THE FARE CUTTER CARD: A REVENUE-EFFICIENT AND MARKET-SEGMENTED APPROACH TO TRANSIT PASS PRICING

Recently, many transit properties have studied or instituted prepaid passes as part of marketing programs designed to retain existing riders and attract new riders. At the same time, transit properties are facing severe financial problems. As a result there can be conflict between the marketing department that wishes to offer an attractive fare mechanism that offers a substantial discount and the financial department that is concerned about lost revenue and free rides. To resolve this conflict, the Greater Bridgeport Transit District (GBTD) has introduced the Fare Cutter Card as past of a comprehensive demonstration of market-based fare policies. This card (actually a permit) has a substantially lower initial cost than an unlimited-use pass but requires a $0.25 cash-drop for each ride. The card is therefore more affordable to low-income users while returning revenue to GBTD for all rides taken. Different approaches to implementing the Fare Cutter Card may enable a major extension of fare prepayment without additional loss or a major reduction in revenue losses allocated with fare prepayment, while maintaining the existing level of use. The GBTD experience to date with the Fare Cutter Card is preliminary, but the card appears to be popular with riders. In this paper the analytical issues associated with the assessment of permits as compared with unlimited-use passes are outlined, the benefits of tailoring prepaid mechanisms to the characteristics of user submarkets are summarized, and marketing-related benefits of the Fare Cutter Card approach are discussed.

• Record URL:
  • http://onlinepubs.trb.org/Onlinepubs/trr/1983/947/947-005.pdf
• Summary URL:
  • https://scholar.google.com/scholar_lookup?title=THE+FARE+CUTTER+CARD%3A+A+REVENUE-EFFICIENT+AND+MARKET-SEGMENTED+APPROACH+TO+TRANSIT+PASS+PRICING&author=R.+Oram&author=F.+Spielberg&author=V.+Milione&publication_year=1983
• Availability:
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• Supplemental Notes:
  • Publication of this paper sponsored by Committee on Transit Management and Performance. Distribution, posting, or copying of this PDF is strictly prohibited without written permission of the Transportation Research Board of the National Academy of Sciences. Unless otherwise indicated, all materials in this PDF are copyrighted by the National Academy of Sciences. Copyright © National Academy of Sciences. All rights reserved
• Authors:
  • Oram, Richard L
  • Spielberg, Frank
  • Milione, Vincenzo
• Conference:
  • 62nd Annual Meeting of the Transportation Research Board
  • Location: Washington District of Columbia, United States
  • Date: 1983-1-17 to 1983-1-21
• Publication Date: 1983

Media Info

• Media Type: Print
• Features: Figures; References;
• Pagination: pp 28-34
• Monograph Title: Transit management and services
• Serial:
  • Transportation Research Record
  • Issue Number: 947
  • Publisher: Transportation Research Board
  • ISSN: 0361-1981

Subject/Index Terms

• TRT Terms: Case studies; Commuting; Low income groups; Marketing; Off peak periods; Pricing; Revenues
• Geographic Terms: Connecticut
• Old TRIS Terms: Off-peak; Passes
• Subject Areas: Administration and Management; Finance; Highways; Public Transportation; Society; I10: Economics and Administration;

Filing Info

• Accession Number: 00389391
• Record Type: Publication
• ISBN: 0309036682
• Report/Paper Numbers: HS-037 821
• Files: TRIS, TRB
• Created Date: Oct 30 1984 12:00AM