Normative framework for transit fare policy-making

This paper presents a normative model for transit fare policy-making. Key elements of the model are: establishing service policy and ridership objectives, developing an overall financial philosophy, making fare level decisions, making structural pricing decisions, and designing implementation strategies. In general, the overall objectives of a transit agency regarding service quality and ridership levels should be the main impetus behind any fare program. Identifying where transit lies on the continuum of being a public versus a private service should frame the overall financial philosophy of a transit agency. From this the specification of farebox recovery targets should follow. Deciding upon structural aspects of a fare program perhaps represents one of the most important and most frequently overlooked steps of the process. Specific cost-based and value-based fare strategies should be considered. Implementation involves making the adopted fare strategy work. Key implementation issues are: fare payment and collection techniques, necessary service changes, marketing and promotional programs, and consensus-building. The model presented calls for feedback among these steps to allow an iterative, yet comprehensive, approach to fare policy-setting.