Smart Passes would reduce revenue loss in shutdown

It is looking like the federal government will shut down next week, and many employees will be staying home without pay. Politics aside, this is bad for Metro. The loss of riders will reduce WMATA’s revenues, but if those workers instead were purchasing transit passes, Metro’s bottom line wouldn’t be hit so hard.

WMATA announced yesterday that they plan to maintain the current rush hour schedule, but in order to reduce costs will run shorter trains if demand is light. Their press release estimated about a 5-20% reduction in riders, or between 35,000 and 140,000 trips.

Reducing the train lengths will save electricity and maintenance, but the most expensive part of running a train is the operator, and that’s not being reduced. Metro’s costs will remain largely the same, and the reduction in riders will reduce fare revenue.

In my estimate, Metro will lose about a quarter million dollars per day during a shutdown ($2.50 per trip times 100,000 trips). This loss would be smaller if Metro had Smart Passes.

Most federal workers taking Metro get a subsidy to take transit. They can either receive the amount of money needed to commute from their home every work day, or monthly/weekly passes that cost the same amount or less.

With few and inflexible rail passes available today, most workers who ride Metrorail choose the first option for SmartBenefits. If they don’t ride, they don’t spend the money on Metro, and WMATA gets none of the money. The worker either hangs on to it for other rides later on, or it goes back to the federal government.

The Smart Pass concept is designed to be the same price as a daily commute, meaning many federal workers would opt for a pass instead of fare value. If the government shuts down, or there’s a major snowstorm, or anything else, WMATA would still have collected the same amount that month.