>Fairfax conducts economics experiment

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As part of the current fiscal years’ budget balancing measures, Fairfax County raised the price of express bus routes 380, 595 and 597 from $3.00 each way to $7.00 each way.  Their exact reasoning was not publicly stated, though I believe it had something to do with the recent increase in federal transportation subsidy from $120 per month to $230 per month.  With the transportation subsidy, round-trip travel less than about $12 per day is essentially free, providing a means for local governments to get additional revenue without losing much ridership.  This depends on there not being close substitutes and on your ridership being primarily government workers.  On two of these express bus routes, Fairfax found this combination and was able to nearly double revenue.  The third one saw ridership plummet.

Because this provided an interesting economics experiment, I obtained ridership data from Fairfax County for the increased fare lines, as well as three other lines unaffected by the change.  I obtained data for the months of June and July.  Other than the change in fares, there was no change in service frequency or schedule.

The baseline data showed a slight increase in ridership from June to July.  Average ridership grew between 1.75% and 7.8% for lines 171, 401 and 950.  There was not a change in fare for these lines.

fairfax connector ridership study unaffected routes For lines 595 and 597, which travel between park and rides in Reston and Pentagon/Crystal City, respectively, the lines experienced modest drops in ridership, about 20%.  Combined with nearly doubling of fares, the change resulted in a net revenue gain for the county, nearly doubling.  This is probably due to the high government employees ridership and lack of close substitutes for these lines.  The nearest substitute other than driving would be to take a bus to West Falls Church, take the Orange line and then transfer to the Blue line, a “three seat” ride taking approximately the same amount of time (but with three vehicles, it’s more likely that one of them would have a problem).

In contrast, ridership on line 380, from Franconia/Springfield to the Pentagon, was cut by almost 80%, and average revenue was cut in half.  Although the ridership is likely a lot of government workers, the Blue line provides the same trip with a much better frequency, about the same travel time, a more comfortable ride, and after the fare change, about half the cost.

fairfax connector ridership study These results show that it’s sometimes possible to get more revenue by raising fares, but the results depend heavily on the circumstances.  Fairfax should reconsider its decision to raise fares so heavily, at least on the 380.  Where there are close substitutes, large fare increases can actually decrease revenues and are counterproductive.  Now there are fewer people riding the 380 and paying more each, so the county has to subsidize the bus line even more.

UPDATE:  The county has informed me that they are studying a new variation of the 380 line to visit more park and rides and charge a lower fare.  This is in the preliminary stages so it would still need to be vetted by Supervisors for impact on their constituents.  It is still a very, very rough draft plan.

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About perkinsms

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

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