Free/Reduced Cost Transfers in the Works with Clipper 2.0 Next Year
MTC shared exciting news this month: development of a policy for no-cost and reduced cost transfers on the next-generation Clipper 2.0 system rolling out next year. The policy is another step delivering on the Fare Policy Vision approved last year by MTC and transit agencies, following the August launch of the BayPass all agency transit pass pilot.
On Monday, October 17, the project team presented its draft policy to the region’s Fare Integration Task Force, giving a better view of what these free and reduced cost transfers might look like, and providing important updates on the structure, funding, and implementation of this project.
New Policy Statement
The project team presented a proposal intended to be easy to understand:
“When you make a trip that requires transferring between transit agencies, pay the full fare on just the first agency you use. Any transfer to another agency within two hours of the first boarding is discounted up to a limit of $2.50 per transfer.”
Local-local transfers would provide a discount amount equal to the fare of the second and subsequent legs of a trip, with a maximum of $2.50 per transfer. Local-regional transfers provide a discount equivalent to the local fare, with a maximum of $2.50 per transfer. Riders making regional-regional transfers, like Caltrain to BART, would receive a discount equal to the limit set by the policy statement ($2.50)
Riders who are currently awarded discounts for transit fares (senior, youth, START, etc.) will receive a free/reduced transfer discount limit proportional to the fare charged. For example, a rider with a current 50% discount would receive a free transfer for amounts up to $1.25. A similar policy is being proposed for paratransit users, with free transfer discounts proportional to paratransit fares, which are typically twice as expensive as normal fares.
For riders taking three or more transfers, the discount would be applied on each additional operator used in the 120 minute window, so the rider would only pay the equivalent of one full fare during that period.
Funding
The Fare Coordination and Integration Study (FCIS) business case, which analyzed and recommended free/reduced price transfers, had estimated the financial impact of these new policies, and a possible funding model to compensate.
The FCIS business case estimated a gross revenue impact of $28.5 million, offset by $6 million in revenue from new trips - a net impact of $22.5 million across participating transit agencies. To mitigate the financial risk for transit operators, the business case proposes a financial model which identifies $22.5 million in Transit Transformation Action Plan funding set aside by MTC. The duration of the pilot that this funding could sustain depends on multiple factors including the specific approach for funding allocation, real world outcomes, the degree to which revenue from new trips generated is factored into the estimates of revenue impact, and possible additional funding opportunities.
Next Steps
The project team proposed a 24-month pilot deployment at all operators on Clipper, but there are more steps on the path to this goal.
The project team will return to the Clipper Executive Board in November to discuss a financial approach to deliver a no-cost and reduced cost transfer policy. In order to proceed with this plan, the project team will need to gain Task Force and governing board approval, a goal that they are hoping to achieve as soon as December. In addition, legally required Federal Title VI analysis needs to be conducted, assessing the potential impact on low-income people. Promisingly, the Fare Coordination and Integration Study had already found that free/reduced cost transfers would provide benefits to low-income people.
If the proposal is endorsed by the Fare Integration Task Force composed of transit agency general managers and the executive director of MTC, the project will be on track to be fully implemented by the end of 2023, in accordance with the release of Clipper 2.0.
All of these changes are promising, and get us closer to ending the penalty to Bay Area transit riders who need to make transfers among the 27 separate transit agencies.
However, new and permanent sources of funding will be needed to ensure long term implementation of integrated fares, and it will be important to strengthen regional governance eliminating the need to convince all 27 transit agencies to voluntarily agree on measures with near-universal benefits for riders.