The High Cost of Flat Fares: An Examination of Ridership Demographics and Fare Policy at the Los Angeles MTA

The Los Angeles County Metropolitan Transportation Authority (MTA) currently uses a flat fare structure, with several types of special passes, to collect passenger revenues. The fare structure is termed "flat" because each passenger pays the same base fare regardless of time, direction, or distance of travel. This analysis of MTA's ridership demographics shows that this fare structure is neither efficient, effective, nor equitable, though it does offer some operations simplicity. Typically transit dependents -- riders who are more likely poor, non-white, young or old, and female -- maker shorter trips, more non-work trips, and use regular monthly passes less than other comparable passenger groups. As a result, these transit dependent groups, on average, pay relatively more for transit service on a per mile basis, while covering a larger portion of the costs of providing the service, than do choice (or discretionary) riders. This report suggests that switching to a differentiated fare structure, where fares vary by mode, time of day, and/or distance traveled, could improve cost efficiency by more closely matching fares to the actual cost of service provision, increase service effectiveness by increased short distance and off-peak travel, and increase social equity by substantially reducing the cross-subsidy of higher-income riders by lower-income riders.