Since CTA Is Raising Fares, It Should Improve Service and Make Payment More Equitable

An Ashland Avenue bus. Photo: John Greenfield
An Ashland Avenue bus. Photo: John Greenfield

[Streetsblog Chicago editor John Greenfield publishes a weekly transportation column in the Chicago Reader. We syndicate the column on Streetsblog after it comes out online.]

Note: This story was filed before last week’s announcement that the CTA will be raising its regular fares by a quarter, starting on January 7.

Since 2009, regular CTA fares have held steady at $2.25 for a train trip and $2 for a bus ride while all other major U.S. transit systems have raised their rates, but it looks like that’s about to change.

The writing was on the wall after November 8, when Leanne Redden, head of the Regional Transportation Authority, wrote CTA president Dorval Carter, arguing that the CTA needs a fare hike to plug its budget gap and avoid major service cuts. Last summer’s Illinois budget deal included a 2 percent sales tax surcharge and a 10 percent reduction in state funding for the three transit agencies, exacerbated by lackluster sales tax growth. This led Pace and Metra to announce this month that they’ll be raising fares in 2018, and the CTA will be losing some $33 million in revenue.

Redden warned that if a balanced CTA budget isn’t approved by February 1, it will trigger mandatory withholding of 25 percent of RTA operations funding, about $360 million a year, leading to a huge reduction in CTA service. “None of us wants to go down that path,” she wrote.

In the wake of the letter, Mayor Rahm Emanuel hasn’t ruled out raising fares as a budget solution. However, he told the Tribune that “everything’s on the table but one thing: There will be no service cuts.”

As of November 17, the CTA was hoping to announce its final 2018 budget Thanksgiving week, according to spokeswoman Irene Ferradaz.

Carter hasn’t said how big a fare hike might be needed, but even a 25-cent increase could tip the scales for some customers, who might turn to other affordable options like Uber Pool, Lyft Line, or Divvy as an alternative. The CTA hasn’t released projections on the potential ridership impactt of a fare hike (“It’s too early to deal with hypotheticals until the budget is released,” Ferradaz said.”), but if the numbers drop significantly revenues will take a hit.

Moreover, an extra quarter per ride adds up to about $120 a year for daily round-trip commuters, a nontrivial expense for working-class Chicagoans and a real hardship for some impoverished residents.

Therefore, transit advocates say that if raising fares is inevitable, the CTA should, first, take steps to improve service, to help prevent ridership bleeding, and, second, adopt a more equitable payment policy to soften the blow for lower-income folks.

“State legislators should never have let things get to this point,” says the Active Transportation Alliance’s governmental relations director Kyle Whitehead. “Transit cuts . . . are unacceptable given the proven economic, environmental, and public health benefits of public transit.”

Things may not be completely hopeless, however. Earlier this month Active Trans released a report, “Speeding Up Chicago Buses,” with proposals to boost CTA bus ridership, which could help offset any losses stemming from a fare hike. Bus use has dropped by 21 percent since the Great Recession hit in 2008, a slump the group blames on reduced bus speeds due to increased traffic congestion and competition from ride hailing.

The study focuses on six of the busiest routes in the system, all with high potential for improvements: #4 Cottage Grove, #8 Halsted, #53 Pulaski, #66 Chicago, #79 79th, and #80 Irving Park. It outlines several relatively low-cost short-term strategies to shorten travel times, which could mitigate a potential ridership slump due to the fare increase.

These include building more car-free bus lanes (which already exist on the downtown Loop Link corridor and the South Side’s Jeffery Jump route) and enforcing them with traffic cameras. Transit-friendly stoplights shorten reds or extends greens to help buses travel more efficiently—the city is currently implementing this technology on Western and Ashland. And prepaid, all-door boarding can reduce “dwell time” at bus stops.

Whitehead adds that elected officials should look into establishing discounted fares for low-income residents, similar to what currently exists for seniors, students, and people with disabilities.

Center for Neighborhood Technology director Scott Bernstein argues that the CTA can add value for riders and raise additional revenue to prevent future hikes or cuts by upping its real estate game. The city’s recently passed TOD ordinance, for transit which eliminates the usual car-parking requirements for new construction near train stops, has led to a boom in upscale residential development along North Side el lines, but he says Chicago needs more affordable housing near stations, which would grow ridership.

He adds that renting CTA properties to more useful types of retail, such as grocery stores and pharmacies could help make stations “destinations, not just origins.” For example, more than 2,500 people have signed an online petition asking the CTA to rent out new retail space at Uptown’s Wilson station, currently under renovation, to the upcoming Chicago Market food co-op.

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The rehab of the Wilson station will create a large retail space that could potentially house a grocery store or pharmacy. Photo: John Greenfield

Streetsblog’s Steven Vance has floated a couple other proposals to make CTA fare policy more equitable in the event of a hike. Currently, customers who buy a single-ride paper ticket at el stations pay $3, a 75-cent surcharge over the fare with a Ventra card. Moreover, unlike card holders, riders who pay cash to board a bus have to pay the full fare again if they transfer to a train. Therefore more aggressive marketing of Ventra to boost enrollment could save money for riders who make the switch.

Vance adds that the CTA should implement fare capping so that customers who pay as they go for multiple rides on a single day never spend more than the price of a one-day pass, currently $10. This would be helpful for lower-income riders who don’t want to invest a Hamilton on a pass for fear that they might not get their money’s worth.

Under this scenario the day passes would no longer offer a cost savings, but they would still be handy for visitors who don’t want to purchase a permanent Ventra card, as well as for nonprofits that buy passes in bulk to distribute to clients. London, which was the first major city to implement fare capping, uses the same fare-card concessionaire as Chicago, Cubic Transportation Systems, so it wouldn’t be hard for Ventra to adopt this system.

If a CTA fare hike is in our future, how about some sugar in the form of service and equity improvements to help the medicine go down?

  • Tooscrapps

    I agree with Bernstein, the CTA should make better use of it’s real estate. The Logan Square Blue Line station is prime for redevelopment. Would love to see a Hong Kong-esque Rail + Property pilot there.

  • rohmen

    I’m sure there’s inefficiency in the budget that can be eliminated, and additional revenue that can be generated, but this is a fare increase to close a funding/budget gap. It always strikes me as strange when advocates try to make demands in exchange for agreement to a fare increase in that situation.

    I mean, we’d all love to see service improvements (and I agree sometimes you spend money to make money), and I’d personally be willing to argue for a more equitable fare structure, but I imagine those points necessitate more than a $.25 increase (unless the real estate development mentioned could close the gap), and I don’t necessarily see them suggesting to go above the $.25.

  • david vartanoff

    Fares cover a minor fraction of the actual cost of transit much as gas tax covers very little of the cost of highway infrastructure, salaries of traffic enforcers, etc. That said fares really only operate as either incentives or disincentives to usage along with frequency, reliability, and convenience. The nationwide decreases in bus and some rail services has been a direct result of service failures. The IL legislature’s perennial refusal to provide adequate funding for all of RTA’s clients is not magically going to make buses run more smoothly; npr will failing to continue to invest in dedicated lanes, traffic signal pre-emption, queue jumps, and other enhancements. If Chicagoland wishes to remain a good place to locate or expand businesses, decent public transit is a necessity.
    There is no doubt that some belt tightening might be called for, but frankly, as long as the US in AKLL levels operates as a cronu/oligopoly kleptpcracy, CTA is no worse than the rest.

  • Joe Versaggi

    For an extra quarter a ride, they should hire and assign more cops to the transit system.
    You can Google Sun-Times news articles in recent months on:

    “Crime on the L, CTA buses is up; 90% of serious incidents go unsolved” (7/31)
    “Criminal sexual abuse,’ other ‘non-index’ crime up on CTA in Chicago” (11/11)

    There have been severe police cuts in general on the North Side since Emanuel became mayor and shows no signs of improving despite his so-called promises.

  • architectonic

    The $0.25 base fare increase is actually below the rate of inflation from 2009, when the current fare levels were set. Adjusting for CPI, $2 in 2009 is worth $2.30 today. While service improvements would be wonderful, having a deflationary fare price doesn’t really leave much room for that. Even with improved concessionaires, advertising, and real estate management to offset budget pressures, costs inevitably rise over time.

    Beneficial changes to fare policy would be worthwhile regardless of fare levels. Capping daily pay-per-ride fares to not exceed the price of a daily pass would be great no matter what amount is charged for either. So would be eliminating the $0.25 transfer penalty for making a connection, even if it means a higher increase in base fares, since the transit system is a network rather than a series of lines and having it be the most efficient and effective will require transferring for many trips.

  • The Chicago Police Department provides policing on the CTA, as an “in kind” service to the CTA.

  • I think what we’re asking for our business operations/policy changes that should happen regardless of a budget/funding gap. But now’s the time that the conversation opens up to a wider audience, and it’s, again, time to insert these demands.

    Fare capping is getting talked about in New York City, now, too, as a way to make it more equitable for people with low incomes. Cubic transportation is responsible for the smart transit card in London, where daily and monthly fare capping is the policy. That needs to happen here. I think you could even get more rides out of it.

  • Joe Versaggi

    I understand that, and same is true on MTA’s NYCT with merger of city, transit, and housing police forces, but there are nowhere near enough of them, and their presence on CTA, especially on the North Side, is quite spartan by NYC standards.

  • Joe Versaggi

    Repeated METRA fare hikes since 2009 could have driven passengers toward CTA from closer in communities, which helped keep CTA fares down.

    Evanston – Chicago on the UP-N line is $5.25 (plus potential CTA fare to get much deeper into the Loop, away from Ogilvie). That also keeps NWU’s bus service in business.

    All METRA zones are to increase by another 25 cents in 2018, disproportionately targeting the lower zones, rather than raise by a common percentage, then round to the nearest quarter. It seems METRA’s revenue department personnel missed that week in 7th grade math in which ratios and proportions were covered.

  • CIAC

    I’m as big a believer as the average person is in the notion that government agencies often make incompetent decisions. But despite that, when faced with a choice about whether Metra has recently raised prices on a flat rather than a percentage basis for a reason or whether they just didn’t think about it at all, as you seem to think, I would think it is the former. One could make a strong argument that the fares of the lower zones should be closer to those of the more far off distances than they were for years. On some lines, passengers travelling either within the city or to inner-ring suburbs comprise a large proportion of the ridership. When some are encouraged to instead use the CTA, it means that Metra doesn’t have to spend money to increase capacity on trains by adding cars. It also probably makes sense when you look at it from a broad perspective about what is good for transit in the area as a whole. The people who work downtown and live nearby are likely to use transit, either the CTA or Metra, no matter what. Those in outer suburbs are the most likely to be more price conscious. The price of transportation may make the difference about whether they even choose to have jobs in the city and in some cases this could spread to decisions from employers about whether to locate in the city.

  • CIAC

    “Capping daily pay-per-ride fares to not exceed the price of a daily pass would be great no matter what amount is charged for either. ”

    Do you know anyone who this would apply to? Does anybody? The daily pass is $10. That means it would take at least five full-priced rides a day to save ANY money at all with the daily pass as opposed to the regular fares. And if they do save money on this fifth ride it likely would be far less than a dollar. This won’t change significantly with the fare increase. I can’t imagine that any Chicago area residents purchase a one day pass as opposed to using the regular fares or a monthly pass. The one day pass, I assume, is only used by tourists. It may be a reasonable price for them because a single ticket would cost $3 and a Ventra card has a $5 fee. But I think the idea that there are a significant amount of people that routinely take five or six full-priced trips a day is hard to believe. I don’t understand what the purpose of the suggestion of a cap at $10 is. It doesn’t seem to be coming from anyone’s experience. You’d have to take the CTA every two hours for twelve hours a day to reach six full-price rides. Unless someone takes four rides, nothing within any two hour stretch is anything more than $2.50 at most (and $2.75 when the fare increase goes into effect).

    “So would be eliminating the $0.25 transfer penalty for making a connection, even if it means a higher increase in base fares, since the transit system is a network rather than a series of lines and having it be the most efficient and effective will require transferring for many trips.”

    There is no transfer fee for bus to train rides, though technically there is a transfer charged, when compared with only train rides. Those two things cost the same. It would be interesting to see if someone has done any type of study to see how ridership may be affected by effectively not charging for the bus ride in those cases and compare it to train to bus rides when the bus ride is charged extra. I really don’t think the CTA should be encouraging short bus trips to or from the train when the person might otherwise walk. This causes capacity issues and increases costs and travel times. So I would go the opposite direction as you on this. I’d make it so bus to train trips cost an additional 25 cents just like everything else. Imposing a 50 cent transfer from the bus to the rail will mean it would cost the same as transferring from a train to a bus, which would seem to make sense. I can’t think of any argument why it costs more to transfer from a train to a bus to the reverse. Yet it does and has for several years.

  • Jeremy

    I know the $10 daily fee is mentioned in the article, but fare capping would be more prevalent for people approaching the $110 monthly pass fee.

    $2.50 x 2 rides a day x 25 days = $125 Not everyone works a Mon – Fri, 8 hour a day work schedule. Maybe a $110 monthly fee is too low, but fare capping is a good idea to implement.

  • architectonic

    You want to charge riders extra for the added inconvenience of a transfer, and thereby discourage transfers when that is the very basis of the network effect making the CTA a transit *system* rather than a series of lines. That is self defeating to the efficiency, effectiveness, and fairness of the system.

  • CIAC

    If the fare structure didn’t treat the CTA as if it was a “system” there wouldn’t be anything other than full-priced trips. Someone transferring to another bus or train line would pay another $2 or $2.25 fare. The fact that the transfer fare is less than one-eighth of this kind of dispels your point. I have almost never made any decisions about whether to take a second ride during a two hour window based on the extra 25 cents. I also don’t recall deciding to take a bus instead of a train because it is 25 cents less. This isn’t high enough to cause people make much of a difference in demand or in terms of price competitiveness with alternatives. But it probably is enough to deter people from taking barely wanted bus rides. Right now, there is no incentive for someone to walk three, four, or five blocks to a train station (at least if there’s not much of a wait) instead of boarding a bus, for example. That’s slows down everybody’s commute and increases costs. The extra 25 cents would deter enough people to make a difference.

  • CIAC

    I think it’s really inefficient and counterproductive to give people discounts that they are not expecting. What purpose does that serve? The reason why discounts are normally given is to encourage people to use a product or service that they otherwise wouldn’t. If someone is really concerned about saving money with a monthly pass and their travel patterns mean they would do so then it makes sense that some effort is required for them to do so. Otherwise, you might have people who save $5 or $6 a month or less and don’t even notice it. It’s extremely small but spread across the whole system this amount would add up and mean there is noticeably less money for service. Fare capping of the type suggested would be similar to a business giving all its customers to a coupon price even when they don’t use a coupon. It makes no sense. The purpose of coupons or other targeted discounts is to go after a more value conscious consumer. The same thing is true with pricing strategies the CTA might use to attract customers who don’t want to pay the regular fare. It doesn’t make sense to sweep up other people with this as well.

  • architectonic

    “The fact that the transfer fare is less than one-eighth of this kind of dispels your point.”

    No, it simply doesn’t. Nor does the fact that you consider it to be a meaningless nominal amount that should only impact the decision of taking a bus versus walking 3 blocks.

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