PROSPECTS FOR DIFFERENTIAL TRANSIT PRICING IN THE UNITED STATES

For several decades, planners and economists have been urging public transportation agencies to adopt fares that vary by either the cost of providing service or by the value or benefit of the service to the user. It has been argued that differentiated fares would be both more efficient and more equitable than the more common practice of having a uniform fare level for all services at all times. Although many transit agencies have some form of fare differentiation, few have adopted a fare differential that is near the variety or extent of those that have been recommended. This research was designed to better understand the reasons for adoption or nonadoption of fare differentials, and the factors that might lead to changes in the future. A self-completion questionnaire on transit fare attitudes and opinions was completed by 165 transit professionals representing 63 U.S. transit systems (including all 44 of the largest systems). Respondents overwhelmingly expressed support for a wide range of fare differentials. However, they balanced this support with pragmatic concerns about the adequacy of their analytical tools to provide the necessary policy guidance, the marketability of more complex structures, and the ability of their fare collection systems to adapt to such structures. Prospects for increased application of differential transit pricing will depend on the following: (a) making certain that differentiated fares are appropriate to the local setting; (b) improving analytical tools to accommodate a range of fare differentiation options while providing timely, policy-relevant, and conclusive findings; and (c) improving the technology of fare collection equipment to adapt to more complex fare structures without creating operational problems. All three areas are amenable to continued research and development.