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Research Reports

Ferry Pricing Strategies Analysis

Description:

This report describes the results of research on ridership response to various fare pricing strategies. This research builds on the analysis of fare elasticity conducted by the Washington State Transportation Center (TRAC) under contract with the Washington State Department of Transportation (WSDOT). The basic objective of this study was to provide information from which to predict changes in revenues with changes in the fare structure.

Specific recommendations for an efficient and equitable fare structure requires knowledge about more than the fare elasticities. The fare structure needs to reflect policies concerning the provision of mobility to island residents, achievement of a desirable ratio of revenue to operating costs, an optimal vehicle and walk-on passenger mix, and the like. However, fare elasticities can be used to explore the implications of different policies designed to address these issues.

On the basis of the fare elasticity research, these observations can be made: (1) Care should be taken when the fares in categories with elasticities less than -1 are increased. The probable result will be a net loss in revenue. (2) The loss in commuter ridership on Cross-Sound and Vashon routes will probably be greater than any increase in fares. A reduction in fare may actually increase ridership enough to offset the loss. A properly priced monthly pass may be a very good way to attract more of these riders. (3) Riders on the Vashon and Cross-Sound routes have a very strong tendency to shift from vehicles to walking onto the ferries when the fare increases. The fare structure can be used as a way to control the mix of vehicles and walk-on passengers. (4) For all three categories of oversized vehicles included in this study, ridership was elastic with respect to fares. Increasing those fares apparently causes people not to make those trips or to divert them around the Sound. This finding lends support to the idea of providing an off-peak discount for those vehicles.

To achieve a higher degree of certainty in these findings and to make quantitative estimates of revenue impacts of fare changes, a different approach is required than the one used in this study. Data needs to be collected on a disaggregate basis. The report outlines how this research should be carried out



 

  • Date Published: November, 1989
  • Publication Number: WA-RD 193.1
  • Last Modified: September 20, 2007
  • Author: Cy Ulberg.
  • Originator: Washington State Transportation Center (TRAC)
  • # of Pages: 74 p., 2,078 KB (PDF)
  • Subject: Analysis, Data collection, Elasticity (Economics), Fares, Ferries, Forecasting, Future, Pricing, Research, Revenues, Ridership.
  • Keywords: Pricing, fare elasticity, ridership, data collection, ferry.
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This abstract was last modified April 29, 2008