>The "Other" reason behind eliminating paper transfers

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Metro is eliminating paper transfers as of January 4th.  According to this presentation before the Customer Service Operations and Safety (CSOS) Committee of the WMATA Board, 25% of bus riders use a bus paper transfer, and 2% use a rail paper transfer, compared with 6% of riders who use a Smartrip card to transfer between buses.

If you only read the official press releases, you’d get the impression that the principal reason Metro is doing this is to save money on printing the paper transfers, since that aspect of it has a dollar figure attached to it:

SmarTrip® also makes transferring easier. And it saves Metro – and you, our customer – money on paper and printing. That’s why we’re discontinuing the paper transfers.

Eliminating paper transfers will save Metro about $350,000 a year for the cost of paper and printing, plus expenses associated with the repair and maintenance of the old transfer machines in stations. It also is expected to minimize fraud and abuse of paper transfers by individuals who sell or give away their transfers to other riders, and reduce assaults on bus operators by riders who have disputes with operators about transfers.

However, according to the presentation, the larger effect on Metro’s finances is likely to be an increase in bus rider revenue.  $5 Million per year, according to Metro.  This is much more than the $2 million in one-time cost savings by not having to maintain rail transfer printing machines, and $180,000 (per year?) saved by not printing bus transfers.  The increase is also about 3.3% of Metrobus passenger revenues.

Where does this revenue come from?  Some people just won’t end up getting a Smartrip card, despite their increasing availability and Metro’s efforts to distribute them.  I guess they will have to pay full fare when transferring.

Fraud reduction is the other big source.  Paper transfers are frequently resold on the black market, either individually or by the book.  There is some evidence for this, in that more people board Metrobus using a paper transfer than there are cash riders.  The two methods go hand-in-hand.  Only cash riders receive a paper transfer.  For comparison, there are only 1/3 of the number of Smartrip transfers as Smartrip cash transactions.  I’m not sure this implies that 2/3 of paper transfer uses are fraudulent, or what.  That seems almost impossibly high.

Other transit systems realized huge revenue gains when they eliminated paper transfers, and Metro is looking forward to a net revenue gain of $9 million over two years after accounting for the cost of Smartrip cards, customer communications and other expenses.

Metro should just level with the community and state that some people are defrauding the system to the tune of almost $5 million per year.  That buys a lot of Smartrip cards.

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About perkinsms

I'm an engineer and father interested in transit, parking and economics.
This entry was posted in bus, passes, smartrip, transit, WMATA. Bookmark the permalink.

4 Responses to >The "Other" reason behind eliminating paper transfers

  1. Anonymous says:

    >SEPTA tried and successfully got sued. So instead they simply raised the price to 75 cents. That’ll teach ’em.

  2. Michael says:

    >Thanks for the information. I’m trying to back out what the story was, can you provide any news articles?

  3. Dharm says:

    >There is a BIG difference between SEPTA and WMATA. SEPTA has no smartcard! One will still be able to get a free transfers on WMATA, just not use a paper transfer come January 4. The civil rights issues which were raised in the case of SEPTA are thus largely mute.

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