Friday, February 27, 2015

Metrorail Fares Through the Years

How much would you pay for a trip on the Washington Metro Area Transit Authority (WMATA) Metro? How much are you willing to pay for a trip on Metrorail, and how fair is that charge? As the 2015 year continues and discussions for the WMATA 2016 fiscal year start up, there have been preliminary discussions about raising the base fares for both rail and bus, although final budget votes won't happen until later in May. With this new upcoming potential round of fare increases in the works (even if the fares don't go up, local jurisdictions are being asked to pay more than last year), it is important to know some of the history of Metro fare increases since inception of the system in order to be able to judge current and future actions of the system.

Metrorail Fares
Since the beginning of the Metrorail system in 1976, the transit agency has used a distance-based fare - that is, if you ride further on the system, then you will pay more. The current fare structure includes a base fare and two zones, with base prices varying whether you enter the system during rush or off-peak hours. As the thinking goes, if you take a longer ride on the system then you are using more of its resources, and thus need to pay more to help maintain the system. This has generally worked over the years to keep fares as the largest percentage of income for the system and Metrorail as the second-largest system in the US, however there has always been significant funding required from the DC/MD/VA governments in order to keep the system fully funded. Fares have not gone up every year or even every other year on a regular basis, which got me interested in taking a look at the longer-term Metrorail fare history.

The first thing of interest is the cost of a Metrorail fare over time. There are two numbers which we can generally rely on since the inception of the system: minimum boarding charge, and maximum fare. Per the fare calculation that Metro uses when you swipe into the system, the boarding charge is the minimum fare that you are charged in order to get through the gate. This has always been the case since 1976, and continues to this day. The graph below is a chart of several pieces of information: a) max possible trip distance, b) max peak fare, c) off-peak max fare, d) peak boarding charge, and e) off-peak boarding charge. This is a lot of information, so just bear with me!

a) max possible trip distance: My understanding of this is that it is the maximum possible trip distance in the system on a line taking the composite "as the crow flies" measurements between each on said line. I'm not 100% sure this interpretation is correct, however. That said, in the graph below it represents the maximum distance you could travel on a line on Metro. This distance hasn't increased much since the work done in the mid-90's on the Red, Blue, and Green lines.
b) max peak fare: The maximum amount of money you are allowed to pay when riding the system during peak hours. This is denoted here in orange.
c) off-peak max fare: the same as the peak fare, except the maximum you can pay during off-peak hours
d) peak boarding charge: The minimum amount it will cost you to step into the Metrorail system during peak hours
e) off-peak boarding charge: The minimum amount it will cost you to step into the Metrorail system during off-peak hours

Minimum and maximum potential costs of riding Metro
A line was superimposed over the three sets of most interesting data - max peak fare, the peak/off-peak boarding charges. The off-peak max fare wasn't graphed as this lower fee was essentially "created" during the 2000's to let off-peak trips cost less. As the graph shows, all three sets of data are fairly regular and conform to a linear increase, though the max peak fare increases at a higher rate than the boarding charges. If we took just this data, it would appear to show that since the beginning of the Metrorail system there have been (somewhat)-regular fare increases and those coming this year would be no different.

Wait, what? Fare increases over time might be....normal?

Why apparently, yes! Just as milk, gas, bananas, and other products go up in price over time, the same appears to happen to a trip on the Metro system, thanks in no small part to this little thing called inflation. When requirements for living go up (food, gas, etc.), so do salaries, equipment costs, and a myriad of things Metro needs to function, and thus some of those charges are rolled into a Metro ticket. This is usually ok as wages increase over time, so patrons have more money to spend and thus available money to spend on the system.

Now you might say that yes inflation exists and things cost more because of it, but your cost in the Metrorail system has gone up significantly more over time and has not tracked with inflation. This, however, is where my thinking was previously incorrect and appears to be much more fair to the consumer than previously thought.

This second chart shows three sets of data: ratio in change of the peak boarding charge, ratio in change of the off-peak boarding charge, and Y/Y change in national US inflation. Lines were plotted to match all three, and (unsurprisingly) the peak/off-peak boarding charges (comparing a fare cost to that of the previous change) track very closely to each other at approximately a 7% increase in cost per fare increase. Inflation, since 1976 when the system opened, has actually slightly decreased at 10% year-over-year (i.e. 9.10% in 1975, 5.40% in 1990, and 1.60% in 2014). However, overall yearly inflation since 1975 itself clocks in at just over 4% (double-digit inflation of the late 1970's tied with the 1979 energy crisis did not help at all). Plotted over time, this yearly 4% increase in inflation ends up being more than the 7% fare-per-fare increase as applied to the Metrorail system:

Yearly changes in metro cost vs inflation
Given this publicly-available data and due to how the math appears to work out, adjusted for inflation, the minimum peak fare of $0.55 in 1976 would cost approximately $2.29 today (a ~315% increase!), whereas the actual is now $2.15. Fares have certainly increased every few years, but the data do not show that fares have risen any higher than than inflation but in fact slightly lower that inflation.

The results and the last graph are a bit confusing, but dipping back into derivatives every once in a while is certainly nothing short of a fun adventure. In the end, the rate of change of Metrorail fare increases does not keep up with the rate of change of inflation. All things being equal, the average Metrorail rider actually gets more out of the system now than an average rider back in 1976 would. This is especially interesting now that the system is almost 40 years older and significantly larger and covering significantly more area. The maximum peak fare that used to only be worth 14.7 miles is now one that is worth 15.7 (a meager increase), while the maximum possible trip distance has grown significantly from 17.30 miles to 29.60. Running the Metrorail system has grown more costly over time as it expanded, but customers of the system have been able to take advantage of cheaper fares compared to what has been charged in the past. If only this fully funded the Metrorail system this would be a win-win for both Metro and customers, however there is always more work to be done.

How does this revenue from years ago compare to what WMATA gets today? Localities certainly pay much more as well, which may or may not also stay in line with previous years. What lingering Metro questions do you have?

Cost of a Metrorail trip of 1mi up to 30mi of peak/off-peak, capped and uncapped cost

  • WMATA Metrorail fares: