Will RTD Secure the Funds to Make Transit Fares Fairer for Low-Income Riders?

So far the agency is not pursuing new funding streams to make its fare structure more equitable.

Photo: David Sachs
Photo: David Sachs

If RTD is going to offer discount fares to low-income riders, it won’t be free. But the agency is not seeking the funding necessary to pay for such a program.

Advocates have long called for a fare discount for low-income riders, pointing out that more affluent riders already benefit from bulk discounts. The RTD Pass Program Working Group is looking at how to revise the agency’s complicated bulk transit pass program with an eye toward fairness, and has orders not to exceed the agency’s budget for subsidizing passes.

Last week, a consultant for the working group roughly outlined what the effect of three new bulk fare structures under consideration might be [PDF]. A discount for low-income riders would lead them to make more transit trips, while corresponding reductions in bulk discounts would lead other demographics to ride transit less, according to modeling by Four Nines Technologies.

Overall revenue would be lower in each scenario, but the scale of the effect was not disclosed.

“One of the things that the working group is going to figure out through this process of passenger discounts is that there is a cost associated with those discounts,” said Michael Washington, RTD’s transit equity manager and the project lead. “So if you’re saying you want discount products, you’re ultimately saying that you want to reduce revenue.”

No one was under the illusion that a new discount would cost nothing. But advocates for low-income riders say the agency should be taking an active role in securing the necessary funds to pay for it. RTD did not support a bill that would have raised $10 million for low-income transit passes when it came before a legislative committee at the Capitol earlier this month.

The decision to stay on the sidelines bewildered 9to5 Colorado, an organization that has advocated for a half-price fare for low-income residents for years. “From our understanding the Pass Program group has not taken responsibility for actually acquiring the funds — it was… created to structure the programs,” 9to5 reps wrote in a letter to RTD. “This is why it is so difficult for us to understand why RTD wouldn’t be the strongest advocate for this bill.”

Currently RTD sells discount passes in bulk to businesses, colleges, and neighborhood groups. They all have an interest in maintaining their preferential prices. In addition, more than half of RTD’s fare revenue comes from these passes — especially the ones for businesses and schools — so the agency is reluctant to change them.

The working group's marching orders. It's hard to imagine transit passes being more accessible to more people without a new revenue stream. Image: RTD
The working group’s marching orders. It’s hard to imagine transit passes being more accessible to more people without a new revenue stream. Image: RTD

The working group has narrowed the options for a new discount fare structure down to three scenarios, labeled B, C, and E. All include half-price fares for low-income riders with some reduction in other discounts to partially offset the costs.

RTD would lose revenue in every scenario, according to the model, but the presentation did not reveal the size of the effect on ridership or revenue. That information is expected to be released at the working group’s next meeting.

Here’s a look at the three options under consideration.

“Option B” creates a 50 percent discount for low-income riders while eliminating the college and neighborhood EcoPass programs. The business EcoPass would be retained, but instead of buying unlimited passes, businesses would pay per trip at a discount:

Screen Shot 2017-11-20 at 11.48.24 AM

A similar option would keep the business and college passes, but change both of them from unlimited passes to per-trip discounts:

Image: RTD
Image: RTD

The third option keeps unlimited ride passes for the business, college, and neighborhood programs, but the prices would rise. In addition, a new $5 per card fee would be assessed on businesses. This scenario also includes discount pass for youth as well as the half-price fare for low-income riders:

Image: RTD
Image: RTD

The 26-person working group, which includes heavy hitters from the business sector, housing and transit advocates, transportation planners, and government decision-makers, will recommend changes early next year.

  • TakeFive

    RTD did not support a bill that would have raised $10 million for low-income transit passes when it came before a legislative committee at the Capitol earlier this month.

    Wait… Are we talking about the State legislature? What has the State to do with Denver RTD? Was this to be a state program? To the best of my knowledge the State doesn’t want to be in the transit business other than what may be required of CDOT. This smells like one of those silly proposals that is DOA. Congressional House Republicans are notorious for doing these stupid Bills that are DOA when they get to the Senate.

  • John Riecke

    So every option results in an overall loss of ridership. I can’t see that this is a good thing.

  • JZ71

    For at least two decades, RTD’s fare structure has become increasingly complicated, as more “players” have devised new schemes to carve out discounts for various, often tiny, slices of the ridership. Bottom line, if you know how to “work the system”, and are willing to put in the effort, you can usually, eventually, figure out how to score some sort of discount. Neighborhood discounts in Boulder? Based on some sort of hardship?!

    It would be very interesting to see if other, similar-sized properties, offer the same array of discounts and pass programs that RTD does. It would also be interesting to know the history behind each of the current programs. I do know that the student pass program was implemented in the early 2000’s as a way to expose students to transit, and to, hopefully, create future transit users. Has there been any follow-up? To see how many student pass users are still using transit, 10 or 15 years later? Or, is there just the typical governmental-program-inertia, where once a program is in place, it’s nearly impossible to “kill” it?

    The biggest discount is already in place and benefits every rider on every trip. It’s the 85%+ taxpayer subsidy, that even full fare riders receive. What’s left is the remaining 15%, the fares everyone pays, in one form or another. In theory, all the eco-pass programs should be revenue-neutral, with total pass revenues matching the number of trips taken. In reality, a lot of time is spent chasing the statistics, while the employers, institutions and neighborhoods continue to see only a fraction of their members taking advantage of the programs.

    My thought is that RTD needs to simplify its fare structure, not further complicate it. Eliminate ALL group-based pass programs. Offer two fare levels, full fare and half fare, with half fare available to a) the disabled, b) riders 16 and younger and c) riders with some form of documented financial need, period. (Over 65 does not equal poor, and that population is growing rapidly.) Offer a monthly pass, with a 10% discount, and a stored value card, with a 5% discount. Offer a daily pass for the cost of 3 fares. And simplify the whole fare boundary system. Yes, the District is huge, but how many riders actually travel long distances? Enough to warrant charging them multiple fares? Or, would a $3.00 (or $3.50 or $4.00) base fare, to go anywhere, generate the same revenues?

    Bottom line, there will be no easy answers. ANY changes will negatively impact some riders (and they will scream about how unfair it is – “life ain’t fair”!). LA has a Rider Relief program that helps low-income riders – it may be worth looking into: https://www.metro.net/projects/rider_relief/ Employers can buy or subsidize passes for individual riders, instead of being forced to buy passes for all employees. But overall, RTD needs to embrace KISS, not add another layer of complexity!

  • Emmeaki

    Why can’t they make an unlimited weekly pass like every other major city I’ve lived in? If you don’t make a lot of money, $99 for a monthly pass is a lot to drop at one time. A weekly unlimited.pass for X amount dollars per week would be more affordable. Also, $2.60 is such an awkward fare price. It sucks if you have to deal with nickels or dimes to make 60 cents instead of just having the fare at an even 50 cents.

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