Metro is planning to raise bus, rail, and paratransit fares this year, and last week Michael Perkins talked about the transfer discount. In the comments, some talked about the difference between bus and rail farebox recovery. But those numbers aren’t really comparable.
"Farebox recovery” is the amount of operating expenses that fares cover. For example, if a system costs $1 million to operate every year and takes in $500,000 dollars in fares, it would have a farebox recovery of 50%. A profitable system would have a number above 100%.
In the WMATA system, Metrorail has a farebox recovery ratio of 67.5%. Metrobus has a farebox recovery of 24.3%. Both on Michael’s post and on Twitter, readers asked whether rail passengers were subsidizing bus passengers. Why should rail passengers pay 67% of the cost of riding, but bus passengers pay only 24%? Unfortunately, that’s not the whole story.
Not every rail rider pays 67% of the cost of his or her trip. Not every bus rider pays only 24%. The farebox recovery varies from route to route. At any rate, the Metrorail and Metrobus farebox recovery rates aren’t directly comparable because each service has different goals and measures success differently.
Ridership versus coverage
Jarrett Walker, author of the book Human Transit, divides transit service into two broad categories: ridership service and coverage service.
These two types of service come from the conflicting goals transit providers face. On the one hand, they’re supposed to cover all of their service area. On the other hand, they’re supposed to have as many riders as possible for as little subsidy.
Generally, agencies solve these competing goals by providing both types of service. In the WMATA service area, there are clear examples of ridership service. The overcrowded 16th Street Line is a perfect example. The busy H Street Line is another.
While some lines are clearly ridership lines, much of the Metrobus network (and especially the jurisdiction-operated bus services) are coverage lines. These are lines that are never going to compete with car trips, but they serve areas that WMATA and local governments feel should be covered. If the agency was only concerned with profitability, these areas wouldn’t have any service.
Lower-performing coverage routes include the 2T in Virginia and the R3 in Maryland, each with about 14.8% recovery. But even in the District, some lines are coverage lines. The 64 is a borderline case. It runs down 11th Street NW between frequent service lines on Georgia Avenue and 14th Street, and is within walking distance of both. But for those who aren’t willing to walk further, it’s a coverage service, though it has a decent farebox recovery of 37.9%.
Apples and oranges
And this is where the problem with comparing rail and bus comes in. In this region, and in most regions, most rail service is ridership service. This is for several reasons. At least in modern systems, Federal Transit Administration rules only allow rail lines to be built if they’ll have good ridership. And transit agencies themselves don’t make large capital investments in rail unless they’re going to have good ridership.
Buses, on the other hand, fall into both ridership and coverage categories in almost every region. So when we compare rail, which is almost entirely composed of ridership lines, to bus, which is a mixture, we are comparing apples to oranges.
Farebox recovery is not a good metric for coverage lines, because their goal is not to generate ridership, but rather to provide service to areas the agency thinks need to be served, regardless of productivity.
Since the Metro rail lines are all ridership lines, they have a very high farebox recovery ratio. Some bus lines in DC have good farebox recovery. But much of the network has worse farebox recovery because by design it’s supposed to.
Several of WMATA’s bus lines cover more than half their cost through fares, including the X2 bus on H Street and the 70 bus on Georgia Avenue. One bus line, the 5A to Dulles Airport, actually has a farebox recovery ratio better than the rail average.
What does this say about WMATA bus fares?
Really, this doesn’t say anything about WMATA’s bus fares.
The farebox recovery ratio measures how much rider fares cover the cost of service, and that’s it. In the WMATA budgeting process, the agency figures out the cost of providing the service, and then they determine how much money they’ll get from the jurisdictions. The remainder has to come from fares. Essentially, the agency (and the funding jurisdictions) determines what the farebox recovery ratio is going to be.
On individual lines, farebox recovery gives us a sense of the productivity of the route. But just because a route is performing poorly in farebox recovery doesn’t mean it shouldn’t exist or that the fare is too low. Sure, if it’s below a certain threshold, the agency can look to determine how to make it more productive or whether to keep it. And WMATA does do this. But they track a whole set of performance measures, not just farebox recovery.
Some people say that we should strive to make the bus and rail farebox recovery ratios the same, or at least closer to each other. But that’s not a goal that works. At least not as long as we have coverage-type services in one set, but not in the other. If anything, we shouldn’t try to make bus have a higher farebox recovery ratio; we should try to make rail have a lower one.
Nationwide, heavy rail systems like Metro have an average cost recovery of 47.2%, much lower than WMATA’s 67.5%. On the other hand, the US agencies that operate both heavy rail and bus systems have an average bus farebox recovery of 28.0%, barely higher than WMATA’s 24.3%.
Over the past few years, Metro has kept bus fares lower as a conscious decision because many people who rely on buses have limited incomes. That’s a perfectly valid policy decision. And the result, of course, is a low farebox recovery ratio.