Fare Capping Is the Latest Trend in More Equitable Transit

Setting a maximum fare on a transit ride — regardless of the number of transfers it may include — is emerging as a progressive policy trend among transit agencies, and one being made easier by technology.

Fare capping, as the practice is known, is generally structured around a maximum fare a rider pays over the course of a day or month. In other words, once a rider pays the equivalency of a monthly pass — whether that takes a week or two — the remaining rides that month are free. Or, once multiple transfers on a given trip reach a certain amount, the rest of the day’s trips are free.

“Fare capping is a key strategy to improve the transit riding experience and make it more affordable, particularly for people who might not be able to pay the entire cost of a monthly pass up front,” said Marty Greenstein, assistant deputy secretary for communications at the California State Transportation Agency, which has been helping to lead a contactless fare payment pilot in California, known as the California Integrated Travel Project (Cal-ITP).

Fare capping is seen as not only a key piece of transportation equity but also a way to grow loyalty among riders. And the payment technology — contactless payments, mobile ticketing and other advancements — is making fare capping an easier policy lift for transit organizations.

“Modernization of transit payment infrastructure to account-based, open payment fare collection systems, makes fare capping easier to implement and deliver its benefits to transit users,” said Christian Henry, senior vice president and general manager, North America eastern region at Cubic Transportation Systems. Cubic is enabling OMNY (One Metro New York), the contactless fare payment system deployed across New York City transit.

Henry went on to note the importance of designing systems that serve all riders — not just those with smartphones and bank accounts.

“While technology delivers convenience to those with access, we need to make sure people without are not left behind,” said Henry. “In transportation, the convenience of open payments on phones and wearables is helping New York, but the unbanked or those without devices still need the ability to use cash with dignity and have access to the benefits of fare capping through agency-issued fare media.”

Midsize cities like Cleveland, Ohio, have also adopted contactless payments, with plans to use the technology — this one supplied by Masabi — to explore fare capping, said Katherine Conrad, director of client services at NEORide, a regional council of governments across Ohio, Kentucky and Michigan, including the Greater Cleveland Regional Transit Authority (GCRTA).

“The goal is to expand to get more benefit out of this system,” said Conrad, in an interview with Government Technology in late May.

Back in California, fare capping is spreading quickly. All agencies using “open loop contactless payments” as part of Cal-ITP include fare capping “so riders can pay as they go but never pay more than an unlimited-ride pass would cost,” said Greenstein.

As part of Cal-ITP, tap-to-pay systems — which are also fare-capping systems — have been deployed on the Monterey-Salinas Transit system, Santa Barbara Metropolitan Transit District and Sacramento Regional Transit District (SacRT) light rail.

In the last year, California has entered into master service agreements to lower the costs for transit agencies to acquire the key hardware and software to accept contactless payments, including the ability to offer fare capping, said Greenstein. Cal-ITP offers technical support to all California transit agencies interested in deploying a contactless fare payment system that includes fare capping.

“By removing cost barriers and using incentive pricing and more flexible fares, fare capping encourages more customers to return to public transit systems,” said Henry. “A rider who pays separately for each individual journey will pay no more than someone who pays in advance for a period pass, translating to an enhanced and more consistent customer experience.”

Skip Descant writes about smart cities, the Internet of Things, transportation and other areas. He spent more than 12 years reporting for daily newspapers in Mississippi, Arkansas, Louisiana and California. He lives in downtown Yreka, Calif.