Pinching Penny’s while Blowing Bucks

By Noel T. Braymer

I went to the Metrolink Board meeting in Los Angeles on June 14th largely because I had the day off. I expected the Board to approve the 5% Fare increase on the agenda. Still, going to this meeting was an educational experience.

I caught Metrolink 607 at 6:36 AM with a round trip ticket that included a TAP chip for a LA County EZ pass. We got held up at San Onofre by Metrolink 803 from San Bernardino and never recovered. We got held up again outside of Fullerton by an Amtrak train. Because of construction around Valley View Ave for the latest grade separation project in Los Angeles County there were slow orders. So even with padding we arrived about 5 minutes late off the scheduled arrival. That still gave me an hour and 15 minutes before the 10 AM start of the Metrolink Board meeting in the Metro Boardroom at the LA Metro Headquarters by Union Station. The 6 car train had decent ridership but still plenty of empty seats. Fridays generally seem to be the lightest day of the work week on Metrolink.

Because of the proposed fare increases the public was invited to this meeting. In preparation for this meeting Metrolink’s staff had been collecting comments from the public and allowing people at the meeting to address the board on a single topic at a time for a maximum of 3 minutes although this time rule was not strictly enforced. Several of the same people spoke on different topics. The meeting agenda included the results of the community outreach to get public input about the fare increase. Before the meeting Metrolink had received 79 replies, including internet comments, public meetings (which had few attendees) phone calls and letters. Of these only one person supported the fare hike, 2 were neutral and the rest opposed different parts of the plan.

The board meeting was lightly attended. Most in the audience appeared to be staff members of government agencies or businesses related to transportation. Many of the people who spoke to the board during the meeting might be called gadflies. I didn’t speak since what is said by the “public” at meetings like this rarely has any impact on the final vote. I was pleased to discover that in the 125 page agenda for this meeting was a full 2 page copy of my May 23rd post on the RailPAC website about the fare hike “Metrolink: Raise Ridership Not Fares for More Revenue”. At least someone on the staff level was aware of what I had written.

There were 3 major actions before the board to vote on about raising fares. The first was a 5 percent general fare increase. This is expected to bring in $3.18 million towards closing what is now a $10.2 million dollar budget shortfall this year. Another proposed change was to the $10 Weekend Pass program to make it a $10 Weekend Day Pass. Most people who use this pass are only using it for one day and staff claims that Metrolink is losing money from people selling or giving away their passes to other people. Staff expects to gain $605,000 dollars this fiscal year with this change.

The area of most contention was the proposed changes to the Free Fare for Personal Care Attendants (PCA). Currently if a disabled person is medically deemed to need help to travel the helper can travel for free on Metrolink. There were proposals to charge the helpers either at full fare, a discounted fare or pay $25 dollars a year for a Metrolink ID card to register as a PCA. Staff’s contention was this policy was being abused to let people travel for free. The Board discussed this at length and put off a final decision until staff returned with a refined motion for the next board meeting. The money raised by charging PCA’s for ID badges was expected to bring in no more than $200,000. This reminded me of Parkinson’s Law of Triviality by C. Northcote Parkinson “The time spent on any item of the agenda will be in inverse proportion to the sum involved.”

In addition to this staff believes that Metrolink is losing $1.8 million dollars due to fare evasion. Starting by July 1st with the fare increase, Metrolink will aim to check every passenger’s ticket at least once including “Streetcarring passengers” which is checking passengers for tickets before they can enter the trains at Union Station. Doing this won’t cost any extra since Metrolink will use existing staff to step up ticket inspections. I can’t remember the last time my ticket was inspected on Metrolink. But if the fare evasion was so bad why has it taken so long to control it?  Staff hopes to reduce the $1.8 million dollars in revenue loss by half with stepped up ticket inspection.

These actions go against the purpose of self service or proof of purchase ticketing. By eliminating barriers on trains and buses they can be loaded faster saving time and increasing productivity. By making regular random ticket inspections fare evasion is controlled. In fact with proper fines catching fare evaders increases revenue above what it is if everyone was honest. This has worked all over the world. Any problem Metrolink or LA Metro claims they are having with fare evaders is not with self service ticketing but from their failure to properly enforce ticket inspections. By stopping almost everyone for their tickets like in the old days will reduce the productivity of their service and customer satisfaction.

So far these steps appear to reduce what was in April a $14.5 million shortfall but after belt tightening is now $10.2 million by no more than $5 million dollars. The member agencies controlling Metrolink will have to make up the difference. The problem with raising fares alone is that while it increases revenues, ridership goes down or ridership growth slows. Increased ridership can raise revenue while also increasing public support for rail service and increasing the value of having rail service.

Only raising fares and cutting service to balance budgets for rail service creates a slow death spiral. The best time to raise prices is when something is in short supply. Prices normally fall when there is too much of something. If the rush hour trains are crowded then raising fares make sense. But many of the trains are not crowded so these are most likely to lose ridership and could lose revenue even with the fare increase. The fact that few people responded for comments on the fare increase doesn’t show that people don’t care about spending more money. It suggests passenger are not attached to Metrolink service and will look for other alternatives rather than fight to keep Metrolink.

The $10 dollar weekend pass worked because it brought in passengers to fill up otherwise lightly used trains on the weekends. Ten dollars is 10 dollars more than nothing. It was a basic form of yield management which is used by airlines by discounting fares to fill up empty seats on airplanes. Until Metrolink has occupancy rates on their trains over 70 percent, they have room to sell more tickets at discount. What would be a good start is to extend Antelope Valley service trains to at least Orange County by combining existing trains. The cost of doing this is minimal. But the new markets created by this will bring in money and more passengers.

It seems that operational factors dominate the attention of rail service providers and that includes most other operators besides Metrolink. Most of the board meeting dealt with the boring nitty-gritty of contracts and insurance necessary to operate a rail service. But rail passenger service is a service. To attract fare paying riders a service provider needs to understand and respond to the needs of their market. To prosper services need more business to increase revenue with growth, not by squeezing more money from a small and shrinking market.

After the meeting I had lunch then tried out my Metrolink paper  TAP ticket on Metrorail . It seemed to work on the turnstiles  although tapping when transferring between rail lines  without turnstiles was a hassle. I wasn’t sure if the reader read my ticket sometimes and I didn’t want to wait and miss my train to find out. Coming home again on the train leaving at 3:20 PM had a decent load but wasn’t full by any means. We got held up as usual by Metrolink 808 out of Oceanside for San Bernardino at Sierra Siding. We can’t get more double track between Oceanside and San Juan Capistrano soon enough.


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