Editorial Staff

Pioneer Institute Public Statement on the MBTA’s Proposal to Increase Fares by 6.3 Percent

/in , , , , , /by Editorial Staff
Share on Facebook
Share on Twitter
Share on
LinkedIn
+

While Pioneer Institute opposed the 2016 MBTA fare increases, the Institute believes that the T has earned an increase in fares of 6.3 percent, provided it is committed to introduce differential pricing, address chronic fare non-collection, fix the T’s faltering pension system, and focus investments on key service upgrades.  These commitments would modernize fare-setting and mitigate the negative impact of fare increases, ensure that the additional fare revenues are actually going to service improvements, and lay the groundwork for greater fare revenue generation through increased ridership.

In opposing the 2016 fare increase of 9.3 percent, we noted:

“Fare increases should be linked to demonstrable service improvements. The customer must also come first when it comes to fare increases. The T cannot ask riders to pay more unless it offers better, more reliable service in return.”

The MBTA is certainly nowhere near where it needs to be, but there have been modest improvements in service.  Moreover, the MBTA invested over $1 billion in maintenance and upgrades in 2018, more than double the amount spent in 2014 before the notorious 2015 “Snowmageddon,” and the T has committed to spending more than $1.5 billion annually over the next five years.

The Institute’s expression of support for the 2019 fare increase proposal is contingent on four commitments:

1. The MBTA must make price differentiation a core element of its fare increase proposal. Already in the T’s proposal is the hold-harmless provision for riders paying the cash fare on buses and users of special discounted fare programs.  But the MBTA needs to make a commitment to integrating differential pricing into all of its services, from transit to parking.  At a minimum, that means factoring into all fare proposals: the length of a trip, service demand and impacts on roadway congestion, income level, and the needs of riders making multiple trips or transfers.

In the immediate term, Pioneer believes three steps should be integrated into the 2019 fare increase proposal.  This fare hike is a good opportunity for the T to begin making the following fare pricing changes in advance of the installation of its new automated fare collection system.

Step 1.

Distanced-based pricing

 The commuter rail differentiates pricing based on destination. While the T’s current rapid transit and bus fare collection systems make distance pricing difficult to implement, the T should begin thinking through how the upcoming automated fare collection system can facilitate pricing based on trip length.
Step 2.

Service demand and impacts on roadway congestion

 The T must continue to factor into its pricing strategies “tipping points” that might cause riders to opt for cars. The T should clarify how it will take advantage of price elasticity analyses in fare setting, keeping in mind that high ridership levels have benefits that extend beyond transit.
Step 3.

The needs of riders making multiple trips or transfers

 The Boston Herald notes that two local organizations, Transit Matters and Transportation for Massachusetts, have suggested such an approach.  In Seattle, SelectPass provides riders with an all-encompassing fare that includes transfers over a set number of hours.

2. The MBTA must address fare evasion and chronic non-collection of fares: According to a 2016 report, the T was losing $42 million annually because of “fare evasion,” much of which was really a result of non-collection by commuter rail employees. It is worth noting that projected additional revenue from the proposed fare increase is less than the amount lost because of this operational failure.  Certainly, the Automated Fare Collection system to be installed should help address this issue.  That said, the T should take two actions right now: (a) It should clarify to the public the level of progress made on this issue in the intervening three years, and (b) It should revise its contract with Keolis and all future commuter rail contracts to create a financial incentive for the vendor to collect all fares.

3. The MBTA must set forth a plan to put its pension fund on a fiscally sound footing. The T must commit to addressing the unsustainable annual costs of its pension system.  As Mark Williams noted in The Boston Globe, a decade ago, $40 million had to be diverted from T revenues to keep the T’s pension system afloat.  By 2018, that number reached $100 million; by the time of the next fare increase, it will be $140 million.  In other words, if nothing is done to shift control of the T’s pension system to the state’s well-run Pension Reserves Investment Trust, all revenues gained through the fare hike now under consideration will be consumed by the T’s faltering pension system.  Not a cent will go to upgrading the riders’ experience.

4. The MBTA must focus its investments on its deferred maintenance backlog so that riders can see faster improvement on reliability and quality of service metrics, and so that ridership increases. While the T’s focus must be systemwide, the Institute believes that investments in upgrades to the Orange and Red Line (including signals, track, switches and also, importantly, power lines) are especially critical, given the opportunities to improve service quality dramatically and attract new riders and fare revenue. 

Get Our Fix the T Updates!

Related Posts

Study Finds Pension Obligation Bonds Could Worsen T Retirement Fund’s Financial Woes

A new study published by Pioneer Institute finds that issuing pension obligation bonds (POBs) to refinance $360 million of the MBTA Retirement Fund’s (MBTARF’s) $1.3 billion unfunded pension liability would only compound the T’s already serious financial risks.

Study Documents The Design Challenges, Contracting Issues, And Delays Facing New MBTA Fare Collection System

This new study unearths previously unseen communications between the MBTA and its contractors, showing that the MBTA’s efforts to modernize its fare collection system, including allowing payments with credit cards and bringing “tap and go” technology to Commuter Rail and ferry lines, was riddled with technological challenges and difficulties overseeing contractors as early as 2019, culminating in a 3-year delay to the project’s full implementation.

Study Finds Bus Rapid Transit Can Offer Cost-Effective Benefits

Bus rapid transit (BRT) incorporates unique features such as dedicated lanes to provide reliable and cost-effective service while reducing congestion and its detrimental environmental impacts, according to a new study published by Pioneer Institute.

Study Raises Concern That Annual T Fare Evasion Costs Could Rise By More Than $30 Million Under AFC 2.0

According to the Federal Transit Administration (FTA), the MBTA’s $935.4 million fare collection system (AFC 2.0) that is scheduled to be implemented in 2023 will reduce fare evasion by $35 million over a decade. But the T announced in 2021 that evasion could actually increase by up to $30 million under AFC 2.0, and now a Pioneer Institute study warns that insufficient fare enforcement could drive that figure even higher under the new system.

Pioneer Applauds MassDOT for Allston Project All At-Grade Plan

Pioneer Institute applauds the Massachusetts Department of Transportation (Mass DOT) for its decision to move forward with an all at-grade design for the “throat” area as part of the massive $1.7 billion Allston I-90 Interchange project announced yesterday by State Secretary of Transportation Jamey Tesler. Pioneer had proposed that MassDOT should revise its Scoping Report on the I-90 Allston Multimodal Project and recommend an additional option - a modified at-grade option for the throat area - to the Federal Highway Administration.

Open Letter: Extend the Term of the MBTA’s Fiscal and Management Control Board

Read Pioneer Institute's Open Letter urging policymakers to extend the term of the MBTA’s Fiscal and Management Control Board (FMCB), which is currently scheduled to sunset at the end of June.  The Letter also calls for the Control Board to continue to be made up of transit experts rather than political appointees, and recommends that an independent audit office be created that reports directly to the FMCB.

Pioneer Institute Statement on MBTA Service Cuts

Even as MBTA ridership and revenue have been gutted by the COVID-19 pandemic, the system remains a lifeline for so many residents in the Greater Boston area, especially those working in essential services like health care or in industries most impacted by the pandemic such as the restaurant sector.  Facing a crisis of this magnitude, T leadership must first do its all to rethink how it delivers services before reflexively making cuts.

COVID-19 Silver Lining: MBTA Takes Advantage of Ridership Lull to Accelerate $8.5 Billion Modernization Program

Pioneer Institute congratulates the Fiscal and Management Control Board (FMCB) and MBTA management for taking advantage of the precipitous ridership declines due to the COVID pandemic to dramatically accelerate ongoing construction projects.

Survey Suggests Demand for Telecommuting After COVID-19 Crisis

Citing an avoidance of the commute and more flexible scheduling, nearly 63 percent of respondents to Pioneer Institute’s survey, “Will You Commute To Work When The COVID-19 Crisis Is Over?” expressed a preference to work from home one day a week, and a plurality preferred two to three days a week, even after a COVID-19 vaccine is available. Respondents cite social isolation as the biggest drawback of remote work. The survey was conducted from April 22nd to May 15th, and received responses from over 700 individuals.

Study Highlights Transit Agency Best Practices in Response to COVID-19

The MBTA is taking a number of important steps to mitigate risks associated with the coronavirus, but some transit agencies around the country - from Philadelphia to San Francisco - have done significantly more, according to a new study that highlights the best practices of U.S. transit systems in response to COVID-19.

A Control Board Equipped for the Next Phase of MBTA Reform

In a new policy brief out today, Pioneer Institute calls on the Massachusetts Legislature to extend the life of the MBTA’s Fiscal and Management Control Board beyond the current fiscal year ending on June 30, and adjust it to address the agency's new challenges.

Pioneer Urges MassDOT to Reconsider At-Grade Throat Option for I-90 Allston Multimodal Project

Pioneer's new Public Comment calls on the Massachusetts Department of Transportation to revise its Scoping Report on the I-90 Allston Multimodal Project and recommend an additional option to the Federal Highway Administration.