LA Metro: It's Time For a More Convenient and Equitable Fare Structure

It's time to abandon the daily, weekly, and monthly pass system and adopt a fare structure built around spending caps. Transit users in Los Angeles would continue to pay $1.75 per ride, with a daily spending cap of $7, weekly cap of $25, and monthly cap of $100—but the possibility of overpaying for transit use would be completely eliminated. It's all the benefits of pay-as-you-go and none of the drawbacks of daily, weekly, and monthly passes.

LA Metro TAP cards.

Most of us have been there: We need to get around the city for the day, so we load some money onto our TAP card for our bus or train fare. We don't know how many transit trips we're going to take for the day, so we play it conservative and buy a fare or two, saving a few dollars off the all-day pass. Come the end of the day, we've taken half a dozen transit trips and spent twice as much as if we'd just bought the day pass in the first place.

Or maybe you're more familiar with the reverse: You expect to use transit quite a bit over the next week, so rather than pay a few bucks for each ride you decide to spring for a weekly pass at a cost of $25. Things come up, plans change, and suddenly you realize you've spent 25 bucks for 7 dollars worth of bus rides. It's the gym membership of transportation spending.

In most cities, LA included, we're expected to make a prediction about how we'll use transit for the next day, week, or month (or even year), and make our fare purchase based on that prediction. If we overestimate our transit usage, we overpay; if we underestimate our transit usage, we overpay. 

For infrequent transit users these situations are bearable, though inconvenient and frustrating. The worry that you might make the wrong choice is an annoyance, but little more. If you're a low income worker, a student, or an elderly resident on a fixed income, however—someone who can't afford even minor financial mistakes, or who doesn't always have the cash flow to put up $100 at the same time each month for a 30-day transit pass—this is a serious problem. 

It doesn't have to be this way, and it's time the LA Metro and other regional and municipal transit agencies adopt a more equitable, fault-tolerant payment structure. For an example of what it should look like, we can look to Christchurch, New Zealand. (Hat tip to Darren Davis for the example.)

 

Pay-per-trip, with daily, weekly, and monthly caps

In Christchurch, there are daily and weekly spending caps that eliminate the possibility of overpaying for transit service. This has allowed them to do away with daily and weekly passes entirely.

Instead of purchasing daily or weekly passes, you simply use your fare card as an e-wallet and pay for each trip directly. When you reach the spending cap for the day, any additional trips you take that day are free, exactly as if you'd purchased a day pass—but without the requirement that you pay for all your rides up front. The weekly caps work in exactly the same way.

Per the table below, Christchurch's daily cap is set at $5, and the weekly cap is $25.

Fare structure for the Metrocard in Christchurch, New Zealand.

What this means in Christchurch is that if you take transit to work and back throughout the week, you hit the cap by Friday evening and transit is effectively free for the weekend—not very different from buying a weekly pass on Monday and using it throughout the week. But if you fall ill on Thursday and miss work for a couple days, you end up paying just $15 for the week, saving yourself $10 on bus or train rides you aren't able to take that week.

LA Metro fare prices. Image source: The Travel Guru.

Daily and Weekly passes in Los Angeles are currently $7 and $25, respectively, so the weekly spending cap would be reached earlier here, but the message is the same. With this structure in place no one with a TAP card would ever pay more than $7 in a day, $25 in a week, or $100 in a month using normal service—a claim we definitely cannot make today. It could even capture the additional cost of out-of-zone and premium services such as the Metro Silver Line, without the need to purchase a special pass in advance. We've currently got a lot of people unwittingly donating their money to Metro, an organization that absolutely should not be in the business of over-charging its patrons—particularly when the median household income for those patrons is less than one-third the median income of County households overall. 

Even beyond concerns for social and economic justice, this fare structure is also just smart policy for those interested in growing the appeal of public transit. It's yet another step toward more user-friendly transit, eliminating the minor stress of forecasting one's daily and weekly travel and allowing people to just... go. There's something indescribably freeing about a transit system that doesn't require its users to be experts, and the ability to "pick up and go" without any preoccupation is one of the greatest appeals of driving. Transit will need to continually evolve in that direction to compete.

Prior innovations, especially real-time tracking, have dramatically improved the experience of trip-planning and transit use. This evolution in fare policy is by no means so great a leap forward, but it's an obvious and sensible step forward, and the technology is already in place to implement it. What are we waiting for?

If We Can Grow Our Economy With Fewer Carbon Emissions, We Can Grow it With Less Driving, Too

More people are driving—let's all celebrate!! And/or let's build even more roads to encourage more people to join us in our miserable commute!!! Photo by Kim Scarborough.

For the second year in a row the Federal Highway Administration is celebrating the fact that Americans are driving more. They've been using the increase in vehicle-miles traveled to make the case that we need to invest more in our nation's highways, apparently accepting as a given that more driving means more economic activity. Here's Secretary of Transportation Anthony Foxx from last year's announcement:

"More people driving means our economy is picking up speed ... It also means we need to increase our investment in transportation to meet this demand, which is why Congress needs to pass the President's four-year, $302 billion GROW AMERICA Act."

Putting aside the fallacy that more investment in roads will do anything to significantly improve the flow of traffic or reduce travel times—the last $400 billion we spent didn't seem to do us much good—the real error here is in assuming that more driving means a stronger economy, and, worse, that growth is actually dependent upon increasing VMT. We don't see that kind of thinking from the Obama administration when it comes to the connection between GDP growth and carbon emissions; I would challenge the White House and our elected leaders to apply to transportation the same vision and zeal with which they've approached climate change.

ECONOMIC GROWTH AND CARBON EMISSIONS: "DECOUPLING"

Historically it's been believed that economic growth could only occur alongside increasing carbon emissions, and the actual experience of most countries had borne that out. 

More recently, though, we've learned that the link between economic growth and emissions isn't as ironclad as it once seemed. Plenty of countries have managed to get richer at the same time they've reduced their carbon footprint, a process known as "decoupling": Sweden, for example, decoupled its growth from emissions way back in the mid-1990s, so this isn't exactly a cutting-edge concept. Economy/Emissions decoupling appears to have manifested at the global level, too, with a recent report from the International Energy Agency finding that carbon emissions held steady from 2013 to 2014 while the global economy grew by 3 percent.

None of this is news to the Obama administration. The White House noted in its 2013 Climate Action Plan that "in 2012, U.S. carbon emissions fell to the lowest level in two decades even as the economy continued to grow." The recognition that we can reduce carbon emissions and still grow the economy is a key selling point for the president, essential for generating support for regulations that seek to shut down coal-fired power plants and promote renewable energy investments.

All of which begs the question, shouldn't we be able to achieve a similar decoupling of economic growth and vehicle-miles traveled? Better yet, according to the data, haven't we already done so? 

ECONOMIC GROWTH AND VEHICLE-MILES TRAVELED: DECOUPLING?

Consider the following graph, which shows changes to real GDP and vehicle-miles traveled over the past 45 years:

Note that up until the late 1990s GDP growth and VMT tracked one another very closely. Then, all of a sudden, they didn't: Since the mid-2000s in particular, we've seen virtually no increase in vehicle-miles traveled (and a reduction in per capita VMT), while GDP climbed well above its pre-recession peak.

The next graph compares GDP to VMT, subtracting annual growth (%) of VMT from GDP for each year since 1970. (For example, in 1992 U.S. GDP grew by 3.5 percent and VMT grew by a little over 2.5 percent, so the difference is right around 1 percent—that is, GDP grew by 1 percent more than VMT in that year.) This helps illustrate the connection between the two measures, and over the past 45 years it shows a pretty clear trend toward economic growth being less and less dependent on driving.

There's significant variability from year to year, but while in the past it was common for VMT growth to exceed GDP growth (i.e., the difference between the two falls into negative territory in the above graph), it's happening with much less frequency today. Not only has GDP been growing faster than vehicle miles in recent years, the average difference between the two has also grown. The decoupling of economic growth and driving became painfully apparent immediately before and in the years since the Great Recession, but what this data shows is that this disconnect has been progressing, albeit slowly, for decades.

Looking back even further, using data from the Highway Administration and Bureau of Economic Analysis, the difference between recent years and earlier generations becomes even clearer:

COMMITTING TO A "DECOUPLED" FUTURE

If the past several decades have taught us anything, it's that just because things worked one way for a long time doesn't mean they'll work that way forever. Increasing productivity used to mean growing wages, and that's no longer the case—at least for now. On the more positive side, technological and societal changes mean that economic growth is no longer as dependent on pumping carbon into the atmosphere and spending more and more time sitting behind the wheels of our cars. 

Unfortunately, while our elected and appointed leaders are decrying the disconnect between productivity and wages, and celebrating the decoupling of economic growth and carbon emissions, most have yet to accept the fundamental shift in the role of transportation in our lives and in our economy. Organizations like the Federal Highway Administration are still married to an outmoded view that more roads mean more driving, and more driving means a stronger economy. They're right about the first part, at least.

We need them to understand that the world they knew is gone. That it's entirely possible to build a more robust economy without doubling down on additional road investments—road investments that so often fail to recognize the moral, social, environmental, and economic value of less car-dependent, human-scale cities and towns. The economic justification that "more roads equals more growth" is no longer tenable because it's no longer true, and transportation departments at every level of government need to come to terms with that new reality and adjust their priorities accordingly.

The Irony of Selling Oil Reserves to Pay for Highway Expansion

The Bryan Mound Strategic Petroleum Reserve site, one of several in the U.S., is capable of holding 226 million barrels of oil. Source: The Center for Land Use Interpretation.

Unsurprising news from Politico and Streetsblog says that the U.S. Senate has put together a whole grab bag of one-off gimmicks to fund federal transportation programs for another few years, but one idea stood out to me as particularly ludicrous: selling off $9 billion worth of the nation's Strategic Petroleum Reserves (SPR) to help pay for more highway construction.

Tanya Snyder at Streetsblog emphasized how this is just the latest in a series of "gimmicky pay-fors" that have resulted from Congress's unwillingness to embrace higher gas taxes, despite the fact that the federal gas tax has just over half as much impact on consumers today as when it was last raised in 1993. Politico's article focused on how this idea runs counter to the whole "strategic" aspect of the SPR, which is intended to serve as a buffer against supply disruptions if disaster or war threatens the global flow of oil—not a piggy bank to be tapped any time legislators can't find the courage to make more economically sustainable decisions. 

Putting aside the cowardly and economically unsustainable nature of these recommendations, however, I'd just like to draw attention to the incredible irony of the sale of strategic oil reserves to fund highway expansion. These senators are proposing that we invest even more in our already-overbuilt highway network and that we pay for it by chipping away at the protections that keep an oil-dependent economy stable. They're looking to bolster our long-term dependence on the global supply of oil while at the same time increasing our vulnerability to disruptions of that supply. How can you write this into federal law with a straight face? Did we just get trolled by a U.S. Senator?

So much of our state and federal transportation programs seem built around a penny-wise, pound-foolish approach to infrastructure investment, but I've yet to see that mindset more perfectly encapsulated into an explicit policy proposal. Fortunately there are senators on both sides of the aisle in opposition, but this isn't the first time an SPR sell-off has been used to fund non-critical programs, and I don't think it's the last we'll hear of it.

Route Performance Index Results For Every LA Metro Bus Line

Los Angeles Metro has developed a new metric to help it objectively evaluate how its bus lines are doing on a few key measures: subsidy per passenger, riders per hour of service, and share of seats filled throughout the day. It's called the Route Performance Index, and the results are helping Metro design a new, expanded frequent transit network. The RPI allows them to identify laggards in the bus network, eliminate or alter those services, and repurpose the saved hours into better-performing lines, ultimately covering a larger share of the county in high-quality transit service that runs every 15 minutes or less. If you're interested in learning more about it, I suggest reading Jarrett Walker's post at his blog, Human Transit.

I wasn't able to find the results of the evaluation, except for this presentation that identifies the worst-performing lines in the network, so I asked Metro to send it to me. (Thanks Public Records Act!)

I got it yesterday and don't have time to do any real analysis of the numbers, but I wanted to share it as a public resource for anyone interested in diving into the details. In addition to subsidy per boarding, passengers per revenue service hour, and passenger miles per seat mile for each line, it also has information on total daily weekday boardings, daily revenue service hours (not sure if these are scheduled or actual), the RPI value (the highest is 1.69, the lowest is 0.27), and the ranking according to RPI score. You can find all the data in the Tableau table below, or you can download the original Excel file from this Dropbox link. Have fun!

Seattle's Sound Transit Hostage Situation

Joe Fain giving himself a high-five after stealing money from the Seattle region to fund wasteful highway projects in rural and suburban Washington.

Talk like this pretty much sends me into a frothing rage:

"In order to get, you got to give. There’s a recognition that Sound Transit 3 is very important to our Democratic colleagues, just like finishing some of these incredibly important mega-projects are important to some of the commuters in our districts. So we’re comfortable giving the voters in the ST area an opportunity to vote on whether they want to increase their transit service as part of this larger statewide package."

That's from State Senator Joe Fain (R-Auburn), making the point that the largely Democratic three-county region under Sound Transit's auspices has to do some horse-trading to get the funding they desire. That's politics.

And frankly, that'd all be well and good if we were actually getting anything. In truth, all we get  is the right to tax ourselves to build what we need, at no cost to anyone outside the three-county area. What we give is our actual money—billions and billions of dollars—shipped out to the far corners of the state to fund their low-productivity, high-liability highway projects. They'll let us spend our own money on what we want, but only if they get a cut. Somehow they're able to support this with a straight face, as though they're doing us a favor.

The Puget Sound region already subsidizes most of the Republican-dominated areas of the state, and it's ironically the "local control" conservatives that are holding that control hostage to the needs of their own constituents' gas-powered fiscal profligacy.

The best part? They didn't even give us the full taxing authority we asked for. You can count on us getting it eventually—as long as we pitch in a little more of our own money to buy them some fancy new rural interchanges and extra highway lanes.

Why Uber and Lyft Wouldn't Have Succeeded If They'd Tried to Follow the Law

If you can fly a school bus in space, why can't you drive it from Oakland to San Francisco?

Over at Pacific Standard there's a really interesting story about Night School, a San Francisco-based company that tried to improve evening transportation in the region by making use of school buses during after-school hours. It sounds like a great idea: on the one hand we'd be making more efficient use of our infrastructure and equipment, and on the other hand we'd be making life easier on people who want (or need) to get around without a car. And who knows, maybe the extra revenue for the school bus operator would have meant cheaper lease rates for school districts, too.

But as it turns out, we'll never know because the California Public Utilities Commission decided to step in and make life a living hell for the hopeful business owners. After trying to push their way through the bureaucratic morass for nearly a year, the founders threw in the towel and abandoned their innovative business idea. Call it a transportation own-goal on the part of California government.

As I read this, I kept thinking that this is exactly why Uber and Lyft probably wouldn't have been successful if they'd waited to work things out with the myriad regulatory regimes that might claim some authority over their operations. They'd have probably ended up in a similar position to Night School, beating their head against the wall for a few months or years, all the while giving regulators the time they need to prepare effective roadblocks to the new service model. Some people might dislike the way these businesses went about establishing themselves, but I suspect that most of them would prefer a little lawlessness to continued reliance on the old model of traditional taxi service. (And make no mistake, we'd still be stuck with 1980s-era taxi service if e-hailing companies hadn't entered the market.)

Although there are plenty of forward-looking governmental organizations out there, most are not looking to shake things up, especially groups like public utilities commissions which have little to gain personally from things like new transportation services. Uber and Lyft were successful because they built their support base first, by providing a service that consumers found useful and a source of income for a lot of drivers — then they leveraged that support to secure regulatory and political cover. Night School tried to address the regulatory issues up front, and they found that without a proven base of support, the utilities commission had little incentive to work with them in an accommodating, expedient manner. And here we are.

About 50 Percent of Major Roads Don't Even Produce Enough Revenue to Cover Maintenance

The High-Five Interchange in Dallas, TX.

By my estimation, most people in this country think that gas taxes and other vehicle-related user fees cover the cost of building and maintaining our nation's roadways.

Those people are wrong, unfortunately, to the great detriment of our national transportation policy. The belief that roads are self-supporting is a big part of the reason that we continue to build new capacity even as our roadways deteriorate, and fail to invest in more cost-effective and efficient forms of transportation such as: literally everything else.

The Center for American Progress has a new report out that takes a close look at exactly how wrong this self-sufficiency argument is, and what share of our nation's major roadways are bringing in less money than they cost to maintain. What they find is that, for the most heavily traveled roads (interstates and principal arterials), at least 48 percent don't even bring in enough revenue to cover basic maintenance. In urban areas with populations over one million, that number jumps to 64 percent. And that's just maintenance—if you're asking how many get enough drivers to pay off initial construction and maintenance, you can probably expect much larger numbers.

The "Loss" row shows the number of miles in each geographic area where interstates and principal arterials are bringing in less revenue than it takes to maintain them. The number that are able to pay for maintenance and up-front construction costs are probably even lower. Screenshot from CAP report.

There are several reasons this is probably a drastic under-estimate of the number of roads that can't cover basic repair costs. For one, this report assumes a cost inflation rate of just one-percent per year for the next 30 years, which is low even by the most conservative estimates. If the real inflation rate of construction work is closer to 3 or 4 percent, which is not an unrealistic expectation, the share of underfunded roads probably increases to around 60 or 70 percent.

The report also only looks at a small number of the total roads in the U.S. It makes the point that because interstates and principal arterial roads tend to get a disproportionate share of total vehicle miles driven (and therefore generate a disproportionate amount of gas tax revenue), local and other lower-trafficked roads are probably in even worse financial shape. A lot of roadway degradation is due to factors other than driving, like weather, so these roads still require ongoing maintenance, even if traffic is relatively light. With less users, and therefore revenue, than the already-underwater major roadways, governments are likely filling gaps with other funds for the large majority of local roads.

Total vehicle-miles traveled in the U.S. flat, and per-capita VMT on the decline, so this is unlikely to change any time soon, particularly if we can't increase the gas tax at the local and federal levels. For states that begin taking into account the externalities of driving, such as carbon emissions and other forms of pollution, health and safety impacts, and opportunity costs relative to more productive uses of land, the calculus will undoubtedly come out even less favorable to roads.

California Cap-and-Trade Drives Up Gas Prices... By About 3 Cents... Maybe...

California's cap-and-trade program now covers gasoline, and—surprise!—it looks like the doomsayers were wrong.

State Republican lawmakers (and even some Democrats) recently tried to delay or exempt gas from the cap-and-trade program, arguing that California residents can't afford more expensive fuel, but they couldn't have picked a worse time for the fight: the update to the law took effect on January 1st, after a six-month period in which national prices took a 50 percent nose dive. This chart sums up the new tax's impact nicely:

Fear the tail

Since the new year, prices have gone up by about 3 cents. Ahhh!!! This compares favorably to apocalyptic predictions from the California Driver's Alliance, which claimed that prices would increase from 16 to 76 cents a gallon. Actual experts have estimated that the cap-and-trade program will increase gas costs by about $0.10 per gallon in the long run, and it's still very early, so we'll see.

As an admitted amateur in the field of gas price prediction (though with a much better record than several former presidential nominees), I'm not going to pull a Reason and pretend that three days is enough time to fully adjust to this new reality. At the very least, though, it's reasonable to assume that the carbon tax is responsible for the small bump over the past few days.

...Right?

Well, I got a little curious and looked at the same chart for some other states, it turns out that California's not the only state with a slight bump since the new year. Here are a few other states (and D.C.) with similar increases:

Oklahoma gas prices.

Washington State gas prices.

New York gas prices.

Washington, D.C gas prices.

There were also many states whose gas prices continued to slide since the 1st of the month, and even more where prices held steady, so none of this is to say that the cap-and-trade program won't result in persistently higher prices, even if the impact is slight. Maybe it just means we shouldn't jump to conclusions too quickly. Gasoline is still essential for many, many Americans, and if oil companies want to pass along the increased cost to consumers there's very little to stop them—that is, until more viable alternatives to driving are available. 

It's also important to remember that, while driving remains non-negotiable for millions of Californians today, the proceeds of the cap-and-trade program are primarily dedicated to funding projects that reduce the need for car dependence and decrease carbon emissions in the process. More than half of revenues—which are expected to reach at least $3 billion annually—will be spent on clean, energy-efficient transportation and sustainable, affordable housing. Over time, the fortunes of far fewer residents will be tethered to the price of gas; by then, hopefully, I can start sharing charts about improving environmental quality rather than a three-cent bump in gas prices.

Maybe Uber Should Just Provide Its Own Insurance to Drivers

One of the criticisms of Uber and other ridesharing companies has been that part of the reason they've been so successful is that they've foisted the cost of insurance onto drivers. Insurance companies don't like it when you use your car as for-hire transportation unless you're insured to do so, and that insurance is considerably more expensive. As a result, many drivers have been driving with inadequate insurance, which puts both their passengers and themselves at risk. The "insurance gap"—the time between when a driver logs into Uber and when they actually are dispatched to a customer—has been especially problematic.

Part of the problem is that, thus far, there aren't really hybrid insurance policies that account for drivers who use their cars for-hire some times, and for personal use during other times. This is being worked out to some degree, at least in California and perhaps elsewhere, but it seems like a relatively simple solution would be for Uber to just offer the insurance product themselves. The market isn't supplying them with what they need, so maybe it's time to live up to their innovative name and fill the gap themselves.

Perhaps this is too much of a diversification of interests for Uber, but compared to all the other issues facing Uber right now, this seems like a relatively easy fix. They've already got many of the essential parts in place. For one, no one knows better than them how often their drivers are getting into accidents, so setting their premiums should be fairly simple. They also have direct access to the data on how many hours of the week their drivers are on the job, so the hybrid rate can be perfectly calibrated, individually, to the number of hours of regular driving versus for-hire driving. They can ensure that their drivers are always fully insured by having the premiums deducted from their drivers' paychecks. Last, and perhaps most importantly, Uber is so large that they probably have enough drivers to pool their risk safely.

Uber's too big at this point to be acting like the brash upstart. It's solved some serious problems for urban residents like myself, for which I'm extremely grateful, but it's time to grow up and start addressing some of the problems it's created as well. If Uber's really interested in having their employees and passengers fully covered and "In Good Hands™," as it were, and if the market isn't providing the coverage necessary to ensure that peace of mind, Uber should just go it on its own. With a recent valuation at $40 billion they can certainly afford it, and they could even earn a small additional profit in the process. Their public image is in tatters right now, and if this will help put them on better terms with their critics, it's probably worth the headache.