Is a shift away from passes partly behind CTA’s falling ridership?
When you take a CTA bus or train, you have two options: pay for each trip as you take it, or buy a pass for unlimited rides over one, three, seven, or 30 days. For most of the last decade, riders had been increasingly choosing passes, as relatively low prices meant major savings over the alternative.
But a review of CTA financial documents shows that since 2013, there has been a dramatic turnaround, with riders switching from passes back to pay-as-you-go — a switch that just might have a connection to falling ridership and implications for the authority’s future fiscal health.
These documents don’t show the number of trips taken with each payment method, but they do show how much CTA earned in revenue — a good proxy, as long as relative prices don’t change dramatically.
In 2006, nearly 60 percent of CTA fare revenue came from single-trip tickets. But that number steadily declined, and by 2012, it was less than half. (There was a major fare hike in 2009 — but it increased pass prices and single-ride tickets by roughly similar amounts. So we can conclude that most of these changes reflect what kinds of fares riders were buying.)
But starting in 2013, there was a sudden reversal — from making up 50.4 percent of all fare revenue in 2012, passes declined to 43.7 percent in 2013 and 37.6 percent in 2014.
So what happened? And why does it matter?
Two big things changed in 2013. First, in January, the CTA raised prices dramatically on passes: one-day unlimited fare cards went from $5.75 to $10; three-days from $14 to $20; seven-days from $23 to $28; and 30-days from $86 to $100. But single-ride fares remained the same, at $2.00 for buses and $2.25 for rail.
Second, that summer, CTA introduced the new Ventra payment system. While in some ways Ventra made buying passes easier — you could load them onto a permanent card, rather than buying a new disposable card for each pass, as with the previous system — the rollout was not smooth, and the eventual phase-out of those disposable passes may have been confusing for some riders. The fact that the decline in pass use continues into 2014, the year in which the old payment system was entirely eliminated but long after the price increases, suggests that Ventra may have had an independent effect.
At first glance, this might not seem to be a big deal: after all, total CTA revenue went up in 2013, as the increase from pay-per-ride tickets more than offset the decline in pass revenue.
But the move might still have been bad for the long-term health of the authority. That’s because the switch from passes to pay-per-ride might be associated with ridership problems.
As CTA passengers bought more and more passes from 2005 through 2012, ridership generally increased, except for the worst years of the recession. But in 2013, as riders made a rapid move away from passes, ridership fell despite the relatively strong economy.
It’s probably true, as the CTA argues, that these declines are partly related to falling gas prices that have led to a national fall in transit ridership. But the national decline didn’t begin until 2014, a year after CTA’s — and continued into 2015, unlike the CTA, suggesting that something different is going on. And while Uber may also play a role, it entered the Chicago market in 2011, two years before these effects showed up.
This is all circumstantial evidence, of course, but it would make sense: buying a pass means that all of a riders’ costs have been paid up front, and so the effective cost of each additional trip is nothing. Someone who pays for each trip individually, on the other hand, would have to weigh the value of each ride against another payment. Research suggests that facing these kinds of costs, even if they’re small, can have a significant effect on decision-making.
Greater transparency about who is buying what kind of tickets could help shed more light on this issue. Chicago’s public transportation network is key to its economy — and ridership is key to public transportation’s fiscal health.