CUTA's Fare Recovery Strategy
The pandemic led to the largest drop in public transit ridership ever seen in Canada, and the lost farebox revenue put financial pressure on many transit agencies. Collective action by the transit industry resulted in emergency government funding from the federal and provincial governments. With the long-term longevity of this funding remaining uncertain, transit systems must consider new strategies to bring ridership and revenue back to pre-pandemic levels. Failure to do so may force agencies to hike fares or cut service, which would push riders away and risk long-term impairment to transit agencies’ finances.
At the same time, the pandemic has led to changes in travel behaviour with continued hybrid work and greater ridership outside typical weekday peak periods. As people reconsider their transportation needs, transit agencies have a critical opportunity to respond to changing needs, attract new riders, and increase their fare revenue. This document presents a menu of different fare products and options that are available, so that transit agencies looking to change or diversify their fare products can easily explain ideas to others as necessary. A mix of 12 fare products were chosen, with each responding to at least one of the following three challenges:
- Responding to changes in travel patterns
- Short-term options to recapture lost riders
- Long-term reattraction of riders
Fare Products Analyzed
- Changes to Flat Fare Structures: when fares are uniform across the entire transit network
- Peak/Off-Peak Pricing: different fare pricing during peak and offpeak times
- Changes to Transfer Structures: changing the number of possible transfer options for each fare
- Fare Capping: offering free rides once a user crosses a certain threshold of fares purchased
- Loyalty Programs: incentivizing riders through points or rewards
- Smartcards: a solution that loads and validates fares through a physical card
- Promotional Fares: time-limited discounts or offers
- Fare Payment Apps: a solution that loads and validates fares through a mobile application
- New/Revised Concession Programs: targeted discounts or offers for specific groups of people
- Distance/Zone Based Products: charging higher fares to riders who take longer trips
- Group Fare Products: discounts for people traveling in a group
- Free Transit: elimination of transit fares; fully funding transit through public subsidies