Deep Discount Group Pass Programs: Innovative Transit Finance

Abstract

For public transit operators in the U.S., neither fare increases nor fare reductions have been successful in boosting revenues. A different kind of strategy is needed, one that can produce more revenue for transit operators than it costs. This article argues that deep discount group pass (DDGP) programs can accomplish this goal. DDGP programs provide groups of people with unlimited-ride transit passes in exchange for a contractual payment by a group's employer or other organizing body. While previous research on DDGP programs has ignored their impact on operator revenues, this article addresses that gap by focusing on their revenue-increasing potential. The study estimated and compared before and after revenues earned by three transit operators to draw conclusions about the revenue-increasing potential of group pass programs. The universal DDGP programs analyzed consistently yielded either higher revenues per boarding than the system-wide average or higher total revenues from target markets with the program than without it, proving their potential as innovative instruments for increasing transit operating revenues. Employment-based DDGP programs yielded the highest net revenues to operators. When appropriately priced and carefully deployed, DDGP programs can increase transit revenues, make transit operators less reliant on external subsidy, and become powerful instruments of efficient fare policy in public transit.

New and Unique Aspects of University Campus Transportation Data to Improve Planning Methods

“…After this policy was enacted with the city of Boulder and the University of Colorado, total transit use in the last 5 years has increased by 400% ( 15 ). University of California, Berkeley’s Class Pass has had similar success, providing substantial discounts to students in exchange for unlimited marginally free transit rides ( 16 ).…”

“…Yet the interrelationship between these forces, particularly in the university context, remains under-explored, especially in the face of new technology and mobile proliferation. Policies and incentives can encourage or deter driving behaviors and influence auto ownership ( 16 , 21 – 27 ). Some communities use a “carrot” approach, offering incentives such as free transit passes, cash back (“cash-out”) parking programs, or social media nudge tools ( 28 ) to reward alternatives to driving ( 29 ).…”

“…Here, it is important to determine the proportion of the campus population that is inclined to use, or is even within reach of transit service. In the case of University of Tennessee, only two-thirds of students and a quarter of staff and faculty are within walking distance of the urban transit system, discouraging broad-based programs like deep-discount fares ( 16 ).…”

Sustainable Campus Transportation through Transit Partnership and Transportation Demand Management: A Case Study from the University of Florida

“…Unlimited access is not limited to institutions of higher learning. Third-party prepayment can also be off ered by large employers or municipal governments (Nuworsoo 2005).…”