Innovations in Fare and Marketing Strategies

Transportation-Land Use-Environment Connection: Redefining, Reevaluating and

Reinventing Transit

Daniel FleishmanMultisystems, Inc.

Lake Arrowhead, CALake Arrowhead, CAOctober 15, 2001October 15, 2001

Lake Arrowhead, CALake Arrowhead, CAOctober 15, 2001October 15, 2001

Broader Context for Fare Policy and Marketing

Increase in environmental justice concernsChanging markets, new initiatives

New opportunities for partnerships Focus on seamless regional travel Market-based strategies

Electronic fare media facilitate new initiatives and strategies

Equity Concerns

Fare decision-making increasingly influenced by political/legal factors Concern re equal treatment of all groups Organized opposition or legal action against

proposed fare increases

Can define/limit fare structure changes Consent Decree in LA Very deep discount in Philadelphia Free transfers, weekly pass in Boston

Emerging Technologies Facilitate New Strategies

Electronic media seeing increased use Magnetic farecards (e.g., NYC, Chicago) Smart cards (e.g., Washington, Ventura Co.)

Electronic media facilitate new initiatives Subsidy arrangements Multiple application opportunities Regional farecard programs New payment options

Impact on fare policy

Partnership Opportunities

Fare/subsidy arrangements Social service agencies Universities Employers

Multiple application programs Other modes Non-transportation programs

Fare/Subsidy Arrangements

Social service programs Access-to-jobs programs EBT/transit arrangements

University programs U-Pass programs Reduced/free fares for students

Employer subsidy programs Distribution of transit benefit Annual pass programs (e.g., Eco Pass) Voucher programs

Multiple Application Programs

Transit and other modes Parking Toll

Transit and non-transportation applications Financial institutions/banks -- joint e-purse, add

value at ATM Joint transit-university card Joint transit-retail loyalty

programs

Focus on Seamless Travel

Travel patterns increasingly require use of multiple modes or agencies

Growing emphasis on multi-agency agreements and regional payment integration

Regional Payment Integration

Can involve common fare structure (e.g., regional pass, free or reduced transfers)

Farecard can carry stored value and be flash pass for other services

Regional farecard permits each agency to retain own fare structure, with common stored value

Market-Based Fare Strategies

Segment the market based on frequency of use and willingness to prepay

Offer range of payment options Unlimited ride passes (one-, two-, four-week) Discounted multi-ride options (tokens, tickets,

stored value farecards) Short-term passes (4-hr, 1-day, 3-day) Special passes/tickets (e.g., family pass)

Increased Flexibility with Electronic Payment

Stored value -- various forms of bonus/discount Purchase bonus Add-value bonus

Rolling passes 7-day, 14-day,

31-day -- activate on first use

partial day or 1-day -- sold on board

Increased Flexibility with Electronic Payment (cont.)

Automated fare differentials Distance-based/zonal Time-based (e.g., peak/off-peak)

Automated transfer discounts Between modes Between agencies

Emerging Electronic Payment Options/Features

Frequency-based discountsGuaranteed lowest fareGuaranteed last ride/negative balanceAutoload featuresAutomated download of benefitsPost payment

Marketing Strategies

Marketing based on level of prepayment and discounts “Choose how much

you want to save.” “How you save money

is your choice.”

Marketing Strategies (cont.)

Marketing based on range of options targeted to different market segments and travel needs Special payment options

for visitors (e.g., weekend or family passes)

Tie-ins with tourist attractions

Summary

Agencies facing growing demands and opportunities that affect fare structures

Agencies entering new types of partnershipsElectronic technologies facilitate new

initiatives and flexible new payment optionsAgencies introducing market-oriented

pricing strategies based on range of payment methods

Marketing is reflecting range of options and emerging markets