Eco Pass Discussion

Eco Pass Discussion

Eco Pass Program Evaluation

UpdateSVLG Transportation Policy Committee

October 20121

Eco Pass Program Evaluation

• Evaluation of program’s effectiveness• First major evaluation of program since inception• Revisit policy objectives of Eco Pass Program• Pressure on transit agencies to achieve efficiencies• Clipper introduction provides opportunity • Opportunity to work with subscribers and future subscribers

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3

Alternatives Analysis

Policy & Citizen Input

Peer & Literature

Review

Stakeholders Surveys

Policy & Goals

DevelopmentOperations

and Ridership

Alternatives Development

Program Implementation

3Project Structure

Eco Pass Program Goals and Objectives

Goals• Attract and retain riders, increase ridership• Revenue neutral

– Board-adopted policy of average adult fare, currently $1.53

Objectives• Ensure program is easy to administer and program rules are understandable

and understood• Generate data to understand ridership, usage rates, and value• Minimize opportunities for fraud and abuse• Leverage technology to minimize fraud and abuse and to collect ridership

and usage data• Provide a program with strong branding• Provide fairness, equity among participating organizations/individuals

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Data CollectionPeer and Literature Review

- 9 programs interviewed, employer-based- Other program types: college/university (>60), housing (2+), and student (2)- Themes: capacity, revenue generation, TDM programs, pricing

Surveys- VTA & Employer-based surveys (19,000 completed surveys) - Usage rates vary dramatically between different types of organizations- Survey data reconciled with ridership tabulations for a “reality check”

Ridership - Eco Pass boardings tabulated on bus system

- Fare checkers tabulated Light Rail boardings over 5-week period (15,569 passengers)

Revenue information- Revenue data from 2000 to today examined- Steady decline in revenue per Eco pass boarding

since 2000

Eco Pass makes up a total of 16% of all VTA fare payment

* 13% of all bus boardings* 26% of all Light Rail boardings

Current revenue per Eco Pass boarding: $0.67

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11 13 14 16 17 18 19 22 23 25 26 27 31 32 34 35 37 39 40 42 45 46 47 48 49 51 52 53 54 55 57 58 60 61 62 63 64 65 66 68 70 71 72 73 77 81 82 88 89 101102103104120121122140168180181182304321328330522

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Monthly Total Ridership > 100,000Monthly Total Ridership <10,000 10,000 < Monthly Total Ridership <100,000

Eco Pass Utilization by Route

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Line 23: 9,773 daily boardings, 21% Eco Pass

Line 22: 14,376 daily boardings, 11% Eco Pass

Express Buses: 1,645 daily boardings, 47% Eco Pass (May 2012)

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Program NOT meeting revenue goal• Board-adopted Revenue Goal of Average Adult Fare ($1.53)• Current Eco Pass revenue per boarding is $0.55

In 2011, Eco Pass was 16% of all VTA ridership, but only 8% of total revenue

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ECO PASS ALTERNATIVES#1 Status Quo No market distinctions Pass for every member Maintain current pricing strategy

#2 Modified Status Quo Introduce market distinctions Retain pass for every member Restructure price matrix;

Prices changes regularly to reflect usage; changes phased to achieve revenue goals

#3 Usage Based Introduce market distinctions Retain pass for every member Annual fees unique to each organization;

See fees based on previous year’s usage

NON ECO PASS ALTERNATIVES#4 Discounted Bulk Sales Customizable; organizations may purchase

different numbers, product combinations All members eligible, but not required to

participate Future pricing based on actual use

#5 Clipper Direct Customizable; members not required to

participate Eliminates deep discounting Pricing determined by products employee

chooses to buy

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Alternatives

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1. Reduce Number of Participant Size Categories from 4 to 3. Eliminates category for organization of 15,000 or more.

2. Reduce Location Categories from 3 to 2. Within ¼ mile from Rapid service; outside of ¼ mile from Rapid service (Light Rail, BRT, Express Bus).

3. Stepping. Eliminates loophole in pricing that unfairly provided a discount and encouraged abuse in reporting.

4. Market-based Pricing. Employer, residential, and college/university programs are priced separately, based on usage.

5. Transition to Clipper. Should occur over the next 3 years. Addresses lack of data and prevents fraud associated with stickers.

6. Incremental Price Increases. Price increases are capped at 15% per year until the existing subscriber reaches the target price. New subscribers pay the target price.

7. Diversify Pass Offerings. VTA will offer a range of transit pass products including Clipper Direct, Monthly Subscription, Eco Pass and the new Eco Pass Lite bulk discount annual passes.

8. Re-evaluation after 4 years. Pricing matrix and program revisions will be revised in 4 years, allowing Clipper to gain wide spread use, benefitting from resulting data.

Recommendation: Modified Status QuoRecommendation focuses on eight main program areas for modification

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Reduce # of Participant Size Categories from 4 to 3: 1 to 99; 100 to 2,999; 3,000+. Existing 15,000+ category dropped.

Recommendation: Organizations by Category

Location Size:1 to 99

Size:100 to 2,999

Size:3,000 to 14,999

Size:15,000+

Downtown San Jose 0 0 0 1≤ ¼ mile of light rail 1 0 0 0> ¼ mile from light rail 0 4 0 1


Size:100 to 2,999

Size:3,000 to 14,999

Size:15,000+



Size:100 to 2,999

Size:3,000 to 14,999

Size:15,000+


Employers

Residential

Colleges/Universities

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Reduce Location Categories from 3 to 2: Within ¼ mile from Rapid service; outside of ¼ mile from Rapid service. Rapid service is defined as light rail, BRT, and Express services. Existing Downtown San Jose category dropped.

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Recommendation: Location

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Stepping: Each organization would pay the price per employee from the first step for its first 99 employees, then the per employee price from the second step for employees 100-2,999, etc.

Recommendation: SteppingTo

tal C

ost

Tota

l Cos

t

Number of employees Number of employees

Existing Pricing Stepped Pricing

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Current 1-99 100-2,999

3,000-14,999 15,000+

Downtown San Jose $144 $108 $72 $36

≤ ¼ mile of light rail $108 $72 $36 $18

¼ mile of light rail $72 $36 $18 $9

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Residential 1-99 100-2,999 3,000+

≤ ¼ mile of rapid service $240 $180 $120

¼ mile of rapid service $200 $150 $100

University 1-99 100-2,999 3,000+



Employer 1-99 100-2,999 3,000+



Recommendation: Price Matrix ChangesPricing based on new categories and usage: Adopt changes to fees based on different usage rates among the 3 distinct categories of Eco Pass subscribers.

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Colleges/Universities and Affordable Housing -- prioritize ridership over revenue?Offer the same discount as Youth pass: 36% (based on monthly pass cost of $45 instead of $70 for Adults)• Results in a $1.2M (12%) reduction in total revenue

Alternative Price Matrix Proposal

Residential 1-99 100-2,999 3,000+



University 1-99 100-2,999 3,000+


¼ of rapid service $85 $65 $45

University 1-99 100-2,999 3,000+


¼ of rapid service $55 $41 $29

Residential 1-99 100-2,999 3,000+



Proposed Pricing Proposed Alternate Pricing

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Transition to Clipper: Within 3 years all Eco Pass subscribers will be transitioned to Clipper cards with an identifying photo ID. This will reduce fraud and allow VTA and Eco Pass administrators to track usage data.

Recommendation: Clipper Transition and Incremental Price Increase

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Cap price increase at 15% per year: While some subscribers may face an increase of over 100%, others will have no increase at all. Cap price increases at 15% per year to allow predictability and adverse impacts.

22 subscribers will see no change to their fees

38 subscribers will take 7 years or longer to meet new price point

49 subscribers will reach the new price point within 6 years

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Recommendation: Diversify Discount Pass Offerings

Offer a range of transit products to meet the needs of all organizations / populations: Clipper Direct, annual subscription, monthly pass, Eco Pass and Eco Pass Lite

lite

ec passec pass

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Recommendation: Reevaluation in Year 4Implementation: The implementation strategy is designed to introduce changes gradually and collect data through Clipper usage. After 4 years, the program will be reevaluated.

2013 • Adopt Eco Pass program modifications• Implement program changes in Fall 2013

2014 – 2016• 15% maximum annual price increase• Develop new marketing materials, new subscribers subject to new

charges

2016/2017• Reevaluation of program pricing and modifications, using available

data from widespread Clipper utilization• Review pricing and other modifications, consider changes to

program

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Eco Pass Revenue Expectations

Year 0 Year 1 Year 2 Year 3 Year 4

Board-Adopted Policy of Average Adult Fare $3.9M $4.4M $5.1M $5.7M $6.2M

Adopt new revenue policy for colleges/universities and

affordable housing$3.9M $4.3M $4.7M $5.1M $5.6M

Status quo $3.9M $3.9M $3.9M $3.9M $3.9M

1919

Boardings vs. Revenue (from Eco Pass organizations)

Existing Eco Pass Proposed Eco Pass

Cancel Eco Pass Highest $ in-crease cancel

Highest % increase cancel

0

5,000

10,000

15,000

20,000

25,000

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

Total Boardings

Total Revenue

2020

• Title VI Analysis

• Subscriber outreach

• January 1, 2014 – Phase 1 of implementation (with incremental increases as appropriate)

• 2016/2017 – next evaluation (for CY 2018 implementation)• Based on improved data collected through Clipper implementation or

annual survey

Next Steps

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END

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Schedule

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2012 2013 2014Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec Jan

Tasks

1-6 Existing Conditions

Task 7

Alternatives Development

Task 8

Alternatives Assessment

Task 9 Implementation

Task Force Meetings

Title VI and Other Stakeholders input

VTA Committees and Board

Implement proposed changes

Documents

Eco Pass Discussion