Rush hour fare idea (or why Presto is needed presto)

[Hipster Duck]

There is considerable research showing that ridership will decline much less if fares are raised by the same amount during rush hour versus at off-peak times. In economic terms, rush hour fares are therefore said to be much more inelastic than non-rush hour fares. That's fairly intuitive. So, what about if the TTC instituted rush hour pricing? Inbound morning and outbound evening peak hour trips would cost $3.25, while we could probably drop off-peak fares to $2.00 (or something like that). This achieves several things:

1) Unlike fare by distance, it doesn't penalize outer-416 commuters
2) It encourages a certain number of riders to offset their commuting time earlier or later, thus redistributing the load more evenly throughout the day. This means that the TTC doesn't have to operate/buy as much equipment to meet rush hour capacities
3) Since rush hour prices are relatively inelastic, we don't lose as much ridership as we would have if we would have increased fares uniformly throughout the day, even by a smaller amount.
4) Encourages weekend and non-commuter riders to take advantage of that lower fare outside of rush hour.

Of course, for something like this to happen we would need some sort of Smart Card technology. You know, like that Smart Card technology that has been "tested" since 2006 at a handful of stations where it can't make a dent? Seriously, why the TTC is dragging its feet with Presto is beyond me, since it could be the biggest shot in the arm for the system. Not only does it allow us to try innovative pricing policies, but it also allows for regional integration with other transit agencies, speeds up boarding on surface vehicles, can be used like a debit card (like Hong Kong's Octopus card) at local stores and people psychologically treat it as a fixed cost rather than an out-of-pocket cost and therefore use it more liberally (read: more revenue to the transit agency). Well, I digress.

 

[waterloowarrior]

I found this presentation helpful (on some of the US systems)

http://cta21.utc.uic.edu/Presentations/TransportChicago07/Matt Smith.pdf

 

[sjc]

>>>3) Since rush hour prices are relatively inelastic, we don't lose as much ridership as we would have if we would have increased fares uniformly throughout the day, even by a smaller amount.<<<

My suspicion would be that the more inelastic the rush hour price, the less the person in question is able to afford an increase in transit costs.

The 9-5 secretary needs to take the subway in rush hour, while more senior people may be more flexible in their hours.

This isn't always the case and some companies do allow for flexibility -- but many of the admin-level jobs can't easily be time-shifted. If you work in a store, you have to be there when the store is open, even if it would be more convenient for you to be there in the middle of the night.

 

[Disparishun]

In economic terms, rush hour fares are therefore said to be much more inelastic than non-rush hour fares. That's fairly intuitive.

(...)

1) Unlike fare by distance, it doesn't penalize outer-416 commuters

My initial reaction is that (a) by penalizing those whose commuting needs are least elastic you penalize the economically weak, and (b) the assumption that fare by distance penalizes "outer-416 consumers" needs unpacking. On (b), certainly, the point of fare-by-distance is that it is both cost-based and aligns incentives with intended goals (compact urban form).