TRANSIT FARES IN 2007

Report to/Rapport au:

Transit Committee/Comité des transports

and Council/et au Conseil

28 February 2007/le 28 février 2007

Submitted by/Soumis par: Nancy Schepers, Deputy City Manager/Directrice municipale adjointe

Planning, Transit and the Environment/Urbanisme, Transport en commun et Environnement

Contact/Personne-ressource: A. Mercier, Director / Directeur,Transit Services / Services du transport en commun

842-3636 ext. 2271, alain.mercier@ottawa.ca

SUBJECT:                        TRANSIT FARES IN 2007

OBJET:            TARIFS DES SERVICES DE TRANSPORT EN COMMUN 2007

REPORT RECOMMENDATION

That the Transit Committee recommend Council approve the fare structure in Attachment 1, that represents a two percent increase in average fares.

RECOMMANDATION DU RAPPORT

Que le Comité du transport en commun recommande au Conseil d'approuver la structure tarifaire présentée dans la pièce jointe 1, qui représente en moyenne une augmentation des tarifs de deux pour cent.

BACKGROUND

On February 26, 2007, Council approved the City’s 2007 budget, which included a two percent transit fare increase to be implemented on July 1, 2007.  The draft 2007 budget report contained a detailed breakdown of the increases proposed for individual fare types for a 7.5 percent fare increase.  This level of detailed information was not available for other fare increases, although some approximate numbers were provided in a memorandum to Councillors from the Deputy City Manager, Planning Transit and the Environment of February 19, 2007 to give an indication of what the impact of other fare increases would be on individual customer fares.

This report provides details of the recommended fare structure for the consideration of Committee and Council.

DISCUSSION

With the approval of the two percent fare increase, staff has developed a fare chart to achieve this average fare increase while meeting four objectives:

·        maximizing transit ridership;

·        simplifying the fare structure;

·        minimizing implementation costs; and

·        making a small adjustment to the differential between regular and express passes to better reflect the costs of providing service.

The recommendation (Attachment 1) is to maintain ticket fares at their current levels.  Increases in price tend to have a greater impact on ticket users than pass users and so maintaining them at their current price and increasing passes at around three percent would maximize ridership, while resulting in an overall average fare increase of two percent.

It is also proposed to maintain cash fares at $3.00, which will have little impact on revenues given that only four percent of trips are paid for with cash.  Keeping cash at $3 for regular routes means that the price cards displayed at the bus doorway will remain unchanged.

The percentage increases for express passes are slightly higher than for regular passes in recognition of lower financial performance of express routes.

An alternate fare scenario has been developed (Attachment 2) in which individual tickets are increased to $1.00 and the increases in pass prices are lower.  However, this would result in slightly lower ridership (about 100,000 in 2007) and is not recommended.

CONSULTATION/PUBLIC NOTIFICATION

The 2007 Transit Plan was presented to the Pedestrian and Transit Advisory Committee.  While supportive of the service plan, the committee strongly disapproved of the proposed 7.5 percent fare increase and approved a motion that annual fare increases should not exceed the annual increase in the cost of living (CPI).

TRANSPORTATION MASTER PLAN

Keeping transit fare increases at the level of inflation will avoid ridership losses due to the impact of the elasticity of demand with respect to price.  The ridership target for 2007 is 94.7 million.

FINANCIAL IMPLICATIONS

Overall, the proposed fare structure will result in an increase in the average transit fare of two percent to $1.32 and the fare increase will add $1.3 million to revenues in 2007 and $2.6 million in a full year.

SUPPORTING DOCUMENTATION 

Attachment 1 – Recommended Fare Structure

Attachment 2 – Alternative Fare Structure

DISPOSITION

Following approval by Council of the fare structure for July 1, 2007, staff will order passes and tickets and develop customer information to support the implementation of the new fares.

RECOMMENDED FARE STRUCTURE                                                ATTACHMENT 1

ALTERNATIVE FARE STRUCTURE                                                ATTACHMENT 2