Means based Transit Fare Pricing Study

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Regional Means-Based Transit Fare Pricing Study
Technical Advisory Committee (TAC) Meeting #4
Metropolitan Transportation Commission
Bay Area Metro Center
Ohlone Room, 1st Floor
375 Beale Street, San Francisco
Friday, December 16, 2016
10:00 a.m. – 12:00 p.m.
AGENDA
1. Introductions (5 minutes) All
2. Notes from TAC Meeting #3* Jennifer Yeamans
3. Study Progress to Date and TAC Meeting Goals* (5 minutes)
Project manager will recap study activities to date and discuss the goals for
TAC Meeting #4.
Jennifer Yeamans
4. Draft Alternatives Analysis of Scenarios* (60 minutes)
The consultant team will present draft findings of the formal alternatives
analysis and identification of preferred scenario(s) for TAC input and
discussion, as well as proposed next steps based on these findings.
Joe Speaks
5. Draft Project Overview Report* (40 minutes)
The consultant team will present the draft project overview final report for
TAC comment and feedback. The purpose of this report is to summarize the
overall project purpose, findings, and recommendations.
Joe Speaks
6. Next Steps / Schedule* (5 minutes)
Project manager will review the upcoming project activities and schedule.
Jennifer Yeamans
7. Public Comment (5 minutes)
* Denotes attachment in packet.
MTC Staff Liaison: Contact Melanie Choy at 415.778.6607 or mchoy@mtc.ca.gov regarding this agenda.

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business.
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unfeasible, the Chair may order the removal of individuals who are willfully disrupting the meeting. Such individuals may be arrested. If
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Attachments are sent to Committee members, key staff and others as appropriate. Copies will be available at the meeting.
All items on the agenda are subject to action and/or change by the Committee. Actions recommended by staff are subject to change by the
Committee.

Item 2
Meeting Notes
Regional Means-Based Transit Fare Pricing Study
Technical Advisory Committee (TAC) Meeting #3
Thursday, August 4, 2016 10:00 am-12:00 pm
Metropolitan Transportation Commission
Ohlone Room, 1st
Floor
375 Beale Street, San Francisco 94105
Attendees:
Asha Agrawal Mineta Transportation Institute/San Jose State University
Jennifer Yeamans Yeamans Consulting
Joe Speaks CH2M HILL
Celestine Do CH2M HILL
Pat Piras Public
Tom Harais ECCTA
April Mo SFCTA
Yeying Huang SFCTA
Barbara Duffy Marin Transit
Randolph Hudson Contra Costa Employment and Human Services
Cathleen Sullivan Alameda County Transportation Commission
Kimberly Koempel Alameda County Transportation Commission
Bob Allen Urban Habitat
Charlotte Barham BART
David Weir MTC
Melanie Choy MTC
Anne Richman MTC
Kenneth Folan MTC
Scott Lane MTC Policy Advisory Council South Bay
Nathan Landau AC Transit
Brytanee Brown Transform
Introductions
 MTC staff member introduced the new MTC project manager, Jennifer Yeamans of Yeamans
Consulting, and the goals of the study and this meeting
Evaluation of Alternative Means-Based Transit Fare Scenarios Discussion
 Consultant staff summarized key highlights from Draft Technical Memorandum #3: Evaluation of
Alternative Means-Based Transit Fare Scenarios
 Consultant staff introduced the three Affordability scenarios and two Revenue Generating
scenarios analyzed, emphasizing that the scenarios need to be refined in terms of scale and
policy decisions.
 TAC member question: Does low income definition of under $35,000 a year account for
household size? MTC staff said that the $35,000 figure is based on the region’s average
household size of two to three persons in relation to 200% of the federal poverty guidelines.

Regional Means-Based Transit Fare Pricing Study August 4, 2016
Meeting Notes TAC Meeting #3: Alternatives Evaluation Page 2
Affordability Scenarios
Scenario A1: Discounted Fares & Passes – 50% discount on all fares
 TAC member questions: How would a customer use this scenario on BART as a cash customer?
Consultant staff member: The details and logistics of that need to be determined.
 TAC member question: Do these boarding numbers assume 100% eligible customer
participation? Consultant staff member: Yes, although it is hard to predict the uptake of the
program. We would need to refine the program to manage participation levels.
 TAC member question: What lessons can we learn from other agencies? Consultant staff
member: An example of a lesson learned is from the ORCA LIFT program in Seattle where they
scaled outreach to help regulate enrollment.
 Audience question: Is the ridership based on current population? Consultant staff member: The
ridership is based on actual ridership and share of low income riders (based on survey data). The
aim will be to make assumptions and data sources more clear.
Scenario A2: Accumulator with Fare Capping
 TAC member question: Does this program have the goal of helping agencies push ridership onto
Clipper? MTC staff member: The goal of the study related to fare coordination is to increase
regional fare coordination across agencies. Clipper is viewed as a means to offer low-income
discounts to customers.
 Audience question: Are you assuming 100% enrollment in the program when considering
ridership and fare elasticity? Consultant staff member: Yes, with the implementation of this fare
discount we are assuming that all eligible riders would enroll, and there will be more trips taken
as a result of the discount.
 TAC member question: Does the fare revenue impact include administrative overhead?
Consultant staff member: No, fare revenue impact does not include administrative costs, which
are analyzed separately in the report.
Scenario A3: Cash on Clipper – 1:1 match funds provided by rider
 Audience question: Will the funds from one month roll over to the next one? Consultant staff
member: We have not yet defined these programs to that level of detail.
Revenue Scenarios
Scenario R1: Eliminate non-mandated discounts
 TAC member question: Who comprises the largest group of non-mandated discount recipients?
Students? Consultant staff member: I believe that students/youth are the largest group but we
would need to check on that. TAC member comment: Yes, youth is a big group and eliminating
the discount would be a concern. Agency TAC member comment: We discount our youth fare so
this scenario would help us realize some revenue.
 TAC member comment: How would programs like Muni for Youth work with this proposed
scenario? We would have to figure out the various pots of funding.
Scenario R2: Increase fares – 10% fare increase in all fares

 Consultant explained that this scenario analyzed the revenue that would be generated with a
10% fare increase implemented by all operators.
Scenario Evaluation
 TAC member question: Did you use average elasticity in your calculations? MTC staff member:
Yes, we used average elasticity that is used nationally by other transit agencies and FTA study
documents, with considerations for both bus and rail modes. Consultant pointed out that
elasticity can vary by region, population, and agency.
 TAC member question: Did you calculate revenue for a higher percentage fare increase, higher
than 10%? Consultant staff member: No, we’ve only conducted calculations for a 10% fare
increase.
Other Evaluation Considerations: Scalability
 Consultant asked the group: Should we look at adjusting participation in this program by
geographic location, for example in the inner East Bay where there are a higher percentage of
low income households.
 The group discussion suggested that targeting geography or agency could make sense for a pilot
program, with future expansion to follow. However, there was a general sentiment that all
regions in the Bay Area have equal need for such a program; with the exception of the San
Francisco MTA which has several discount programs that already meet the needs of low-income
riders.
Next Steps: Formal Alternatives Analysis of Scenarios
 MTC staff member: We need a more detailed evaluation framework and criteria to move
forward with the formal alternatives analysis. We can use the study goals as the criteria but
which goals are more important? Are there additional considerations not currently included?
MTC staff concurred and suggested that the goals be expanded to more specific objectives
aligned to each goal.
 TAC member comment: Low income people are being displaced to less urban areas. We want to
have scenarios that account those who need transit in inner East Bay, inner Contra Costa, etc.
because we need to have a context for these scenarios.
 TAC member comment: Instead of looking at affordability for all, we could refine the scenarios
by looking at areas that are poorly or well served by transit. The point was made that while
affordability is important, service level are essential; care needs to be taken not to reduce
revenue to transit agencies.
 Audience question: Is this an opportunity to de stigmatize transit and make it more attractive?
Consultant staff member: No, this study is about targeting low income riders and promoting
affordability.
 TAC member comment: Our riders in Marin are very low income. I advocate that you should
implement the program on all agencies. We wouldn’t necessarily increase fares but we would
join a low income program. What is the proposed schedule for implementing these scenarios?
MTC staff member: There is no current plan or recommendation to implement a low-income
program. These scenarios represent potential programs and explore the trade-offs that come

with such a program. Results of this study and whether there is any recommendation is yet to
be determined.
 MTC staff member: The program will be more cost effective if means testing is centralized.
 TAC member comment: We ought to be implementing this program throughout the Bay Area.
 TAC member comment: Goal 2 – Building Regional Consistency – is distinctly less important,
lovely to have but a potential barrier to bringing a program into existence. Goals 1 & 3 are
distinctly more important to bringing benefits to low-income riders.
 TAC member question: Are we attempting to standardize fares? MTC staff member: Fare policy
standardization is not a goal of this study, but developing some kind of standard discount could
help make the program easier to understand and implement.
 TAC member comment: Goal 1 – increase affordability – is a high priority. Riders served in
Antioch and outer regions have grown substantially. We can redirect money from agencies with
more affluent demographic to less affluent areas with transit. However, Goal 3 – developing a
financially viable and administratively feasible program – needs to be the number one goal.
 TAC member comment: We need to contextualize what $100M means when considering a low-
income support program. This is a very substantial sum of money when compared to what we
spend on affordable housing and food assistance?
 Audience comment: Affordability is important but it does not do any good if transit is not
available. Consultant staff member: The intention is to build transit, not tear it down. This is the
reason we have also scaled potential funding sources to offer policy makers as a way to replace
any lost revenues.
 Audience comment: Goal 2 is nice to have. We need to refine our scope. Are you looking at low
income riders or low income residents? The former have access to transit already. Are you
providing affordability for the occasional or frequent rider? Break down Goal 1 to distinguish
between occasional or frequent riders.
 Audience comment: There is no significant variation in financially viability amongst the
scenarios, which does not help guide policy makers toward any one of these solutions. The
other goals need to be expanded to specific policy objectives to help choose a program.
 TAC member comment: AC Transit did a survey that most riders use transit pretty often so a
policy focusing on frequent riders would help AC Transit.
 TAC member comment: Even without a discount, the accumulator would benefit the low-
income rider by not requiring a large purchase up front. I want the accumulator. If you fail to
provide a meaningful discount, you still have this useful mechanism. If it is subsidized, that is
even better.
 Audience comment: What about restaurant workers who bike because they cannot afford a
Clipper pass? We need this program to focus on occasional riders in addition to frequent riders
with more and free transfers. We need to come up with simple and easy messaging. Simplify
message to reach out to people. How do we get people to trust us to get means tested?
 MTC staff member: should we include an additional scenario, such as the Interagency Pass?
Have we analyzed enough? The group felt that the likely policy and administrative hurdles were
already significant, and that an Interagency Pass seemed like an even greater challenge that may
not be realistic to take on with this program.

 TAC: It is already complicated with existing scenarios so we should leave out additional scenario.
Use Goals 1 & 3 and leave out G2. Break out core rider targets vs. periphery riders, Clipper users
vs. those who choose not to use Clipper. Focus on core riders using Clipper.
 TAC member comment: There is a lot of material to digest. Keeping it simple is key. Focus on
low income riders who have to get to work. Welfare system has tremendous requirements for
work, and we should help reimburse riders for transit to get to work. We should lean on
technology for solutions.
 Audience comment: There is an opportunity to have people ride more with an accumulator. We
can invest in deep outreach and teach someone to use Clipper.
 TAC: We need to address the issue of easily acquiring a Clipper card. This is currently seen by
some to be a barrier.
 TAC: I like Affordability scenario A1 with 50% discount because it’s intuitive and easy to
understand. Accumulators are more complicated to explain.
 Audience comment: We need to determine what low income people we are targeting. Goal 1
could be expanded with sub-criteria such as rider frequency, cash payment options, reaching
those in greatest need, overlap with existing programs, simplicity for users, and participation
goals/scalability. Do we just build features of a scenario on a smaller scale with limited resources
or meet the actual need?
 TAC member comment: If we increase the administrative burden for the scenarios, it will be
harder to implement. Minimizing administrative burden to transit agencies is important.
 Audience comment: I’m interested in a hybrid system with accumulator as well as cash on the
card. Perhaps users get credit for referring other low income riders to this program. Consultant
commented that combining the features of all scenarios could make a great product to meet
various rider needs, but it creates a program that is more expensive, more complicated, and
takes longer to implement.
 Audience comment: We can learn from Plan Bay Area’s outreach efforts and roll this program
out as consistent with the goals and requirements previously established.
 MTC staff member: With this discussion, it appears that the TAC does not want to analyze an
additional scenario.
Upcoming Work
 MTC staff member: We need to identify more detailed evaluation parameters for program. The
comments and opinions expressed in this meeting will help us develop those specific policy
objectives.

—over—
Item 3
TO: Regional Means-Based Transit Fare Pricing Study
Technical Advisory Committee (TAC) Members
DATE: December 9, 2016
FR: Jennifer Yeamans, Yeamans Consulting
RE: Project Update and TAC Meeting #4 Goals
Study Recap and Progress to Date
At your last TAC meeting, the TAC reviewed detailed quantitative and qualitative analysis of the
five study scenarios. Three affordability scenarios were chosen to elucidate different
mechanisms for structuring and delivering discounted fares to low-income riders, as follows:
 A1: Discounted Fares and Passes: low-income riders can purchase discounted fares and
passes.
 A2: Accumulator with Monthly Cap: low-income riders would allow riders to purchase
pass products (such as monthly passes) in small increments rather than paying the full
price of the pass up-front. After a set amount has been reached for the pass period, all
remaining trips in the pass period would be free for low-income riders.
 A3: Cash on Clipper: low-income riders would receive a stipend in the form of cash
value added to a Clipper card, which could be used to ride any transit service in the
region accepting Clipper for payment.
Two revenue-generating scenarios were selected to analyze the levels of new fare revenues that
might be generated to offset the discounts provided in the affordability scenarios.
 R1: Eliminate Non-Mandated Cash Discounts: eliminate all fare discounts beyond
those that comply with minimum Federal requirements, which are to provide half-fare
discounts to seniors 65 and older, persons with disabilities, and Medicare card-holders,
and apply only to off-peak hours and cash fare payments.
 R2: Increase Fare Increases for Non-Low-Income Riders: raises transit fares in the
region by 10%.
In addition, the TAC reviewed and provided input on an evaluation framework to analyze the
scenarios and determine whether a preferred scenario might be identified. The consensus was the
that the study’s three major goals should constitute the basic evaluation criteria for the scenarios:
1. Make transit more affordable for the Bay Area’s low-income residents.
2. Move towards a more consistent regional standard for fare discount policies.

3. Define a transit affordability solution that is financially viable and administratively
feasible, and does not adversely affect the transit system’s service levels and performance.
TAC members suggested that the affordability and feasibility goals should be given equal weight
in the scenario evaluation and be weighted more than the regional-consistency goals.
TAC Meeting #4 Goals
At TAC Meeting #4 on December 16, project staff and consultants will seek input on the on the
formal evaluation of the alternatives, a draft of which is included in this packet as Draft
Technical Memorandum #4.
In addition, the project team will introduce a draft study overview report which is intended to
provide a summary overview of the study in its entirety, including the project’s origin and
purpose, an overview of the research conducted about peer and related programs, the analysis
and evaluation of the five scenarios, and findings and recommended next steps. The study team
also seeks comment and feedback from the TAC on this draft overview document.
For more information, please contact the study’s project manager Jennifer Yeamans at 415-845-
9838 or jennifer@yeamansconsulting.com.

Final Draft
Regional Means-Based
Transit Fare Pricing Study
Technical Memorandum #4:
Alternatives Evaluation and
Recommended Actions
Prepared for
375 Beale Street
San Francisco, California 94105
December 07, 2016
Item 4

December 7, 2016
Table of Contents
1.0 Original Study Goals..........................................................................................................................1
2.0 Affordability and Revenue Generating Scenarios.............................................................................1
Affordability Scenarios..............................................................................................................................1
Revenue Generating Scenarios.................................................................................................................1
3.0 Policy Direction and Prioritization ....................................................................................................2
4.0 Recommendations............................................................................................................................3
Affordability Scenarios..............................................................................................................................4
Revenue Generating Scenarios.................................................................................................................4
5.0 Next Steps .........................................................................................................................................5
Policy Implementation..............................................................................................................................5
Technical Implementation ........................................................................................................................7
Pilot Program ............................................................................................................................................8
Appendix A: Evaluation of Objectives........................................................................................................12

Regional Means-Based Transit Fare Pricing Study:
Alternatives Evaluation and Recommended Actions
December 7, 2016
1
Three affordability and two revenue generating scenarios were evaluated for the Regional Means-Based
Transit Fare Pricing Study and presented in Technical Memorandum #3: Evaluation of Alternative
Means-Based Transit Fare Scenarios. The purpose of this memorandum is to evaluate the scenario
analysis results in the context of the study goals and identify recommended actions based on the
evaluation results. Based on this evaluation, two scenarios emerge as preferred alternatives.
1.0 Original Study Goals
The original goals of the Regional Means-Based Transit Fare Pricing Study served as the basic criteria for
evaluating the fare scenarios and identifying the preferred alternatives:
1. Make transit more affordable for the Bay Area’s low income residents.
2. Move towards a more consistent regional standard for fare discount policies.
3. Define a transit affordability solution that is financially viable and administratively feasible, and
does not adversely affect the transit system’s service levels and performance.
2.0 Affordability and Revenue Generating Scenarios
Alternatives identified as Affordability scenarios would provide a discount for low income riders;
Revenue Generating scenarios would provide revenue to off-set some of the fare revenue losses of a
low income program.
A1 – Discounted Fares and Passes for Low Income Riders
This scenario would create an additional discount category for low income persons, which would allow
individuals below a certain income threshold to pay fares or purchase passes at discounted prices.
A2 – Accumulator with Monthly Cap for Low Income Riders
Accumulators are alternatives to pass products. They cap fares or provide bonus trips based on a
threshold (number of boardings or value of fares paid) within a defined period of time. Accumulators
with caps effectively allow riders to purchase the benefits of pass products (e.g., monthly passes) in
small increments rather than requiring payment of the full price of the pass up-front. In this scenario,
fares would be capped on a monthly basis, and the cap would be set lower for low income riders than
for the general population.
A3 – Cash on Clipper® for Low Income Riders
With this scenario, low income riders would receive a stipend in the form of cash value added to a
Clipper® card. This stipend could be used to ride any transit service in the region. In this scenario, the
stipend would be provided on a one-to-one match basis, with each dollar added by the rider matched
with a stipend dollar. This scenario would not require changes to transit operators’ fare policies.
Revenue Generating Scenarios
R1 – Eliminate Non-Mandated Cash Fare Discounts
This scenario would generate revenue to help fund a low income transit fare program by eliminating all
fare discounts beyond those that meet Federal requirements (i.e. half-fare discounts on cash fares and

December 7, 2016
2
during off-peak hours for seniors age 65 and older, persons with disabilities, and Medicare recipients).
Discounts beyond those that are federally mandated would be eliminated and riders currently
benefitting from those discounts would pay full fares, although some of those customers would likely
become eligible for the low income program.
R2 – Implement a 10% Fare Increase
This scenario would generate additional fare revenue by raising transit fares in the region by 10% across-
the-board. The fare increase would apply to all fare products of all Bay Area transit agencies.
Bay Area transit agencies set their own fare policies and fares and decisions about fare changes like
these are made by each agency. Eliminating non-mandated fare discounts (R1) is proposed as a regional
concept, but would require policy changes by each transit agency’s Board of Directors. While not
infeasible, eliminating non-mandated fares would involve the one-time reversal of longstanding policy.
This would be a lengthy, decentralized, controversial endeavor that could span several years and may
not result in changes at all agencies. Similarly, a 10% fare increase (R2) would require changes to each
individual agency’s fare policies. However, the process for fare increases and the required justification is
more predictable. The revenue raised by a 10% fare increase (on the order of $66 million) could help to
offset fare revenue losses, which will vary depending on implementation details of the chosen scenario
and could be implemented as a phased (2- or 3-step) fare increase, depending on the agencies’ other
fare revenue needs and priorities.
3.0 Policy Direction and Prioritization
Throughout the study, MTC provided policy direction and guidance for a low income fare program,
including the structures and assumptions behind the Affordability and Revenue Generating scenarios
and the resulting ridership and fare revenue projections that are included in Technical Memorandum #3.
Following the delivery of that memo, the Study’s Technical Advisory Committee (TAC) met to review the
ridership and fare revenue projections and also provided the following broad-based input on policy
direction for a means-based fare pricing program for the Bay Area:
 Affordability was further defined as helping all qualifying riders similarly every month up to the
budgetary limits of the program. It does not necessarily favor certain subgroups of low income
riders over others. While improving affordability is considered to be the primary policy
objective, it can be relative:
 A 50% discount is comparable to FTA’s mandated discounts for seniors and persons with
disabilities, and is an appropriate level of discount to provide a meaningful benefit to users.
 Any discount would be viewed as helpful, as long as program qualification, enrollment, and
participation is simple, straightforward, and streamlined for agencies and users alike.
 Feasibility was further defined to include nearer-term implementation that does not rely on
Clipper 2, which may still be several years away from full implementation.
 Reliance on Clipper to distribute subsidies is neither a key concern nor a major potential barrier;
having a cash-paying option is not essential to a low income program.

December 7, 2016
3
 Limiting participation to a specific geographic area of the region was seen by some members of
the TAC as potentially troublesome, unless the geographic limitation is part of a phased
implementation or a pilot program.
Based on the original MTC study direction, the established study goals, and the TAC’s feedback, the
CH2M team conducted a weighting and prioritization analysis with the following objectives:
1. Rider Affordability: Achieving this goal is a top priority for the program and as such it has a total
weight of 40%. This goal is defined by financial affordability and ease of access through
objectives such as ease of enrollment and participation, provision of the same discount to all
eligible individuals, and means testing based on eligibility for another social program such as
CalFresh to facilitate eligibility assessment and access to the program.
2. Administrative Feasibility & Financial Viability: Along with Rider Affordability, this goal is
weighted as a top priority. It also has a total weight of 40%. This goal is defined by objectives
such as scalability to available funding, centralized and electronic management,
implementability under the current Clipper® system, and providing Clipper®-only payment to
minimize agency overhead.
3. Consistent Regional Standard: This goal is weighted as a secondary priority after the primary
goals of Rider Affordability and Administrative Feasibility & Financial Viability. Because
consistency was seen as less central to a program compared to affordability and feasibility, it has
been assigned a lower weighting (20%). Throughout the study, MTC staff and study participants
continually emphasized that regional consistency is desirable, especially with respect to using
Clipper®, making any low-income discount program available throughout the region, and
developing universal standards for program qualification. However, study participants also
recognized that changing agency fare policy to create a region-wide multi-agency fare structure
would be complex and could become a barrier to timely implementation of any low-income
program. With these complexities in mind, the TAC suggested that the study should prioritize a
scenario that does not depend on new multi-agency fare policy. MTC staff maintains that
coordinated regional fare policy could benefit all riders, but also acknowledges the significant
implementation barriers that come with any scenario that depends on region-wide multi-agency
fare policy.
4.0 Recommendations
The goal weightings and the resulting Scenario scores are summarized in the following table:
Study Goals Weight
A1: Discounted
Fares & Passes
A2:
Accumulator
A3: Cash on
Clipper
Affordability 40% 4.30 2.80 3.80
Administration & Feasibility 40% 1.25 1.63 4.38
Regional Consistency 20% 4.00 3.00 4.50
Weighted Score 100% 3.00 2.40 4.20
Based on these weightings, A3 – Cash on Clipper for Low Income Riders has the highest score and A1 –

December 7, 2016
4
Discounted Fares and Passes for Low Income Riders ranks second. The qualitative evaluation process is
documented in the matrix provided in Appendix A: Evaluation of Objectives.
Among the three Affordability Scenarios and based on the criteria defined here, A3 – Cash on Clipper
scores the highest against two of the study goals and overall. It is the most feasible and would require
the least administrative effort to implement. All scenarios support regional consistency through the use
of Clipper® and standardized eligibility requirements; but A3 scored slightly higher for not depending
upon the adoption of new regional fare policy which could be a barrier to timely implementation. This
scenario ranks lower than A1 (Discounted Fares and Passes) against the Affordability goal, primarily
because it does not provide the same discount to all eligible individuals; instead, the value of the stipend
depends on the frequency of travel, based on the value riders add to their Clipper® cards.
The second-ranked scenario, A1 – Discounted Fares and Passes, scores the highest on Affordability and
the second highest on both Administration & Feasibility and the Regional Consistency goal. With
respect to Affordability, A1 ranks the highest of the three scenarios on providing the same discount to
all eligible individuals since every fare paid from stored value and every pass purchased would be
discounted at the same rate. One of the assumptions behind this scenario is that it would require the
creation of a new Clipper® fare category for low income riders, making it more difficult from an
Administrative Feasibility perspective. Scenario A1 would have scored more favorably if it relied on an
existing Clipper® discount-fare category (such as RTC) rather than depending on the creation of a new
low income fare category to be implemented fully on Clipper®.
Scenario A2 – Accumulator with Monthly Cap ranks the lowest of the three scenarios. While optimism
about the potential of accumulators varied among stakeholders, improving the ranking of this scenario
would require reworking the objectives and their weightings in order to prioritize regional fare policy
coordination and accommodate a longer implementation timeline dependent on C2 implementation. It
would also necessitate a more detailed exploration of the financial impacts and viability of capping,
given the complex revenue impacts. If there is sufficient interest in the accumulator alternative,
consideration could be given to implementing it at a later time, with the rollout of C2 and the
introduction of accumulators regionwide.
It is also imperative to recognize that there are substantial unfunded costs as well as potential service
implications associated with each of the Affordability Scenarios if implemented in fully unconstrained
terms, as discussed in Technical Memorandum #3. Those concerns were generally considered in the
evaluation process, but the precise impacts depend on the final program design and rate of adoption.
Those concerns would need to be addressed before any of the three scenarios can be recommended for
potential implementation.
Revenue Generating Scenarios
Changes to each agency’s fare policy will be complicated and will need to be discussed at the agency
level, in conjunction with regional plans to fund and implement a low income program. The Revenue
Generating scenarios suggest that revenues on the order of $53-$66 million could be raised if all of the

December 7, 2016
5
transit providers either eliminated all non-mandated fare discounts or successfully implemented a 10%
across-the-board fare increase.
Decisions to make fare changes of this nature must be made by each agency’s policy board. Fare
changes of this scale are likely to be extremely difficult to implement consistently across the region by
all operators and on the same timeline, particularly considering the agencies’ other fare revenue needs.
Although increasing fare revenues represents one potential long-term funding source for providing low-
income fare discounts, the timing of, and revenue from, individual agency fare increases will be
inconsistent. Consequently, additional non-agency funding and implementation resources would need
to be identified and considered depending on how a program might be developed and what financial
and policy assumptions are maintained.
5.0 Next Steps
As MTC continues to develop the concept of a regional means-based transit pricing program for the Bay
Area, there are both policy and technical decisions that will need to be made. CH2M also recommends
conducting a pilot program to test the viability of the program.
At this point in the study, MTC staff members and the TAC have participated in discussions about
defining and evaluating conceptual program alternatives. The region’s transit agencies are represented
on the TAC by AC Transit, BART, Marin Transit, Petaluma Transit, SFMTA, and VTA; the TAC also includes
organizations representing low income/equity concerns (Mineta Transportation Institute, Urban
Habitat) and providing human services (Alameda County Social Services Agency, Contra Costa County
Employment and Human Services Development).
A next step will be to share the study’s findings and recommendations with all Bay Area transit agencies
and set initial direction through a plan to pilot one or both of the top-ranked Affordability alternatives.
Policy Implementation
Implementing or piloting a means-based transit pricing program will require setting specific policies for
program parameters. A similar approach was taken with the ORCA LIFT program, which uses the ORCA
smart card to successfully deliver reduced fares to riders who meet income thresholds on several transit
providers in the Seattle region.
 Target Population and Income Threshold: Provide clear eligibility definitions, including the
income thresholds and residency requirements that must be met to qualify for the program. For
the alternatives evaluation, all residents of the nine Bay Area counties were considered
potentially eligible; the income eligibility threshold was set at 200% of the federal poverty level.
 Discount Structure: Select the alternative(s) (e.g., A1 – Discounted Fares and Passes and/or A3 -
Cash on Clipper®) that will be piloted. Both of these alternatives evaluated 50% discounts and
there is general agreement among TAC participants that the program should provide a 50%
discount if that is feasible within the scope of the program. The results of a pilot should help to

December 7, 2016
6
confirm whether this is the “right” level for eligible transit users, the Bay Area transit providers,
and MTC.
 Geographic Scope: Assuming that the program will be available for customers of transit
providers throughout the nine county region, determine whether it should be implemented in
phases, with different parts of the region and transit agencies coming on line at different times,
and if so, how to phase it. Part of this decision will also be where to conduct a pilot program
and which agencies should participate.
 Means Testing: Specify how eligibility will be assessed, considering opportunities to partner
with Bay Area social service agencies. Conceptually, a means-based transit pricing program
would take advantage of the existing network of service agencies to manage program eligibility,
similar in principle to VTA’s UPLIFT and TAP programs, and the ORCA LIFT program in the Seattle
area. These agencies would leverage their existing eligibility assessment procedures and
expertise to verify incomes, determine eligibility for the transit fare program, and issue a
credential to confirm eligibility.
 Income Verification: This process will require agreement with agencies to verify income. One
approach that could be piloted would be to have agencies that assess eligibility issue the transit
credential to anyone eligible for a pre-existing program such as CalFresh, thereby minimizing the
additional costs to verify and certify eligibility since no additional documentation would be
required. This approach best supports the criterion that enrollment and participation should be
easy and based on eligibility for another social program. Otherwise, the forms of
documentation acceptable for confirming income for employed, self-employed, and
unemployed individuals will need to be specified and there will likely be a cost, as in Seattle,
associated with assessing, verifying and certifying eligibility.
 Build Consensus: If the program is to be successful and sustainable, there will need to be
agreement on a shared regional approach to the program across transit providers, social,
human, and health service agencies, and community organizations, as well as agreement among
the transit providers and MTC on the scope and structure of the program. The impact of
potential fare revenue losses on farebox recovery ratios as well as implications of increased
ridership for service levels and operating costs are concerns to the agencies. Consensus on the
merits of the program and agreement on cost sharing strategies will likely be part of the
conversation, particularly with the four transit agencies (AC Transit, BART, SFMTA, VTA) that
account for 90% of the region’s transit trips.
 Compliance: Like the eligibility assessment process, the fare pricing and/or payment structure
should be convenient. It will also likely require a Title VI and Environmental Justice analysis. In
addition, use of Clipper cards will require consistency with Clipper program requirements
concerning confidentiality of users’ personally identifiable information.

December 7, 2016
7
Technical Implementation
The technical implementation could vary greatly depending on which scenario is chosen and the final
program definition. However, general implementation milestones can be laid out regardless of the
program specifics.
Based on CH2M’s experience with similar projects in the Bay Area, program definition activities could
take two to four months. Contracting activities could take four to six months. Start-up of non-technical
services (such as means-testing) could take four to eight months (depending on staffing). And technical
systems implementation could take four to eight months (but could be conducted concurrently with
start-up activities). Overall, technical implementation could take 10 to 18 months.
If technical systems implementation is mostly external to Clipper® (as with A3), then technical
implementation would not depend on current Clipper® priorities and 18 months may be the high
estimate for bringing a program into existence. If technical system implementation is internal to
Clipper® (as with A1), then technical implementation would likely be pushed out significantly (a year or
more) due to pre-existing program implementation priorities.
Key Implementation Milestones:
 Program Specification: An approved technical document detailing workflow processes,
business rules, non-Clipper® system requirements (e.g., external tracking of participants if
required), and Clipper® updates (e.g., required software and business rule changes).
 Means-Testing Function Definition: An approved document outlining the means-testing policy
and eligibility testing program. This is a major undertaking that will benefit from existing means-
based eligibility programs outside of transit, and the current paratransit eligibility testing
expertise within transit, as well as the experience of other regional transit systems’ low income
programs, such as ORCA LIFT.
 Program Staffing: Identify qualified staff either at MTC and/or among participating transit
agencies to develop the project implementation plan and implement the program.
 Project Implementation Plan: An implementation plan including schedule, budget, and staff
resources required.
 Means-Testing Contracting: If means-testing is contracted to a third party, then the program
sponsor would either need to manage a formal bid process to select a vendor, or develop
contractual relationships with multiple means-testing partners, such as social service agencies.
Since this is a regional programs, there is also the question of which agency should hold and
manage such contracts.
 Clipper Vendor Proposal and Negotiation: The Clipper® vendor (Cubic) would provide a
proposed approach, cost, and schedule for implementation of the specification.

December 7, 2016
8
 Technical Implementation: The project implementation team collaborates with the Clipper®
vendor (Cubic) to implement the system changes.
 Means-Testing Implementation: The project implementation team would collaborate with the
means-testing vendor (TBD) to stand up a means-testing program: develop informational
materials, hire and train staff (TBD), acquire or expand facilities, set up technical systems
(application database, reporting systems, etc.), create an appeals process, outreach to social
service agencies, and other related tasks.
 Technical Testing: Clipper® changes are lab tested to assure that the features are implemented
according to the business rules, then user tested in the field to ensure the features are rolled
out correctly to the entire system.
 Friendly User Testing: The system goes live with a very small set of “friendly users” who are
selected for their ability to test the full breadth of services (including means-testing), features,
and locations. These users have direct and immediate contact to the implementation team so
that problems can be addressed rapidly and fixes put in place before launch.
 Soft Launch: The program goes live to the public, but targets only a subset of users to slowly
build the user base. Ensure that human systems scale and tracking and reporting systems are in
place.
 Hard Launch: Actively promote the program to all qualified participants. Monitor program
through established tracking and reporting systems.
Pilot Program
Program scenarios A1 and A3 could be further defined and explored through one or more pilot
programs to test feasibility. The purpose of a pilot program would be to answer the following key
questions:
 What is the actual rider demand for a low income program – what percentage of qualified riders
will actually sign up for the program?
 How fast will qualified riders sign up and can (should) adoption rates be managed through
outreach efforts and/or eligibility restrictions?
 Does the program result in rider behavior changes – do people ride more if the fare is reduced?
 What will be the actual costs (lost revenues and operating costs) at full-scale implementation?
Despite the demographics and fare modeling work conducted as part of this study, a pilot test remains
the best way to provide a better understanding of the likely revenue loss and behavior change that
would come with a low income program. (Cost projections provided in Technical Memorandum #3 were
“maximum costs” that assumes 100% program adoption – an adoption rate that peer programs have not
achieved. Actual program costs are likely to be lower.) Given the limited examples of low income

December 7, 2016
9
programs around the country and the unique context for launching a Bay Area program, it is difficult to
accurately project the scale and pace of program adoption without a pilot.
A successful pilot test will inform these key questions quickly and cost-effectively. Other possible
objectives for the pilot, such as testing the logistics of means-testing or the technical workings of a
particular scenario, are secondary.
Pilot Program Option #1
One concept for a quick and cost-effective pilot would be to temporarily issue RTC Discount Clipper®
Cards to individuals who have already qualified for one or more means-tested programs, such as
CalFresh. The RTC Clipper card is a version of Clipper created for passengers under 65 with qualifying
disabilities and provides discounted fares to eligible riders. This pilot would be most similar to a test of
A1, Discounted Fares and Passes, where the existing Clipper RTC fare category serves in lieu of
implementing a new fare discount category for eligible low-income riders, which the A1 analysis
indicated would be costly and time-intensive to implement broadly under existing Clipper technology.
 Pilot means-testing is already defined and implemented; one discount card would be issued for
each CalFresh card. No new means-testing program needs to be created for this pilot, but a
mechanism for utilizing existing means-testing processes in partnership with social service
providers would need to be identified and supported.
 Pilot discounts are already defined and implemented; transit agencies would agree to honor
existing RTC fares for qualified low-income riders. Current RTC discounts vary by agency and do
not align precisely with the 50% discount analyzed in scenario A1, but they are close. If current
RTC discounts can be used as an interim proxy, then no new discounts need to be programmed
into Clipper®.
 RTC cards already make use of a photo ID to reduce fraud.
 A unique series of Clipper serial numbers could be created to separate monitoring of the means-
based program separately from the established RTC program.
The pilot program could be created quickly by issuing the policy directive to allow CalFresh cardholders
to qualify for a special RTC discount card. The pilot would track the uptake and usage of such cards for
the duration of the pilot, after which the pilot cards would be disabled. RTC card issuance centers would
need to be prepared for a surge in applications, but no other technical preparation would be required.
Program enrollment could be restricted or expanded depending on the number of means-based
programs (in addition to CalFresh) accepted as verification of low income status under the pilot
program.
Extending the RTC discount program to low income riders would provide a relatively straightforward
way to test demand, uptake, and behavior change. However, because this pilot would rely on other
programs to define eligibility, it would not help establish the precise policy boundaries of a transit-

December 7, 2016
10
specific means-testing program. And because the pilot would rely on existing RTC discounts, it would not
allow for the development of low income-specific discounts for each agency.
Pilot Program Option #2
A second pilot concept would test scenario A3, Cash on Clipper, using a well-defined sub-target
population. For example, local clients of existing social service programs could be offered the benefits of
the pilot program. Those willing to participate could be given pilot Clipper® accounts. Using current
Clipper® functionality, monthly cash subsidies could be added electronically to those pilot accounts.
This approach would effectively implement the A3 program for the limited number of individuals
selected for the pilot program. It provides a contained and straightforward way to test and document
demand, uptake, and behavior change. Like Option #1, it would not help establish the precise policy
boundaries of a transit-specific means-testing program. However, the pilot could answer the key
questions set out at the beginning of the pilot.
Pilot Program Implementation
Regardless of which of these pilot programs is pursued, next steps to initiate a pilot include:
 Confirm Pilot Study Objectives: Confirm all pilot objectives. Recommended objectives include
developing a predictive adoption rate, refine estimated costs based on adoption, observe
behavior changes (especially increases in ridership), identify barriers to participation.
 Define Specific Study Methodology: Clear program objectives will help determine which of the
two pilot program options to flesh out to create a complete study methodology including data
collection and analysis. To develop a predictive program adoption rate on which to base future
costs, careful attention must be paid to the pilot study population and pre-pilot and post-pilot
data gathering.
 Establish Simple Pilot Participation Criteria: The initial pilot should rely on existing means-
testing programs, rather than develop new means-testing infrastructure from scratch
specifically for a pilot.
 Define Partnerships with Social Service Organizations: Social service organizations have already
been involved in this study and will be important partners in identifying and potentially
qualifying participants for the program. They will also be important to the outreach and
communication required for program success.
 Define Technical Program Parameters: Social service partner organization should be active
participants in defining how the program is administered and data gathered on participants.
 Solicit Participants: Develop the outreach and enrollment materials in conjunction with the
frontline staff at social service organizations.

December 7, 2016
11
 Manage the Technical Program: Program management will include enrollment, creation of pilot
accounts, clearance and consent for access to those accounts, planned data collection and
management for both user and activity data.
 Analyze and Report on Participation Rates and Behavior Changes: In accordance with the pilot
program objectives and the data methodology established earlier in the project. This analysis
will provide new inputs to predict costs at full implementation.
 Determine potential long-term funding sources for an ongoing subsidy beyond the pilot
program phase.

December 7, 2016
12
Appendix A: Evaluation of Objectives
 Weighting totals 100% with different weight assigned to objectives related to Rider Affordability (40%,
Administrative Feasibility & Financial Viability (40%), and Regional Consistency (20%).
 Scoring Scale is from 1-5 with 1 being the lowest and worst score, and 5 being the highest and best score.
Weight A1 A2 A3
Provides a discount to low income individuals 12 4 4 4
Enrollment and participation is easy 10 4 3 4
Program eligibility and means testing is based on eligibility
for another social program (e.g., CalFresh)
10 4 4 4
Provides the same discount to all eligible individuals,
regardless of frequency of travel
8 5 0 3
Readily scalable to available program funding 8 1 3 5
Reasonable agency resources and costs 8 1 2 5
Program can be managed centrally and electronically 3 1 3 5
Impact on agency-specific farebox recovery ratios is <1% 5 0 0 0
Minimizes agency overhead by providing Clipper-only
payment (no cash option)
3 0 5 5
Can be implemented within three years 5 3 0 5
Can be implemented under the current Clipper system 5 2 0 5
Can be implemented using existing fare products 3 2 0 5
Builds regional consistency through program eligibility
requirements, and use of Clipper
10 4 4 4
Does not depend upon implementation of regional fare
policy or products (but does not preclude it either)
10 4 2 5
100
Weighted Average Score 3.0 2.4 4.2
RIDERAFFORDABILITYADMINISTRATIVEFEASIBILITY&FINANCIALVIABILITY
REGIONAL
CONSISTENCY
Supports regional fare coordination, policy, or
products

Item 5
Draft
Regional Means-Based
Transit Fare Pricing Study
Project Overview Final Report
Prepared for
375 Beale Street
San Francisco, California 94105
December 7, 2016

Project Overview Final Report – DRAFT
1 DECEMBER 7, 2016
Table of Contents
Introduction ................................................................................................................................................. 2
Study Methodology and Stakeholder Involvement...................................................................................... 2
Existing Policies and Conditions.................................................................................................................... 4
Developing Low-Income Fare Affordability Scenarios.................................................................................. 5
Proposed Fare Affordability Scenarios............................................................................................. 6
1. The Big Idea..................................................................................................................... 6
2. Discounted low Income fares and/or pass program....................................................... 6
3. Discounted off-peak fares............................................................................................... 6
4. Regional interagency pass .............................................................................................. 6
5. Make transfers more affordable..................................................................................... 7
6. Monthly fare or trip accumulators ................................................................................. 7
7. Add cash to Clipper Card for low income riders ............................................................. 7
8. Increase use of existing discounts/reduce barriers to existing discounts ...................... 7
Proposed Revenue Generating Scenarios........................................................................................ 7
A. Eliminate non-mandated cash discounts/eliminate proxies for low income................ 7
B. Eliminate discounted fare products (e.g., monthly passes) .......................................... 8
C. Implement fare increases for non-low income riders ................................................... 8
Quantitative and Qualitative Evaluation....................................................................................................... 8
Affordability Scenarios..................................................................................................................... 8
Revenue Generating Scenarios........................................................................................................ 8
Evaluation Results............................................................................................................................ 8
A1 – Discounted Fares and Passes for Low Income Riders................................................. 9
A2 – Accumulator with Monthly Cap for Low Income Riders........................................... 10
A3 – Cash on Clipper® for Low Income Riders.................................................................. 11
R1 – Eliminate Non-Mandated Cash Discounts ................................................................ 13
R2 – Implement Fare Increases......................................................................................... 14
Means Testing............................................................................................................................................. 15
Alternatives Evaluation, Recommended Actions........................................................................................ 16
Next Steps................................................................................................................................................... 17
Technical Implementation............................................................................................................. 17
Pilot Program ................................................................................................................................. 17
Appendix A: notes......................................................................................................................................A-1
Appendix B: Quantitative Analysis Results ...............................................................................................A-2
Appendix C: Impacts on Farebox Recovery ............................................................................................A-13

2 DECEMBER 7, 2016
Introduction
The goal of the Regional Means-Based Transit Fare Pricing Study is to answer three interrelated
questions:
 Is there a way to make transit more affordable for the Bay Area’s low income residents?
 How can the region best move towards a more consistent regional standard for fare discount
policies?
 Is there a transit affordability solution that is financially viable and administratively feasible,
and does not adversely affect the transit system’s service levels and performance?
In pursuit of these goals, this study has developed a range of scenarios for implementing a regional
means-based transit fare program in the nine-county Bay Area. This study considered the feasibility of
implementing and funding these scenarios.
MTC has been involved in identifying affordability barriers to transit and promoting solutions through
regional policy initiatives for more than ten years. These include the Coordinated Public Transit-Human
Services Transportation Plan, the Lifeline Transportation Program, and the 2012 means-based fare
discount funding requests, the Regional Transportation Plan, the Transit Sustainability Project, and the
Community Based Transportation Planning Program. Although MTC does not determine specific fare
policies for individual transit operators, MTC does have statutory authority to promote regional transit
coordination.
StudyMethodologyandStakeholderInvolvement
MTC Staff established the study goals as part of the RFP process initiated in the second half of 2014. In
March 2015, the CH2M team was retained as lead technical consultant to conduct research, provide
quantitative and qualitative analysis, support community outreach, and document findings in
accordance with the defined scope and work plan.
The questions posed in the study goals have been answered in a series of four technical memorandums,
each with a distinct focus:
 Technical Memorandum #1: Existing Policies and Conditions
 Technical Memorandum #2: Alternative Fare Scenarios
 Technical Memorandum #3: Evaluation of Alternative Fare Scenarios
 Technical Memorandum #4: Preferred Alternative Fare Scenarios
A Technical Advisory Committee (TAC) was established early in the study to provide initial input and
subsequent feedback on each of the technical memorandums. The TAC consists of a broad-based group
of stakeholders including representatives from the Alameda-Contra Costa Transit District (AC Transit),
the Alameda County Social Services Agency Workforce and Benefits Administration, Bay Area Rapid
Transit District (BART), the Contra Costa County Employment and Human Services Department, Marin
Transit, Petaluma Transit, San Francisco Municipal Transportation Agency, San Jose State University’s
Mineta Transportation Institute, Urban Habitat, and the Santa Clara Valley Transportation Authority
(VTA).
The TAC met four times over the course of the study, between May 2015 and December 2016, to review
each of the four technical memoranda and also provided assistance with data collection.

3 DECEMBER 7, 2016
Early in the study, meetings and telephone interviews were also conducted with representatives of
health and human service agencies serving Bay Area low income communities, as part of the process for
understanding current needs and structuring low income program alternatives. Later, two community
focus groups were assembled as part of the Evaluation of Alternative Fare Scenarios – one in San Jose
and one in Vallejo. Low income riders were asked to articulate their needs for discount transit fare
products, and their opinions regarding the products and policies being considered.
Research on peer low income programs was conducted early in the study and the results are
summarized in Technical Memorandum #1, Policies and Conditions.
The ridership and revenue impacts of each affordability and revenue-generating scenario were
evaluated using FARES, CH2M’s fare analysis model, as described in Technical Memorandum #3,
Evaluation of Alternative Means-Based Transit Fare Scenarios. Key assumptions and data sources used
in evaluating ridership and revenue impacts include:
 Ridership and fare revenue impacts were analyzed by market segment (i.e., rider groups
characterized by rider category (adult, senior/disabled, youth, etc.) and income (e.g., low
income adult, non-low income senior) for AC Transit, BART, Caltrain, Golden Gate, SFMTA,
SamTrans, and VTA and Marin Transit1. For the remaining 16 agencies, ridership and fare
revenue impacts were estimated only for “low income” and “non-low income” rider groups and
not distinguished by rider category).
On-board survey results provided by MTC were used to estimate the percentage of low income
riders by transit operator. In the absence of household size data, a household income of
$35,000 (which approximates 200% of the Federal Poverty Level (FPL) for an average Bay Area
household size, which is between two and three persons) was generally used as the eligibility
threshold.
 The FARES model uses elasticities to estimate the impact of a fare change on ridership. For
example, if a fare elasticity is assumed to be -0.33, a 10% increase in fare price will result in a
3.3% decrease in ridership and vice versa – a 10% decrease in price will result in a 3.3% increase
in ridership. It is generally assumed that lower income riders are more sensitive to price and
therefore their price elasticities are higher, while higher income riders tend to be less sensitive
to price and exhibit lower price elasticities.
 The CH2M FARES model was used to calculate maximum program adoption and resulting
program cost (revenue loss). Using local survey data and statistics on qualified riders, the study
has established an upper limit on potential cost. Although it is reasonable to assume that not
every qualified rider will take advantage of a low income fare program (and that actual costs
would be lower than the maximum) there is no basis to estimate how much below the
maximum costs might be.
1 In the past, Golden Gate Transit provided much of Marin Transit’s service and performance data reported by MTC combined the two
agencies. As a result, Marin Transit was included with Golden Gate among the transit providers that were analyzed at the market segment
level.

4 DECEMBER 7, 2016
ExistingPoliciesandConditions
Technical Memorandum #1: Existing Policies and Conditions provides the results of the first phase of the
study, an existing conditions analysis that included:
 Discussions with Bay Area social service agencies
 Review of existing means-based fare discounts offered by Bay Area transit providers
 Research into other means-based pricing and transit affordability programs in the Bay Area and
North America.
Technical Memorandum #1 includes a description of the current conditions and policies in the Bay Area
that have implications for low income residents as well as means-based programs that have been
undertaken in other regions and by other sectors. It also includes a statement of the project goals and
the results of discussions of project objectives with study stakeholders and potential performance
measures for use in assessing how well proposed policy changes meet study goals and objectives.
The key findings of this Policies and Conditions background review served as the foundation for crafting
preliminary means-based transit fare scenarios for the Bay Area in the next task of this study. High-level
findings include:
 The region’s four largest transit agencies (SFMTA, AC Transit, BART, and VTA) account for 90%
of the region’s transit trips.
 Transportation is the third-largest budget item for low income households in California’s
metropolitan areas. For low income households, only housing and food expenditures constitute
larger budget shares than transportation expenditures.
 A majority of transit riders are low income. Approximately half of Bay Area transit riders are
very low income (household income under $25,000) and three-quarters are low income
(household income under $50,000). While three-quarters of disabled passengers are very low
income, only about half of seniors are.
 Among Bay Area transit riders, the lowest income riders make shorter trips than higher
income riders, traveling less than one-third the distance of the highest income riders. Low
income riders generally use local bus systems at higher rates while upper-income riders use the
region’s long-distance transit modes at higher rates.
 Low income transit discount programs have evolved over time. The broad variety of the
programs that have been developed reflect the diversity of needs that transit operators have
chosen to address. Transit agencies generally offer two categories of low income transit
discount programs: bulk ticket sales programs and other low income programs. The programs
are targeted at different populations. Bulk sales are generally not intended to address on-going
needs, but rather are designed to meet immediate needs. Other low income programs (e.g.,
Free Muni, ORCA LIFT) are intended to meet longer-term on-going needs.
 Health and social service organizations can be key partners in low income transit discount
programs. In the Bay Area, these organizations are key partners in both SFMTA’s Lifeline and
VTA’s UPLIFT and TAP programs. School districts are also partners with transit operators in low
income discount programs targeting Bay Area students (SFMTA, Marin Transit, and SolTrans). In

5 DECEMBER 7, 2016
addition, using social service agencies provides potential opportunities to help enroll
participants into other programs, such as Medi-Cal and CalFresh. Opportunities also exist to
streamline means testing by linking eligibility to existing programs, such as Medi-Cal or CARE
programs.
MTC presented these findings to the Technical Advisory Committee (TAC) on May 28, 2015. In
response to the findings in the memorandum, the TAC wanted to ensure that the study would also:
 Create a fare pricing and/or payment structure that is convenient and compliant with applicable
regulations, including Title VI.
 Establish clear and consistent definitions of “low income” and “resident.”
 Support transit operator farebox recovery and financial objectives to ensure the program can be
successful and sustainable – and if needed, identify funding source(s) to offset revenue and cost
impacts.
 Build consensus for a shared regional approach across Bay Area transit operators, social service
agencies, community organizations, and external stakeholders.
 Ensure program scenarios are appropriate for the region’s four largest transit agencies (SFMTA,
AC Transit, BART, and VTA) that account for 90% of the region’s transit trips.
 Support low income individuals who make up the majority of Bay Area transit riders and whose
households rank transportation as their third largest expense, behind housing and food2.
 Establish a well administered means-based testing program to verify eligibility for low income
programs, if required.
 Review existing discount programs to see how they currently support low income riders,
whether their policy objectives are being met, or if those programs could be adjusted to better
serve low income riders.
 Consider how to partner with Bay Area health and human services agencies.
DevelopingLow-IncomeFareAffordabilityScenarios
Technical Memorandum #1, Policies and Conditions, established the existing conditions and
demographics of low income transit riders. Informed by that memo and feedback from the TAC, the
CH2M study team with MTC staff developed a wide-ranging set of draft low-income fare affordability
scenarios for consideration by the TAC. Those draft scenarios were documented in Technical
Memorandum #2, Alternative Fare Scenarios.
Eight different fare affordability scenarios were proposed, based on the overall program objectives,
national peer examples, local expertise in Bay Area transit fare policy, and findings of the previous task.
Developing and reviewing these draft scenarios exposed three key requirements for a successful low
income program:
 A clear and consistent definition of “low income” and “resident,”
2 As discussed in Regional Means-Based Transit Fare Pricing Study Technical Memorandum #1: Policies and Conditions, Section 1.1.2 Literature
Review.

6 DECEMBER 7, 2016
 A fair means-based testing program to verify eligibility for low income programs
 Pricing and payment that is convenient and compliant with applicable regulations (e.g., Title VI).
The second technical memo explores these challenges and considers the following building blocks for
the alternative fare scenarios proposed:
 Discount Structure: What discount and/or other policy tool will be implemented?
 Geographic Scope: Which operators will participate? Will it be an opt-in program? Will there be
a limited demonstration project? Will there be regional consistency in discounts offered?
 Target Population & Income Threshold: Who is the target market? What income threshold will
be used to determine eligibility?
 Means-Testing: Who will conduct the means-testing if eligibility assessments are required?
 Distribution: How will the benefits or discounts be distributed?
 Fare Media: What media will be used to distribute the discounts (e.g., Clipper, paper)?
ProposedFareAffordabilityScenarios
Seven scenarios were defined for making transit fares more affordable for low income riders in the Bay
Area. An eighth scenario combined several of the affordability scenarios into a multi-pronged, high-
impact “Big Idea” scenario.
1.TheBigIdea
Combining several different approaches (of those described below in scenarios 2-8) into one “Big Idea”
could result in a multi-pronged, high-impact scenario. One example of how several different approaches
might be combined include:
 Discounted low Income fares and/or pass program (see scenario #2)
 Peak/off-peak pricing (see scenario #3)
 Fare accumulators (see scenario #6)
 Eliminate non-mandated cash discounts (see Revenue Generating opportunity ‘A’)
2.DiscountedlowIncomefaresand/orpassprogram
Offering low income riders a region-wide discount (potentially 50%) on all fares and passes, whether
paid by cash or Clipper®.
3.Discountedoff-peakfares
Offering all riders, regardless of income, a fare discount during off-peak hours. Two-thirds of low income
riders travel during the off-peak while only half of higher income riders travel during the off-peak. This
option minimizes program administration by offering discounts to all riders and eliminating the need for
means-testing.
4.Regionalinteragencypass
Similar to the BART/Muni Adult “A” Fast Pass, this scenario would establish a regional pass that would
allow unlimited rides on multiple operators within a defined geographic area. An interagency pass
provides the flexibility for riders to use multiple operators, facilitating interagency transfers while
minimizing the cost to transfer. Based on rider survey data, low income riders are more likely to transfer

7 DECEMBER 7, 2016
to reach their final destinations. However, introducing a pass to facilitate interagency travel will not
necessarily address the high upfront cost that may not be affordable for low income riders.
5.Maketransfersmoreaffordable
Offering free, discounted, or time-extended interagency transfers would increase affordability of trips
that require use of multiple operators in the absence of an interagency or regional pass. While offering a
small discount on interagency transfers (e.g., $0.50) does improve affordability, the fare for the entire
trip may still create a financial burden to low income riders. Offering a day pass in lieu of intra-agency
transfers would further increase affordability, especially on transit systems designed to require
transferring to complete a trip.
6.Monthlyfareortripaccumulators
Also referred to as fare capping, best fares, or fair fares, this scenario establishes a mechanism that
allows low income riders to pay individual fares for each boarding up to a “cap,” at which time the rider
automatically earns a monthly pass so that future rides during that month are free.
7.AddcashtoClipperCardforlowincomeriders
This scenario would provide a cash value, transit-only subsidy to low income riders who qualify. Transit
agencies would not be required to make changes to their established fares.
8.Increaseuseofexistingdiscounts/reducebarrierstoexistingdiscounts
Several transit operators offer discounted fares and/or passes (e.g., youth passes, senior/disabled
passes, monthly passes) that are sometimes underutilized due to a variety of barriers. This scenario
would identify those barriers and implement strategies to mitigate them.
ProposedRevenueGeneratingScenarios
The fare policy scenarios outlined above are all intended to reduce fares paid by low income riders.
Therefore, they are expected to reduce overall fare revenue for the transit agencies. While scenarios
selected for further evaluation are not required to be revenue neutral, each scenario should be
consistent with the study goal to be “administratively viable and financially feasible, and not adversely
affect the transit system’s service levels and performance.” Therefore, complementary revenue
generation strategies were developed to consider how lost revenue might be replaced.
In developing the revenue generating scenarios, the study team tried to identify new, non-traditional
revenue opportunities that might only make sense only once the region is committed to fully
implementing a low income fare program.
A. Eliminatenon-mandatedcashdiscounts/eliminateproxiesforlowincome
The Federal Transit Administration requires its grantees to provide half fare discounts for seniors,
persons with disabilities, and Medicare cardholders on one-way fares during off-peak periods.
Eliminating the discounts that transit agencies choose to offer that exceed these requirements could
generate additional revenue. However, a low income program that ensured all low income riders,
regardless of rider category, had access to discounts might eliminate the need for these non-mandated
discounts.

8 DECEMBER 7, 2016
B. Eliminatediscountedfareproducts(e.g.,monthlypasses)
Additional revenue could be generated by eliminating fare products, such as monthly passes, that
provide discounts to all riders, regardless of financial need. Transit operators have traditionally offered
passes to provide discounts to their most frequent and loyal riders, and to simplify fare payment and
fare collection. However, with Clipper, passes are no longer needed to simplify fare collection and
eliminating these discounts could generate additional fare revenue.
C. Implementfareincreasesfornon-lowincomeriders
Additional revenue could be generated by implementing fare increases. Revenue increases from non-
low income riders can help offset revenue losses from offering a low income program.
QuantitativeandQualitativeEvaluation
The TAC met with MTC staff and the CH2M study team on August 3, 2015 to review and provide
feedback on the alternative fare and revenue scenarios. That feedback was considered in staff’s
decision to narrow and refine the alternatives, which were reviewed by MTC’s Programming and
Allocations Committee in December 2015. From the preliminary fare alternative and fee generating
scenarios outlined in Technical Memorandum #2, three fare affordability scenarios and two revenue
generating scenarios were selected for further definition and analysis.
AffordabilityScenarios
 A1 – Discounted Fares and Passes for Low Income Riders
 A2 – Accumulator with Monthly Cap for Low Income Riders
 A3 – Cash on Clipper® for Low Income Riders
RevenueGeneratingScenarios
 R1 – Eliminate Non-Mandated Cash Discounts
 R2 – Implement Fare Increases
EvaluationResults
Each of the five scenarios is described here in greater detail, including program-specific parameters as
well as the results of qualitative and quantitative evaluations, which were provided in Technical
Memorandum #3, Quantitative and Qualitative Evaluation.
Agency-specific and region-wide ridership and fare revenue impacts were developed for each scenario.
Region-wide impacts are summarized below, under each scenario description. Agency-specific ridership
and fare revenue forecasts assume full implementation and utilization of each low income program in
Year 1 – in effect, defining the maximum potential impacts and exposure. In actually implementing low
income programs, other agencies have found that uptake is more gradual and their experiences as well
the results of any pilot program could help scale a Bay Area program.
Despite efforts earlier in the study to avoid means-testing, all scenarios include means testing to verify
income and that is a critical aspect of implementing and managing a low income program, even though
it may limit the reach of the program and would not benefit those that do not meet the criteria. As
noted in Next Steps, it may be possible to reduce the complexities of means testing by accepting
individuals who are already qualified for one of more means-tested programs, such as CalFresh.

9 DECEMBER 7, 2016
A1–DiscountedFaresandPassesforLowIncomeRiders
Most transit operators currently offer discounted cash fares or pass products to seniors, persons with
disabilities, and youth. This scenario would create an additional discount category for low income
persons, which would allow individuals below a certain income threshold to pay fares or purchase
passes at a discount.
Parameters
 50% discount on all agency-specific cash fares and Clipper® stored value fares.
Advantages
 Offering specialized low income fares and passes and requiring eligibility assessments, similar to
the Seattle ORCA LIFT program, provides a way to offer discounted fares to a specific target
population without requiring discounted fares for those who do not qualify.
 Clipper® cards would be issued as IDs to individuals who qualify for means-based price
discounts. The cards could be used only as proof or eligibility or for both identification and fare
payment.
 Can be implemented by all Bay Area operators, regardless of fare structure, including those that
do not offer pass products and those that are not yet on the Clipper® system.
 Extending the discount to cash and stored value fares as well as to monthly passes makes the
discount affordable to as many riders as possible. Offering only a discounted pass (and not a
trip-based cash or stored value discount) would not address the high up-front cost that may
make monthly passes unaffordable for low income riders.
Disadvantages
 Riders who wish to use a Clipper® card to store value or discounted passes would need to be
able to load value or products onto their cards in advance of use.
 It may be necessary to issue the Clipper® card with a photo if it is used to allow riders to obtain
discounts on cash fares. While some programs, including Seattle’s ORCA LIFT, have avoided
using distinguishing IDs (such as photo IDs or differently colored cards), other agencies do not
have that concern and do require photos (e.g., Tucson’s SunGo ID & Card).
 Bay Area transit operators have different base fares, pass multiples, and transfer policies.
Implementation on a regional basis will require handling multiple price points, different service
types/distances traveled (e.g., local bus vs. regional rail), and other different fare policies,
making it difficult to implement across operators.
Quantitative Analysis
Region-wide impacts were estimated as follows:
A1 (Cash/Pass Discounts) Annual Ridership Impact
(millions)
Annual Fare Revenue Impact
(millions)
Low Income Riders 24.7 -$79.6
Non-Low Income Riders 0.0 $0.0
Total 24.7 -$79.6
Note: Ridership and fare revenue forecasts assume unconstrained, full implementation and utilization in
Year 1.

10 DECEMBER 7, 2016
Qualitative Analysis
 Transit would become more affordable for the Bay Area’s low income residents. Based on these
eligibility thresholds, this alternative is estimated to increase transit trips among low income
riders by 24.7 million (4.7%) to 544.4 million annually, if fully implemented and utilized.
 This approach would achieve a more consistent regional standard of 50% discount on fares in
the Bay Area, if it were adopted by all operators.
 The financial viability of this alternative will depend on the ability to cover fare revenue losses of
up to $79.6 million plus implementation costs.
A2–AccumulatorwithMonthlyCapforLowIncomeRiders
Accumulators are alternatives to pass products that cap fares or provide bonus trips based on a
threshold (number of boardings or value of fares paid) within a defined period of time. Accumulators
with monthly caps would allow riders to purchase pass products (e.g., monthly passes) in small
increments rather than paying the full price of the pass up-front. For example, if the fare is $2.50 and
the monthly pass price is $100, $2.50 would be deducted from the rider’s Clipper® card on each
boarding until the $100 "cap" is reached (with the 40th boarding). After that, all trips would be free for
the rest of the month. In this scenario, fares would be capped on a monthly basis, and the cap would be
set lower for low income riders than for the general population.
Parameters
 50% discount on fare caps for low income riders on agency-specific fare accumulators.
 Separate fare caps for low income riders and all other riders.
 Accumulators are agency-specific; inter-agency transfer and monthly pass agreements are not
included.
Advantages
 Clipper® business rules would afford low income riders the best fare possible. Frequent riders
have the ability to obtain unlimited travel advantages of a monthly pass even if they are unable
to afford the upfront cost of a monthly pass.
 Even riders who do not qualify as low income riders may find an accumulator program beneficial
because they are able to spread out the cost of a monthly pass over the course of many
boardings.
 While infrequent riders may not travel enough to reach the monthly cap, they also would not
need to purchase a monthly product in advance and risk underutilizing it.
Disadvantages
 Fare capping primarily benefits those riders who travel frequently enough to reach the cap.
Alternatively, instead of capping low income fares at half the cap for general public users, the
per-trip fare could also be discounted by 50%.
 Fare capping would require a Clipper® card to pay fares using stored value, track fares paid
toward the cap, and provide free trips once the cap is reached. Fare capping could not be
provided to riders paying cash fares. Focus group participants observed that it would be a
burden to access the discounts if they were limited to Clipper®.

11 DECEMBER 7, 2016
 With accumulators and fare capping, agencies may lose revenue associated with riders who
previously purchased monthly passes but underused them.
 Implementation of a monthly fare cap is not possible with the current generation of Clipper®
due to memory limitations with the current Clipper® card. This scenario therefore is not viable
until the roll-out of the next generation Clipper® system that is anticipated to start in 2019 at
the earliest.
 The Bay Area transit agencies have different base fares, pass multiples, and transfer policies.
Implementation of accumulators throughout the region will require handling multiple price
points, different service types/distances traveled (e.g., local bus vs. regional rail), and other
different fare policies, making it difficult to implement a single regional accumulator across all
operators.
 Agencies that do not currently offer pass products may not wish to develop a low income pass
product.
A2 (Fare Capping) Annual Ridership Impact
(millions)
(millions)
Total 23.3 -$64.2
Year 1.
riders by 23.3 million to 252.1 million annually, if fully implemented and utilized.
 This approach would achieve the goal of a more consistent regional standard for discounting
fares in the Bay Area, if it was adopted by all operators. It would provide a consistent 50%
discount on the price of a monthly pass to all eligible riders paying fares from Clipper® stored
value, as well as the advantages of fare capping, which would provide the benefit of a monthly
pass to riders who currently may be unable to afford one.
 The financial viability of this alternative will depend on the ability to cover fare revenue losses of
up to $64.2 million plus development and implementation costs.
A3–CashonClipper®forLowIncomeRiders
The Cash on Clipper® scenario would provide a transit-only “cash” subsidy to eligible low income riders
by adding funds to the stored value on a Clipper® card, to match funds added by the rider, effectively
providing a 50% fare discount on fares paid with stored value. The subsidy could take the form of a
stored value credit to eligible riders’ Clipper® cards, similar to a pre-tax transit benefit. Other methods
of value distribution besides Clipper®, such as paper-based commuter checks or benefits cards, could be
developed but are not recommended.

12 DECEMBER 7, 2016
Parameters
The scenario evaluated here assumes that stored value added by eligible riders would be matched
dollar-for-dollar, with no cap on the bonus that could be added, effectively providing a 50% discount on
pay-per-trip stored value usage. Under this scenario, subsidies would be provided by MTC from a
regional pool of funds, not by individual transit agencies.
Advantages
 Riders are able to spend their Cash on Clipper® transit dollars on any/all transit agencies,
thereby providing access to the entire regional transit system.
 This option accommodates established transit fares and fare structures. It requires no changes
to transit agencies’ established fares and therefore may be more feasible to implement.
 Transit agencies could gain fare revenue from additional trips induced by the program
(discounted fares would be paid by riders and matched by the regional funding pool).
 Implementation on Clipper® speeds the distribution of value, minimizes the transferability of
value, and reduces the potential for fraud, but enables and requires tracking and monitoring to
minimize fraudulent use.
Disadvantages
 There is a potential for fraud associated with the use of alternative methods of transit value
distribution, such as more readily transferrable paper-based commuter checks or benefits cards,
if the program is made available outside of Clipper®.
A3 (Cash on Clipper®) Annual Ridership Impact
(millions)
(millions)
Total 26.1 -$75.5
Year 1.
For each operator, it is assumed that 70% of low income riders not currently using Clipper® would
migrate to Clipper® to take advantage of the Cash on Clipper® program.
riders by 26.1 million to 254.9 million annually, if fully implemented and utilized.
 Although Cash on Clipper® is designed to provide a consistent 50% discount to all eligible riders
paying fare using Clipper® stored value, this approach would neither provide regional fare policy
coordination nor simplify riders’ fare payment experiences.
 The financial viability of the Cash on Clipper® alternative will depend on the ability to cover
revenue fare losses of up to $75.5 million plus implementation costs

13 DECEMBER 7, 2016
R1–EliminateNon-MandatedCashDiscounts
This scenario would generate revenue to help fund a low income transit fare program by eliminating all
fare discounts beyond those that comply with Federal requirements. Federal regulations require transit
systems that that use FTA formula funds, which includes virtually all Bay Area transit operators, to
provide half-fare discounts to seniors (at a minimum, those riders who are age 65 and older), persons
with disabilities, and Medicare recipients, but only during off-peak hours and on cash fares. There are
currently no federal requirements for fare discounts for youth or low income persons.
Under this scenario, discounts beyond those that are federally mandated would be eliminated.
However, many of those customers would become eligible for the low income program, thereby
directing subsidies to those who need a discount – and collecting full fares from those that are not low-
income.
Parameters
 Federally-mandated half fare discounts available only on cash and Clipper® stored value fares
and only during off-peak.
 Retain free/reduced fixed route fares for ADA paratransit eligible riders.
 No discounted passes for youth, seniors, persons with disabilities, Medicare recipients; other
(full fare) passes and pass programs retained.
Advantages
 Reducing the number and variety of discounts offered provides funding for a low income
program designed to address the needs of those who are most in need of transit fare discounts.
 Eliminating the variety of reduced fare programs simplifies fare policies, makes fare policies
more consistent across the region in keeping with the overall goal of this study, and reduces
administrative costs of managing several different discount fare programs.
 Retaining mandated discounts on fares paid using Clipper® stored value reinforces the use of
Clipper® regionally as well as the use of a specially programmed low income Clipper® card to
support a Bay Area low income program.
 Retaining free/reduced fares on fixed route services for riders who are eligible for ADA
paratransit services encourages the use of lower cost fixed route services.
Disadvantages
 Requires action by each transit agency’s policy board and may be extremely difficult to
accomplish consistently on a regional basis.
 Limiting discounts to off-peak periods would require time-sensitive (peak/off-peak) pricing,
which is currently neither part of the Clipper® functionality nor of many operators’ fare-
collection mechanisms, such as on-board fareboxes.
 May have a negative impact on transit ridership throughout the Bay Area.

14 DECEMBER 7, 2016
R1 (Eliminate Discounts) Annual Ridership Impact
(millions)
(millions)
Low Income Riders -13.0 $30.4
Non-Low Income Riders -7.5 $22.9
Total -20.5 $53.2
Year 1.
 By providing revenue that would help to offset the fare revenue reductions that would occur
with the implementation of a low income transit fare program, this approach would help to
assure that transit would become more affordable and sustainable for low income Bay Area
residents.
 Eliminating these discounts would increase fares for many transit users, thereby reducing transit
use by nearly 21 million trips (approximately 4.1%).
 By eliminating the many agency-specific discounts, this approach would assist in coordinating
and simplifying the fare options offered across Bay Area transit agencies.
R2–ImplementFareIncreases
This scenario would consider the revenue generating effects of raising fares on all fare products
throughout the region by 10%. It would always be paired with one of the Affordability Scenarios so the
net impact would be to decrease fares for low income riders.
Parameters
 Increase all cash and non-cash fares by 10%
 Retain existing discounted fare options and products
Advantages
 Provides funding for a low income program designed to address the needs of those who are
most in need of transit fare discounts.
 Maintains each agency’s existing fare policies and structures.
Disadvantages
 Increases fares by 10% for all riders on all Bay Area transit systems, modes and routes.
 Increasing all fares by 10% will require action by each transit agency’s policy board and may be
difficult to accomplish on a regional basis.
 Increasing all fares by 10% may negatively impact Bay Area transit ridership.

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