Should JTA be FARE FREE?

[Ralph W]

If it's true that the fares collected fall short of even paying the cost of fare collection then there is no real reason to collect fares in the first place.

yes it is true...JTA farebox recovery is around 20%....the general recovery rate for bus systems around the country (not rail) is less than 30%.

but that 20% still helps out the bottom line...so if the system is free, how do you propose to make up the lost revenue.

now one example (used in Tally and Gainesville) is to give students "free" rides...but note that UF, FSU, FAMU, Sante Fe College, and Tallahassee Community College pay the transit systems on an annual basis to provide the service...and then turn around and charge students a transportation fee to cover their costs.

If the cost of administering the fare system is $100 and the income (recovery) from the fares only covers $20 of that cost then the rest of the cost ($80) is derived from some other source of revenue and is a drain on the bottom line.

Removing the fares and thus the administrative system, frees up that $80 for some other use, such as providing the bus shelters, more buses per route, a few more drivers for those buses.

[tufsu1]

It isn't just about the cost of collecting the fare....that's actually a very small part.

Transit operations costs includes admistraive expenses, bus driver salaries/benefits, vehicle maintenance, fuel, insurance, etc.

[Ralph W]

From Ock's first post:

"Bus fares might give off a warm fuzzy feeling to more fiscally conservative citizens, who believe logically enough that bus fares actually offset their costs. THEY DON'T. There have been very few studies of this fact but when the subject of fare collection was studied in relation to costs it was discovered that rarely does the collection process even cover the costs to collect said fares!" Emphasis added.

Relying on the above information I do not read into it that bus fares contribute 20% to the overall revenue stream to be used for all operations but only to the collection of said fares which leads to the conclusion that fares pay for 20% of the cost to collect fares and is 80% short of that goal.

Therefore, if the collection of fares costs 80% more than it takes in to operate the collection system, the system costs the JTA money from the bottom line and should be eliminated to free up that money for increased operations.

[tufsu1]

I'm sure you can spin it that way...after all, the driver is needed to collect fares right?  So his salary/benefits are part of those costs....and if you just got rid of the fares, you wouldn't need the driver 

Seriously, right now the system has collection boxes....it doesn't even seem remotely possible that fare collection is equal to or greater than 20% of overall bus system operational costs.

Perhaps Ock can better explain what he meant

[Ocklawaha]

The theory here is that JTA is in a potentially fatal tailspin. Imagine you are in Mike Blaylocks shoes, you have great public pressure to either expand or maintin service levels in spite of soaring costs. You must find a way to raise more money to keep the wheels turning. The apparent solution is to immediately raise fares, politicians and the public are demanding accountability for your actions. So up go the fares and down goes the ridership at the rate of 3.8% for every 10% increase in fares. JTA ridership plunges 19% which means at best, you haven't gained any ground and at worst, you have reached the tipping point and started spiraling downward.

A recent study found that even in the nations largest systems the cost of fare collection is about 22% of the fares collected. King County Metro Transit, in Seattle, the nations #6 largest bus fleet operator (Jax is #76) in the country conducted a study that found it cost them $8 million dollars a year to collect fares. A similar cost in Jax would be enough to buy 18 new buses. In New York City, nations #1 transit fleet operator, the cost of fare collection is $200,000,000 per year. 

Jacksonville recently received a grant for a $4,430,000 Fare Collection System to install modern fare collection equipment in bus fleet (which BTW was the single largest grant to Jacksonville for transportation in this round of Recovery Act funds ) Within the time frame of this year, JTA was among the winning proposals, chosen from among 274 TIGER III applications from across the U.S, $4 million dollars to buy 8 new hybrid buses.

I suspect that JTA being a medium sized system might squeeze out a small positive cash flow from the fare box, but as they continue to shrink the system, that isn't going to remain the rule. Based on the triple didgit advances of systems that have gone fare free, I'd like to see JTA adopt a 50% fare cut as a test of the theory. Give it a couple of months and see how revenues are holding up. Other possibilities would be $1.50 and the farebox issues an ALL DAY bus pass... HA! But then we'd probably need another grant for fare collections. I honestly believe a cut would result in MORE revenue and ridership and that a fare increase in a system that is already bare bones is the wrong direction to go.

OCKLAWAHA