Farebox recovery ratio

The farebox recovery ratio (also called fare recovery ratio) of a passenger transportation system is the fraction of operating expenses which are met by the fares paid by passengers. It is computed by dividing the system's total fare revenue by its total operating expenses.

Fare structures

There are two schools of thought in fare collections: a simple, flat rate fare structure (pay a fixed fare regardless of time of day and/or travel distance) or a complex, variable rate fare structure (pay a variable fare depending on time of day and/or travel distance).

In North America, South America, and Africa, the majority of the cities use simple, flat rate fare structures due to budgetary constraints. With the majority of North America, most of South America, and almost all of Africa being heavily reliant on the automobile for both short and long distance travel, majority of the transit budgets are allocated toward construction and maintenance of freeways and roads, with very little funding making way to investments in new mass transit technologies. Inadvertently however, the reliance on simpler fare structures due to their cheaper costs ends up increasing the tax burden on the agencies as flat rate fare structures have lower farebox recovery ratios, placing more pressure to the transit agencies to increase taxes, pursue higher fare hikes, or to cut services to maintain the transit system.

In sharp contrast, majority of the cities in Europe and Asia are heavily dependent on mass transit. Therefore, the majority of their transit budgets are used extensively on mass transit technologies, which enables these countries to install and maintain self-supporting and profitable variable pricing structures. Transit agencies that have instituted a more variable fare structure depending on distances or zones traveled have higher farebox ratios over those that rely on a flat-rate model.[1] In addition, recent urban transit scholars agree that variable pricing methods on public transit would actually be a profitable business which can alleviate many municipal agencies' budget problems.[2] For example, transit riders will be discouraged to travel longer distance due to increasing price as one travels further, reducing human congestion of mass transit riders who ride lengthier trips. On the other hand, an increased number of riders will opt to frequently use the transit system for multiple short and quick hop-on and hop-off trips as prices would be cheaper for shorter trips, which mass transit is better suited for. The downside however is that institution of variable-rate fares requires a high value initial investment in fare ticketing technologies such as the use of contactless smart cards, turnstiles or fare gates, automated ticket machines, as well as the IT infrastructure in which the return on investment may take years depending on the expected transit ridership volumes.[3]

Variable vs. fixed fare models

Agenda Variable fare model Fixed fare model
FBR ratio with high ridership figures 100%+ 50%+
FBR ratio with low ridership figures 60%+ 9%+
Most common system used Post-pay; fares are paid at the destination or upon disembarking at the end of each trip Pre-pay; fares are paid at the start of each trip
Unlimited ride passes Uncommon, but usually available for tourists Daily, weekly, or monthly unlimited ride passes
Incentives over cash Cheaper rates may be provided when using paperless contactless passes loaded with cash value Unlimited ride passes
Concessions Discounted variable rates for seniors, youths, disabled, or other groups as needed Discounted fixed rates for seniors, youths, disabled, or other groups as needed
Implementation costs Expensive, as both entry and exit points have to be accounted for to calculate variable fares. Fare-adjustment and change machines need to be installed. Cheap, as fare is collected at entry only. Since each rider is expected to have exact change, no fare-adjustment or change machines are needed.
Reliance on subsidies Less dependent, as each rider pays their share of distance traveled equally Heavily dependent, as fixed fares do not cover operational costs without regard to how each rider contributed to their distance traveled
Benefits Fairer fare structure; cheaper for shorter riders, more for longer rides. Entry and exit processes can also be used for data collection to efficiently manage how transit riders travel, allowing transit agencies to coordinate transfer times, reduce or increase transit needs based on hard ridership data. Simplicity; everyone pays the same price regardless of distance traveled.
Risks Confusing for first-time riders. Knowledge of the system requires an "acquired" skill Prone to higher rates and service cuts depending on subsidies received

Farebox ratios around the world

The following table lists farebox ratios for some public transportation systems around the world.

Ratio of fares to operating costs for public transport systems (%)
Continent Country System Ratio Fare system Fare rate Annual ridership Year
Asia Hong Kong Hong Kong (MTR) 186% Distance based HKD 3.50+ (cash)

HKD 3.50+ (Octopus card)

 1,553,000,000[4] 2012[5]
Asia Japan Osaka (Hankyu Railway) 123% Distance based JPY 150+ 1991[6]
Asia Japan Osaka (OMTB) 137% Distance based JPY 200+ 1991[6]
Asia Taiwan Taipei (MRT) 119% Distance based TWD 20+ (cash)

TWD 16+ (EasyCard)

 602,200,000[7] 2012[7]
Asia Japan Tokyo Metro 170% Distance based JPY 160+ 1991[6]
Asia Singapore Singapore (SMRT) 125% Distance based SGD 1.10+ (cash)

SGD 0.73+ (EZ-Link Card)

 2008[8]
Asia China Beijing Subway 59.5% Distance based CNY 3.00+ 2,460,000,000 2012[9]
Europe Netherlands Amsterdam (GVB) 77.1% Distance based 2015[10]
Europe Netherlands Rotterdam (RET) 78.5% Distance based 2015[11]
Europe Germany Berlin 70.3% Zone based EUR 2.60+ 2010[12]
Europe Belgium Brussels 35.2% 2007[13]
Europe Denmark Copenhagen 52% Zone based 1991[14]
Europe UK London Underground 92% Zone based 1,265,000,000[15][16] (2013/14) 2014[17]
Europe Spain Metropolitan lines of Ferrocarrils de la Generalitat de Catalunya (FGC) 93.18% Zone based 77,183,208 2014[18]
Europe Spain Madrid 41.3% 2007[13]
Europe Italy Milan 28% 1991[14]
Europe Germany Munich 42% Zone based 1991[14]
Europe Czech Republic Prague (DPP) 53.2% Flat rate CZK 24+ 1,232,000,000 2013[19]
Europe France Paris (STIF) 29.7% Zone based for passes
Distance based for tickets		 €1.80 4,298,800,000[20] 2014[20]
Europe Sweden Stockholm 37% Zone based SEK 44–88 (conductor)
SEK 25–50 (SL Access card)
Note: Tickets are not sold on buses.		 2007[13]
Europe Italy Rome 36% 2007[13]
Europe Austria Vienna 50% Flat rate EUR 2.00 1991[14]
Europe Finland Helsinki 49%[21] Zone based; each borough forms a zone. Boroughs with a small area are treated as being part of one of their neighbouring boroughs. EUR 2.80–7.00 (cash)
EUR 1.90–5.60 (travel card)
Transfer free of charge		 336,000,000[21] (boardings, one trip can include more than one boarding) 2011
Europe Switzerland Zurich 60% Zone based CHF 4.30+ 318,000,000 2014[14]
North America USA Amtrak 71% Distance & demand based 2009[22]
North America USA Atlanta (MARTA) 31.8% Flat rate US$2.5 2012[23]
North America USA Austin (CMTA) 12.4% Flat rate US$1–US$2.75, depending on modality 2012[23]
North America Canada Brampton (BT) 46% Flat rate C$3.25 (cash)

C$2.65 (Presto Card)

 2012[24]
North America USA Boston (MBTA) 43.7% Flat rate US$2.65 (cash) / US$2.1 (CharlieCard) 2014[25]
North America Canada Calgary 50% Flat rate C$3.00 2011[26]
North America USA Chicago (CTA) 43.0% Flat rate US$2.25 (cash)

US$2 (ChicagoCard)

 2012[23]
North America USA Chicago (Metra) 55% Zone based US$2.75+ 2012[27]
North America USA Cleveland (GCRTA) 21.5% Flat rate US$2.25 2002[25]
North America USA Dallas (DART) 13.7% Flat rate US$1.75 2012[23]
North America USA Detroit (DDOT) 13.9% Flat rate US$1.5 2002[28]
North America Canada Edmonton (ETS) 39.4% Flat rate C$3.00 2007[29]
North America USA Harrisburg, PA (CAT) 35.0% Flat rate US$1.75 2005
North America USA Las Vegas Monorail 56.0% Flat rate US$5 2006[30]
North America USA Long Island (MTA) 50.0% Zone based US$5+ 2012[23]
North America USA Los Angeles (LACMTA) 25.5% Flat rate US$1.75, with discounts for seniors, disabled, students 2015[31]
North America USA Maryland 23.1% Variable US$1.6–US$11, depending on distance & modality 2012[23]
North America USA Miami 24.1% 2012[23]
North America USA Minneapolis - St. Paul 31.4% Flat rate with rush hour and express surcharges US$1.75 to US$3 81,000,000 2008[32]
North America Canada Mississauga (MiWay) 46% Flat rate C$3.25 2011[26]
North America Canada Montreal (STM) 57.1% Flat rate C$3.25 2006[33]
North America USA New York City (MTA) 51.2% Flat rate US$2.75 2015[34]
North America USA New York/Connecticut (MTA) 36.2% Distance based US$2.25+ 2009 Q1[35]
North America USA New York/New Jersey (PATH) 41.0% Flat rate US$2.75 2015[25]
North America USA New Jersey (NJT) 56% Distance based US$2.25 2001[36]
North America USA Orlando (Lynx) 25.7% Flat rate US$2 29,200,000 2012[37]
North America Canada Ottawa (OC Transpo) 45% Flat rate C$3.65 (Cash)

C$3.30 (Tickets) C$3.00 (Presto Card)

 97,100, 000 2014[38]
North America USA Philadelphia (SEPTA) 40.7% Flat rate US$2 (cash) / US$1.55 (Token) / US$1 (Transfer) 2013[39]
North America USA Pierce County, WA 13.0% Flat rate US$2 2009[40]
North America USA Philadelphia/New Jersey (PATCO) 66.2% Distance based US$1.4+ 2012[41]
North America USA Portland Metro Area (TriMet) 22% Flat rate US$2.5 2010[42]
2012[43]
North America USA Greater Seattle Area (King County Metro) 29.1% Zone and peak based US$2.25+ 2013[44]
North America USA Puget Sound Region (Sound Transit) 22.2% Zone & distance based US$1.5+ 2007[45]
North America Canada Quebec City (RTC) 39% Flat rate C$3.00 2011[26]
North America USA San Antonio (VIA) 12.8% Flat rate US$1.2 46,700,000 2012[46]
North America USA San Diego MTS 40% Flat rate US$2.5 34,500,000[47] 2012[48]
North America USA San Francisco Bay Area (BART) 75.67% Distance based US$1.95+ 2014[49]
North America USA Oakland Airport Connector 96% Flat rate US$6 2015/2016[50]
North America USA San Francisco Bay Area (Caltrain) 63% Zone based US$3.75+ 2015[51]
North America USA San Francisco Bay Area (SFMTA) 35% Flat rate US$2.25 2016[52]
North America USA Staten Island (MTA) 15.2% Flat rate US$2.75 2015[25]
North America Canada Toronto (TTC) 73% Flat rate C$2.90 (tokens) $3.50 (cash) Jan 2016 538,000,000[53] 2013[54]
North America Canada Toronto, Hamilton and area (GO Transit) 78.2% Distance based C$4.68+ 2013[55]
North America Canada Vancouver (TransLink) 51.9% Zone based C$2.50+ 2010[56]
North America USA Washington, DC (WMATA) 62.1% Distance based US$1.95+ 2010[57]
North America Canada Winnipeg 60% Flat rate C$2.50 2011[26]
Oceania New Zealand Auckland 44% Zone Based 69,000,000[58] 2012/13[59]
Oceania Australia Canberra 21% Flat rate A$4.20 23,600,000[60] (2010) 2007[61]
Oceania Australia Sydney 20% Distance Based A$0.15 / km 281,000,000[62] 2014[63]
Oceania Australia Melbourne ~30% Zone and time based From A$3.76 / hour / zone 515,200,000[64] 2014[65]
Oceania New Zealand Christchurch 35% Zone Based 13,500,000[58] 2012/13[59]
Oceania New Zealand Dunedin 54% Zone Based 2,900,000[58] 2012/13[59]
Oceania New Zealand Hamilton 34% Flat rate 5,000,000[58] 2012/13[59]
Oceania New Zealand Wellington 57% Zone Based 35,000,000[58] 2012/13[59]

References

  1. ↑ Teik-Soon Looi, Kim-Hong Tan , "Singapore’s case of institutional arrangement for fare affordability", 11th Conference on Competition and Ownership in Land Transport, 2009-08-27
  2. ↑ Allison Yoh, Brian D. Taylor, and John Gahbauer, "Does Transit Mean Business? Reconciling academic, organizational, and political perspectives on Reforming Transit Fare Policies", UCLA Luskin School of Public Affairs, Institute of Transportation Studies , June 2012
  3. ↑ Dr. Jean-Paul Rodrigue, "The Geography of Transport Systems, Third Edition, 2013
  4. ↑ "2012 Annual Report - Key Figures" (PDF). MTR Corporation. Retrieved 2013-08-08.
  5. ↑ "2012 Annual Report - Consolidated Profit and Loss Account" (PDF). MTR Corporation. Retrieved 2013-08-08.
  6. 1 2 3 Dr. Kenichi Shoji, "Lessons from Japanese Experiences of Roles of Public and Private Sectors in Urban Transport", Japan Railway & Transport Review, December 2001
  7. 1 2 "2012 Annual Report" (PDF). Taipei Rapid Transit Corporation. Retrieved 2014-08-26.
  8. ↑ "Visions for a sustainable transport future – a comparative analysis of transport planning approaches in Singapore, Vienna and Brisbane" (PDF). Espace.library.uq.edu.au. Retrieved 2015-05-20.
  9. ↑ "杭州地铁拟定票价 “贵”为全国前三 市民喊吃不消" 钱江晚报 (in Chinese) 2012-07-20
  10. ↑ "GVB Annual Report". GVB. 2016. p. 11.
  11. ↑ "GVB Annual Report". GVB. 2016. p. 11.
  12. ↑ "Fahrinfo". Bvg.de. Retrieved 20 November 2014.
  13. 1 2 3 4 "Les transports ferroviaires régionaux en Ile-de-france" (PDF). Cour des Comptes. 2010. p. 128.
  14. 1 2 3 4 5 "Regional Coordination in Public Transportation: Lessons from Germany, Austria, and Switzerland" (PDF). Jrtr.net. Retrieved 2015-05-20.
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  16. ↑ "BBC News - Tube passenger numbers reach record high of 3.5m a day". BBC News.
  17. ↑ "Annual Report and Statement of Accounts 2013/14" (PDF). TfL. pp. 75–78. Fares revenue in LU was £2,286m … Operating expenditure on the Underground increased by 10.4 per cent to £2,542m
  18. ↑ "Presentació de resultats 2014" [2014 Presentation of Results] (PDF) (in Catalan). Ferrocarrils de la Generalitat de Catalunya; Government of Catalonia. March 11, 2015: 12–13. Retrieved July 4, 2015.
  19. ↑ "Výroční zpráva 2013" (PDF). DPP. pp. 124, 126. Total fares revenue 4 446 808 CZK ... Operating expenditure (excluding cost of transport path) 8 365 447 CZK
  20. 1 2 Rapport d'activité, STIF (PDF), STIF, 2014
  21. 1 2 "HSL's passenger numbers and ticket revenue increased in 2011". HSL. 2012-03-28. Retrieved 2015-06-30.
  22. ↑ "Amtrak Annual Report FY 2009" (PDF). Amtrak. Archived from the original (PDF) on 13 May 2012. Retrieved 2012-09-20.
  23. 1 2 3 4 5 6 7 Archived 1 May 2015 at the Wayback Machine.
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  25. 1 2 3 4 "Farebox recovery: how 14 systems compare". Railway Age. July 1, 2004. Retrieved 2014-08-21.
  26. 1 2 3 4 Archived 30 June 2015 at the Wayback Machine.
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  28. ↑ Archived 6 April 2013 at the Wayback Machine.
  29. ↑ City of Edmonton
  30. ↑ Calculation based on figures of "$159,000 needed daily to cover operating costs and debt service" and "falling as much as $70,000 a day short". Sofradzija, Omar (February 11, 2006). "Monorail rating, ridership go down: Bleak outlook puts bond sale at risk". Review Journal. Retrieved 2007-06-30.
  31. ↑ "Metro, Fares". Metro.net. Los Angeles County Metropolitan Transportation Authority (Metro). Retrieved March 10, 2015.
  32. ↑ "2009 Twin Cities Transit System Performance Evaluation: Chapter 4. Regional Transit Ridership and Operating Statistics" (PDF). Metropolitan Council. 2009. Retrieved 2013-03-20.
  33. ↑ Archived 18 March 2009 at the Wayback Machine.
  34. ↑ Archived 13 February 2015 at the Wayback Machine.
  35. ↑ Metro-North Railroad Financial Ratios (March 2009)
  36. ↑ CT Ridership Fare Revenue and Cost Database
  37. ↑ 2012 Annual report Lynx
  38. ↑ http://www.octranspo.com/index.php/about-octranspo/reports
  39. ↑ "SEPTA - Southeastern Pennsylvania Transportation Authority" (PDF). Septa.org. Retrieved 20 November 2014.
  40. ↑ Martin H. Duke. "Pierce Transit Service Cuts". Seattle Transit Blog. Retrieved 20 November 2014.
  41. ↑ Archived 21 May 2015 at the Wayback Machine.
  42. ↑ TriMet Funding Retrieved 2011-06-03
  43. ↑ TriMet Fare Charges Retrieved 2012-11-12
  44. ↑ Archived 6 January 2015 at the Wayback Machine.
  45. ↑ Q4 2007 Financial Report
  46. ↑ Archived 8 September 2013 at the Wayback Machine.
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  48. ↑ Metropolitan Transit System General Information
  49. ↑ "BART 2016 Factsheet" (PDF).
  50. ↑ Baldassari, Erin (27 November 2016). "BART's Oakland Airport Connector losing money; Uber, Lyft to blame?". East Bay Times. Retrieved 29 November 2016.
  51. ↑ "Preliminary FY2016 Operating Budget" (PDF). Caltrain.com. Retrieved 16 July 2016.
  52. ↑ "San Francisco Municipal Transportation Agency, California; Transit" (PDF). San Francisco Municipal Transportation Agency. Retrieved 16 July 2016.
  53. ↑ "2016 TTC Operating Statistics". Retrieved 2016-04-21.
  54. ↑ TTC Annual Report, 2013
  55. ↑ Metrolinx Annual Report 2012-2013
  56. ↑ Archived 20 February 2012 at the Wayback Machine.
  57. ↑ Archived 2 July 2013 at the Wayback Machine.
  58. 1 2 3 4 5 "Transport volume : Public transport volumes". Transport.govt.nz. Retrieved 20 November 2014.
  59. 1 2 3 4 5 "Access to the transport system : Accessibility of public transport". Transport.govt.nz. Retrieved 20 November 2014.
  60. ↑ "Public transport use in Australia's capital cities: modelling and forecasting" (PDF). Bureau of Infrastructure, Transport and Regional Economics (Report 129): 22. 2013. Retrieved 24 August 2016.
  61. ↑ Archived 14 October 2013 at the Wayback Machine.
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  63. ↑ "The cost of transport and fare setting | Transport Sydney". Transportsydney.wordpress.com. Retrieved 2015-05-20.
  64. ↑ "Network statistics". Public Transport Victoria. 2014. Retrieved 24 August 2016.
  65. ↑ Archived 29 March 2015 at the Wayback Machine.
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