTURE

Transcription

1 CHAIR & MEMBERS VICTORIA REGIONAL TRANSIT COMMISSION December 8, 2015 #6 SUBJECT: 2016/ /19 FARE STRUCTURE PURPOSE The attached report summarizes the evaluation of the proposed fare options and is presented to the Victoria Regional Transit Commission ( the Commission ) to support APPROVAL of a fare structure for the period April 1, 2016 to March 31, BACKGROUND At the September 15, 2015 meeting, the Commission approved an evaluation methodology along with three proposed fare structure options for the upcoming three-year period. The methodology comprised three components: quantitative analysis, qualitative analysis and public consultation. The quantitative analysis examines the impacts of the fare structure on fare revenue, ridership and average fare. The qualitative analysis assesses how well the proposed structure achieves the key objectives of the Commission s fare strategy. The public consultation gauges the level of public understanding and support. DISCUSSION Public consultation was undertaken from October 1 to November 5, This consultation included an online survey, a public open house, as well as telephone, mail and feedback. In response to feedback from the public, a fourth fare structure option has been developed for review and discussion by the Commission. Upon approval of a new fare structure, BC Transit will ensure it is successfully implemented on April 1, 2016 and incorporated into the 2016/17 budgets. This will include preparing and printing new fare products, advertising the new fare structure, creating on-board signage for buses and providing any necessary training for Transit Operators and customer service staff. This will take approximately three months, and an update on the progression of this implementation will be given to the Commission at the meeting on February 23, RECOMMENDATION It is recommended that the Victoria Regional Transit Commission APPROVE a fare structure for the period April 1, 2016 to March 31, 2019 that best aligns with the evaluation methodology. Respectfully, Manuel Achadinha, President and Chief Executive Officer Attachments: Victoria Regional Transit System Fare Structure Evaluation 1

2 VICTORIA REGIONAL TRANSIT SYSTEM FARE STRUCTURE EVALUATION Proposed Fare Structure Options The following provides a summary of the three fare options approved by the Commission for review and public consultation. Appendix A provides more detail on the three options. Option 1: $3.00 Cash Fare Retains the current fare structure. With the exception of adult monthly passes, all fare types increase to maximize transit user contributions. Paper transfers are retained. Option 2: Simplified There are no changes to the cash fare, day pass, adult monthly passes or paper transfers. Senior/youth pass and multi-month youth pass fares would increase. The discount ticket would be eliminated to reduce the risk of age-based disputes, leaving a single ticket fare. Option 3: Simplified II Similar to Option 2, but with the following differences: paper transfers would be removed to reduce potential Transit Operator conflict and Day Passes would be made available for purchase on the bus. Associated policy changes Options 1 and 2 would have no impact to the existing process of purchasing fare products and boarding the bus. However, the removal of paper transfers in Option 3 would trigger a change in how Day Passes would be purchased. Currently, Day Passes are purchased from vendors. Option 3 would see Day Passes purchased exclusively on the bus. This will be done in two ways: 1. Paying $5.00 cash into the farebox; 2. Submitting two tickets into the farebox ($4.50). In both instances, the Transit Operator would give the customer a proof of purchase which would allow that customer to ride all day on the Victoria Regional Transit System. This new process is illustrated in Figure 1: Figure 1: Revised Day Pass Purchase Process (Option 3) The current Day Pass product would be discontinued and, prior to April 1, 2016, education would be provided on the new process to customers and vendors. QUANTITATIVE ANALYSIS The impacts of the three fare structures on fare revenue, ridership and average fare were examined. Given the typically inverse relationship between fare revenue and ridership, average fare is used to determine the ranking. The results of this analysis are summarized in Table 1: 2

3 Table 1: Quantitative Analysis of Proposed Fare Structures Metric Base Budget Option 1 Option 2 Option 3 Projected annual revenue $32,469,059 $35,476,024 (+9%) $33,357,637 (+3%) $33,744,137 (+4%) Projected ridership 22,523,400 21,521,023 (-4%) 22,116,453 (-2%) 22,411,332 (-0%) Projected average fare $1.44 $1.65 (+14%) $1.51 (+4%) $1.51 (+4%) Notes/assumptions: 1. Revenue and ridership projections exclude BC Bus Pass 2. All calculations are based on Simpson-Curtin rule 3. Projections account only for changes in fares. Any other changes, e.g. service changes may affect these projections 4. Impacts on revenue/ridership are for Year 1 only. Growth projections for Years 2 & 3 are as per annual budgets All three options project increases in annual revenue and decreases in ridership. Option 1 forecasts the largest annual revenue and average fare increases; however, it also includes the largest decrease in annual ridership. Options 2 and 3 see very similar increases in revenue and average fare, with Option 3 projecting the greatest ridership retention. QUALITATIVE ANALYSIS Four objectives were used to evaluate the options with each fare structure being assigned a score ranging from +2 (strongly positive) to -2 (strongly negative). For example, when answering the first question in the Marketable objective, if a fare option was much easier to produce and package than the existing fare structure, it would receive a +2. If it was a little easier, it would receive a +1. If it was the same, it would receive a zero. If it was a little more difficult, it would receive a -1. And if it were much more difficult to produce and package, it would receive a -2. The evaluation criteria and the results of the analysis are outlined in Table 2: Table 2: Qualitative Evaluation Criteria and Results Qualitative Evaluation Yes, strongly: +2 Yes, slightly: +1 Neutral: 0 No, slightly: -1 No, strongly: -2 Objective 1: Attractive to Customers and Encourages Ridership (Weight: 25%) Compared to the existing structure, is the new fare structure Option 1 Option 2 Option 3 Easier for customers to understand, buy and use? More consistent with BC Transit Guidelines? Priced fairly and equitably? Total Objective 2: Marketable (Weight: 25%) Compared to the existing structure, is the new fare structure Easier to produce and package? Easier to transition to a more streamlined fare collection strategy? (e.g. mobile technology) Easier for vendors to understand, promote and sell? Total Objective 3: Low Costs of Operation and Debt Service (Weight: 25%) Compared to the existing structure, does the new fare structure Reduce ongoing fare collection and administration costs? Promote timely and efficient boarding? Increase the sale of pre-paid products?

4 Total Objective 4: Secure - safety and fraud (Weight: 25%) Compared to the existing structure, does the new fare structure Decrease the risk of operator assaults and/or security incidents? Reduce the risk of fraud? (e.g. age-based, transfer-based) Reduce subjectivity during fare payment validation? Total Grand Total In terms of qualitative criteria, Option 3 scored the highest, with Option 2 second. The score of zero for Option 1 was expected given the actual fare structure is identical to the existing structure. Option 3 reduces the number of fare products, thus making the fare structure both easier to produce and sell. A simplified structure also means that any future fare collection technology will be easier to implement. The high score for Option 3 in the fourth objective is attributable to the elimination of discount tickets and paper transfers, which will reduce subjectivity during fare validation, and consequently the risk of operator assaults and fraud. PUBLIC CONSULTATION Public consultation for the fare review was undertaken October 1 to November 5, This consultation included an online survey, a request for feedback via , telephone, mail and an open house at BC Transit head office. It was promoted on the BC Transit website, through the distribution of 15,000 flyers on buses throughout Victoria, media releases (leading to two newspaper articles), campaigns, social media campaigns and conversations with the public on the Transit Future Bus at the Biketoria Summit on November 1, The volume of responses received was the highest ever for a fare review in Victoria. Table 3 provides a summary of the responses by channel: Table 3: Public Consultation Response Summary Consultation Method Responses/Comments Online Survey 3, Telephone 39 Mail 23 Open House 22 (attendees) Total 3,299 Overall, the public preferred Option 2. The fare increases in Option 1 were seen as undesirable, as was the removal of paper transfers in Option 3. Note on Option 3 During the public consultation, it became clear that the associated policy change of selling Day Passes on the bus as part of Option 3 was not fully realized and/or understood by the public. This may have impacted the results of the public consultation. Transit Operators Given their role in the transaction and validation process, Transit Operators were also asked their opinion on the three options presented to the public. The results of the operator survey 4

5 were very different, with the vast majority voting for Option 3, given its potential for reducing the risk of conflict. Table 4 summarizes the support received for each fare option through the various forms of public consultation: Table 4: Summary of Votes Received in Public Consultation Form of Consultation Option 1 Option 2 Option 3 Public Online Survey (Question 7) 497 2, Operator Survey (Question 4) Telephone Mail Total 512 2, Summary of What Was Heard BC Transit received more than 2,000 comments, in addition to conversations at the Open House. While the wording of these comments varied, several key themes emerged. The most common types of comments, along with examples, can be seen in Table 5: Table 5: Summary of Comments Received in Public Consultation Theme of Comment Don t like fare increases for seniors and youths Negativity around removal of transfers Fares are too expensive Don t like any of the options Examples Increase for senior monthly means I won't ride as often Monthly senior pass should stay the same Youth pass increase is too high Eliminating transfers penalizes people needing 2 buses If transfers are eliminated then sell day passes on the bus None of these are great, fares are high enough already Raising fares/losing transfers makes riding the bus too expensive $3 is too high Fare increases seem unfair Don't like any of the options but was forced to pick None of the options are user friendly Oppose all options Appendices B and C provide more detailed examination of the findings of the public consultation and operator survey. A physical copy of survey comments, s and mail will be available to Commission members at the meeting on December 8, SUMMARY Table 6 summarizes the overall results of the evaluation process: Table 6: Evaluation Summary Evaluation Method Option 1 Option 2 Option 3 Quantitative (average fare) $1.65 (+14%) $1.51 (+4%) $1.51 (+4%) Qualitative Public consultation (Question 7) 17% 72% 10% Each of the three fare options scored highest in one of the evaluation methods. Quantitatively, Option 1 scored highest, with the highest average fare of the three options. Qualitatively, Option 5

6 3 scored highest, primarily due to the simplicity and security of the fare structure. It also ranked highest in terms of the Transit Operators survey. Option 2 was the preferred choice of the public survey respondents. ALTERNATIVE FARE STRUCTURE OPTION One of the key objectives of a revised fare structure was increased security and simplicity. At the same time, the most common themes received during public consultation were negativity around the increase to senior/youth fares, removal of paper transfers and the perceived high cost of fares in the Victoria Regional Transit System. Given these factors, an alternative option was developed for consideration by the Commission. This option seeks to improve the security and simplicity of the fare structure while reflecting the public feedback and conversations with advocate groups around the fare increases to seniors and youths. Alternative Fare Structure Option 4 The alternative fare option limits the fare increase to seniors and youths. Under this option, the suggested fare increases for discount monthly passes would be more modest, with an increase of $2.50 per month. As part of this option, the multi-month Youth Pass would be discontinued to further simplify the fare structure, provide equality between different age groups and reduce administration costs. In alignment with option 3 discount tickets and paper transfers are eliminated. Day Passes would be available to purchase on the bus, either for $5.00 cash or in exchange for two tickets ($4.50). The alternative option is summarized in Table 7: Table 7: Comparison of Fare Structures Fare Product Existing Fare Option 1 Option 2 Option 3 Option 4 (ALTERNATIVE) Cash $2.50 $3.00 $2.50 $2.50 $2.50 Day Pass $5.00 $6.00 $5.00 $5.00 $5.00 Tickets (10) Adult $22.50 $27.00 $22.50 $22.50 $22.50 Tickets (10) Discount $15.00 $23.00 $22.50 $22.50 $22.50 Monthly Pass Adult $85.00 $85.00 $85.00 $85.00 $85.00 Monthly Pass Discount $45.00 $65.00 $52.00 $52.00 $47.50 Youth Pass (6-12 months) $35.00 (per month) $55.00 (per month) $52.00 (per month) $52.00 (per month) n/a Paper Transfer 60 minutes, one direction. 60 minutes, one direction. 60 minutes, one direction. All other fare products (e.g. U-PASS, Pro Pass, HandyDART) remain as presented in Appendix A No transfers No transfers Quantitative Analysis The impact of the alternative fare structure on fare revenue, ridership and average fare is summarized in Table 8: Table 8: Quantitative Analysis on Alternative Option 6

7 Metric Base Budget Option 1 Option 2 Option 3 Option 4 (ALTERNATIVE) Projected annual revenue $32,469,059 $35,476,024 (+9%) $33,357,637 (+3%) $33,744,137 (+4%) $33,545,412 (+3%) Projected ridership 22,523,400 21,521,023 (-4%) 22,116,453 (-2%) 22,411,332 (-0%) 22,527,018 (+0%) Projected average fare $1.44 $1.65 (+14%) $1.51 (+4%) $1.51 (+4%) $1.49 (+3%) Option 4 is projected to increase revenue by three per cent per annum, higher than Option 2 but slightly lower than Option 3 as a result of the more modest increases to discount monthly pass prices. Ridership under this option is projected to increase slightly, partly due to the increased number of passenger trips projected as a result of removing transfers, and partly due to a more modest increase to discount pass products. Qualitative Analysis The qualitative results, including the alternative option, are presented in Table 9: Table 9: Qualitative Evaluation Results Qualitative Evaluation Yes, strongly: +2 Yes, slightly: +1 Neutral: 0 No, slightly: -1 No, strongly: -2 Objective 1: Attractive to Customers and Encourages Ridership (Weight: 25%) Compared to the existing structure, is the new fare structure Option 1 Option 2 Option 3 Option 4 Easier for customers to understand, buy and use? More consistent with BC Transit Guidelines? Priced fairly and equitably? Total Objective 2: Marketable (Weight: 25%) Compared to the existing structure, is the new fare structure Easier to produce and package? Easier to transition to a more streamlined fare collection strategy? (e.g. mobile technology) Easier for vendors to understand, promote and sell? Total Objective 3: Low Costs of Operation and Debt Service (Weight: 25%) Compared to the existing structure, does the new fare structure Reduce ongoing fare collection and administration costs? Promote timely and efficient boarding? Increase the sale of pre-paid products? Total Objective 4: Secure - safety and fraud (Weight: 25%) Compared to the existing structure, does the new fare structure Decrease the risk of operator assaults and/or security incidents? Reduce the risk of fraud? (e.g. age-based, transfer-based) Reduce subjectivity during fare payment validation? Total Grand Total

8 Option 4 ranks first in terms of qualitative score. The scores are identical to Option 3, with the exception of Objective 3. The Youth Pass currently places significant administrative pressure on BC Transit during peak demand periods (typically September), resulting in overtime expense. Removing this cost increases the score in Objective 3. OVERALL SUMMARY The public consultation process identified issues/concerns with the three proposed options. The alternative option, presented as Option 4, addresses the key concerns raised through consultation relating to senior and youth pricing and the potential to reduce conflict by eliminating paper transfers. It is projected to retain the highest ridership, scores highest in the qualitative evaluation and most closely meets the approved fare strategy objectives. 8

9 APPENDIX A: FARE STRUCTURE OPTIONS Fare Product Existing Fare Option 1 Option 2 Option 3 Conventional Cash $2.50 $3.00 $2.50 $2.50 Day Pass $5.00 $6.00 $5.00 $5.00 Tickets (10) Adult $22.50 $27.00 $22.50 $22.50 Tickets (10) Discount $15.00 $23.00 $22.50 $22.50 Monthly Pass Adult $85.00 $85.00 $85.00 $85.00 Monthly Pass Discount $45.00 $65.00 $52.00 $52.00 Youth Pass (6-12 months) $35.00 (per month) $55.00 (per month) $52.00 (per month) $52.00 (per month) Pro Pass $72.96 per month $72.96 per month $72.96 per month $72.96 per month U-PASS $85.00 per four month semester $85.00 per four month semester $85.00 per four month semester $85.00 per four month semester Child FREE FREE FREE FREE Transfer 60 minutes, one direction 60 minutes, one direction 60 minutes, one direction No transfers HandyDART Cash $2.50 $3.00 $2.50 $2.50 Tickets (10) $22.50 $27.00 $22.50 $22.50 Monthly Pass $85.00 $85.00 $85.00 $85.00 Definitions Adult All passengers unless able to demonstrate otherwise All passengers unless able to demonstrate otherwise All passengers unless able to demonstrate otherwise All passengers unless able to demonstrate otherwise Discount 6-18 years of age and 65+ years of age 6-18 years of age and 65+ years of age 6-18 years of age and 65+ years of age 6-18 years of age and 65+ years of age Youth 6-18 years of age 6-18 years of age 6-18 years of age 6-18 years of age Child 5 years and under 5 years and under 5 years and under 5 years and under 9

10 APPENDIX B: PUBLIC CONSULTATION RESULTS Question 1: Which age group do you fit in? The majority of respondents were aged between (79 per cent). People in this age range would typically be required to pay adult fares when boarding the bus. This breakdown is similar to the fare buying habits that BC Transit sees and so can be seen as representative. This is illustrated in Figure 2: Figure 2: Results of Question 1 Question 2: How do you usually pay your transit fare? The results of this question can be seen in Figure 3 below. 80 per cent of respondents travel primarily using cash (21 per cent), tickets (38 per cent) or monthly pass (21 per cent). This number differs to the breakdown of ridership we typically see from the three primary fare types in this fare review. This is evidenced in the graph in Figure 4 below. Notably, cash and tickets were more represented in the survey than they are in overall ridership. Cash and tickets typically account for approximately 24 per cent of ridership combined, which is materially below the levels observed in the survey. This shows that those most affected by the potential option of removing transfers, i.e. cash and ticket users, responded at a rate highest compared to their ridership levels. Conversely, the fare type with the highest ridership, adult monthly pass, can be seen as underrepresented in the survey. These riders would be unaffected by the three options. Figure 3: Results of Question 2 10

11 Figure 4: Proportion of Ridership Compared to Respondents Question 3: How many buses do you board to complete your most common trip (oneway)? The most common response here was two buses, with slightly more than half of respondents selecting this option. 42 per cent of respondents take one bus, with just seven per cent taking three or more buses to complete their most common one-way journey. Survey responses are illustrated in Figure 5 below. For reference, the proportion of ridership we typical see using a paper transfer is approximately 15 per cent. Figure 5: Results of Question 3 Question 4: Which of the three proposed fare options do you feel is priced most fairly and equitably? Of the respondents, 72 per cent believe that Option 2 is priced most fairly and equitably, with 18 per cent feeling that Option 1 is most fair and equitable, and ten per cent voting for Option 3. This is illustrated in Figure 6: 11

12 Figure 6: Results of Question 4 Question 5: Which of the three proposed fare options do you feel is easiest to understand and use? 68 per cent believe that Option 2 is the easiest to understand and use, 19 per cent feel that Option 1 is easiest to understand and use, and 13 per cent chose for Option 3. These results are similar to Question 4, with the majority of respondents choosing Option 2. This is illustrated in Figure 7: Figure 7: Results of Question 5 Question 6: Which of the three proposed fare options do you feel is least likely to lead to fare disputes and transit operator conflict? Responses to this question showed a material variance to the responses in Question 4, 5 and 7, which were all relatively similar. This question saw a much lower proportion of respondents choosing Option 2, although at 57 per cent it was still the most popular option. Respondents appeared to acknowledge that Option 3, specifically with the removal of transfers, would assist in reducing operator conflict and fare disputes. This is illustrated in Figure 8: 12

13 Figure 8: Results of Question 6 Question 7: Overall, which of the three proposed fare options do you prefer? 72 per cent indicated that they prefer Option 2 out of the three options presented. 17 per cent prefer Option 1 and ten per cent prefer Option 3 (does not add up to 100 per cent due to rounding). Looking deeper, cash/ticket users showed more of a preference to Option 2 than the overall respondent base, likely because they are most impacted by Options 1 and 3 through the price increases (Option 1) and removal of paper transfers (Option 3). It should also be noted that for all four questions, cash/ticket users were less in favor of Option 3, by an average of two per cent, than the overall respondent base. This trend was replicated in all four questions by youths and seniors by an average of one per cent less. At the same time, youths and seniors more strongly favored Option 1, by an average of four per cent more than the overall respondent base. The opposite trend was seen in adult monthly pass riders. In general, they were more inclined to see Option 3 as preferable, with 15 per cent preferring this option, compared to ten per cent overall. This is illustrated in Figure 9: Figure 9: Results of Question 7 13

14 Question 8: Do you have any additional comments? 1,885 comments were received. The key themes arising from the comments were negativity around the fare increases for seniors and youths, negativity at transfers being removed, and a general displeasure at a rise in the price of fares. Several respondents noted that they do not like any of the three options presented. Looking at the general sentiment of the comments received, four per cent were positive, 71 per cent were negative and 25 per cent were neutral s were received from the public. Of these s, six per cent can be categorized as having an overall positive sentiment, 72 per cent having a negative sentiment and 22 per cent neutral. While respondents were not asked which option they preferred, two respondents noted that they preferred Option 1, 28 noted that they preferred Option 2 and four preferred Option 3. Telephone 65 voice messages were received from the public. Of these messages, eight per cent can be categorized as having an overall positive sentiment, with 56 per cent having a negative sentiment and 36 per cent neutral. Five respondents voiced that they preferred Option 1, and 12 noted that they preferred Option 2. Option 3 was not mentioned. Mail 23 pieces of mail were received. The overall theme of the responses was very similar to that seen in other forms of feedback. There was a general dislike to the idea of removing paper transfers, as well as the fare increases for seniors. One respondent wrote that they preferred Option 1, seven noted that they preferred Option 2 and two preferred Option 3. Open House An Open House was held at the BC Transit head office on November 5, 2015 from 3-6pm. Members of the public were invited to speak to BC Transit staff to give their thoughts on the proposed fare structures. 22 people attended, with the majority being seniors. Overall, the most common conversation related to displeasure around the fare increases for seniors. The potential removal of transfers was also discussed by several attendees. 14

15 APPENDIX C: OPERATOR SURVEY RESULTS Question 1: Which of the three proposed fare options do you feel is priced most fairly and equitably? Transit Operators responded much differently to the general public, with 70 per cent choosing Option 3, compared to ten per cent of the public. Figure 10: Results of Question 1 Question 2: Which of the three proposed fare options do you feel is easiest to understand and use? The Transit Operators again responded much differently, with 77 per cent choosing Option 3 and just 18 per cent choosing Option 2. Figure 11: Results of Question 2 15

16 Question 3: Which of the three proposed fare options do you feel is least likely to lead to fare disputes and transit operator conflict? Again, the response from the Operators was materially different to the general public, with a strong response for Option 3. Figure 12: Results of Question 3 Question 4: Overall, which of the three proposed fare options do you prefer? The response from Operators was similar to the previous three questions, with the majority preferring Option 3, compared to Option 2 for the general public. Figure 13: Results of Question 4 Operators were not asked to provide comments, and as such, most did not, with just nine comments received. The most popular comment related to the sale of day passes on the bus. 16