CONSUMER-BASED TRANSIT PRICING AT THE CHICAGO TRANSIT AUTHORITY. VOLUME 1
This report discusses the development and implementation - as well as the resulting revenue and ridership impacts - of a new fare structure for the Chicago Transit Authority. The CTA sought a new structure that would offer riders a range of options, including the ability to pay less than they did under the previous structure. Through the use of "deep discounting", in combination with differential pricing (based on service quality or time of day), it was felt that the CTA could achieve the typically elusive goal of increasing both ridership and revenue. Based on research into innovative pricing at other transit properties, coupled with market research into the prospective travel behavior and fare payment preferences of CTA riders, the study team developed a model to predict the ridership and revenue impacts of different fare structures. At the same time, a range of types of fare structures was assessed in terms of implementation and operational difficulties. Following the testing of over 100 different fare combinations and presentations at 11 public hearings, a single option was adopted by the board. After 8 months of the new structure the CTA has successfully achieved its primary goal of increasing revenue without suffering significant ridership loss. These findings indicate that this market-segmented pricing strategy holds substantial promise for the transit industry as a whole.
- Work was performed in conjunction with: R.L. Oram Associates; COMSIS Corporation; Midwest System Sciences, and Martinez Associates, Limited.
Multisystems, Incorporated1050 Massachusetts Avenue
Cambridge, MA United States 02138
- Fleishman, D
- Publication Date: 1991-10
- Pagination: v.p.
- TRT Terms: Consumer preferences; Discount; Elasticity (Economics); Fares; Hours; Market development; Off peak periods; Peak fares; Pricing; Ridership
- Old TRIS Terms: Fta section 8
- Subject Areas: Economics; Finance; Public Transportation;
- Accession Number: 00627832
- Record Type: Publication
- Report/Paper Numbers: FTA-IL-08-7002-92-1
- Files: TRIS
- Created Date: Sep 20 1993 12:00AM