Honored Citizen and youth fares: Are they fair?

A discussion of honored citizen and youth fares, and potential alternatives.
I was going to post this a few days ago until all of this week’s news. But while the discussion after the announcement of TriMet’s budget cutting has focused on service changes, the other component of what’s going on–fares–is still worth considering. The recent announcement, and the tradeoffs between equity and ridership/revenue, leads to an interesting discussion. To what extent should reduced fares for “Honored Citizens”, as TriMet calls them, be provided? A similar question should be asked about youth fares as well. Do these serve a socially beneficial purpose? Are they little more than age discrimination? Assuming there is a useful purpose served, would it be served better by some other, more direct policy?

The nitty-gritty on fare categories

Before we get into the idealized discussion of the whys and wherefores of age-based fares, one important detail must be mentioned up front. The Federal Transit Administration requires that federally-funded transit systems, such as TriMet, charge senior citizens no more than 50% of the full fare during off-peak hours. (I’m not sure if the FTA defines these hours, or gives agencies some leeway to tailor the definition to their local circumstances). During peak hours, the requirement is not in effect. TriMet, however, does not levy peak-hour fares–the same fare is charged all day, for all riders. Also, the discount given to seniors is greater than 50%–an all-zone ticket for adults is $2.40, but for seniors is $1, a discount of 58%. The discount on passes is even greater–a monthly pass would cost me $92 but my mother could have one for $26, less than 30% of the price. Honored citizens living downtown can get a limited bus pass for $10/month. (TriMet’s fare schedule is here).

Seniors, along with the disabled, are grouped into a category TriMet calls Honored Citizens. This category includes the following:

  • Senior citizens 65 and older, who require proof of age when riding.
  • Medicare recipients, who are required to carry a Medicare ID. If one is receiving Medicare prior to 65, it generally means either that the individual is near 65 and has opted for early retirement, or is disabled.
  • Other disabled persons who meet specific requirements, and who are required to carry a TriMet-issued ID stating such.

This article is only concerned with regular transit service; LIFT paratransit is another issue altogether.

TriMet also provides youth fares, for passengers 7-17, and persons 18 or older pursuing a high school diploma or GED. College students are not covered by this program (some colleges provide passes for their student body; however this is a separate program and not discussed here). Children 6 and under ride free with a fare-paying adult. Youth fares are also a substantial discount over adult fares, though not as much (presently $1.50 for a all-zone single-ride ticket, and $27 for a monthly all-zone pass).

TriMet’s stated rationale for the discounts it provides may be found here and here.

Rationale for age-based categories

The senior discount is a longstanding fixture of American business and political culture. Many businesses provide discounts to senior citizens–restaurants, movie theaters, hotels, and transportation companies both public and private. And as noted above, public transit agencies in the US are required to provide them to passengers. In the context of transit, several rationales are frequently offered for this:

  • Seniors live on a fixed income, generally from Social Security or private retirement plans, which may (SS) or may not (most pensions) be indexed to inflation. Most are not in the workforce (and many of those who are still working are doing so due to poverty). Senior citizens also frequently have higher medical expenses associated with geriatric and end-of-life care, though Medicare benefits offset this.
  • Senior citizens are also more likely to have mobility issues than are younger age cohorts, simply due to the biological pathologies of old age.
  • Senior citizens are more likely to be transit-dependent, particularly when driving is no longer an option due to medical issues.
  • Senior citizens, by virtue of being less likely to be in the workforce, are more likely to use transit during off-peak hours, and thus are desirable customers to have.
  • Many in US culture associate advancing age with virtue, and believe that mere survivorship past the working years ought to merit reward. Certain generations are venerated for the hardships their members collectively endured during their youth, and some consider making it to old age to be evidence of wisdom and/or a cleaner lifestyle, assuming that those who engage in chronic pathological behavior are more likely to perish before reaching retirement. Senior discounts are widely viewed as an entitlement–even by wealthy seniors in good health–and the designation of “Honored Citizen” does nothing to counteract that meme. (Could you imagine TriMet–or any government agency–referring to a benefits program targeted towards the poor in such glowing terms? I can’t either; poverty is routinely stigmatized in our political culture, but advancing age is praised).

Similar arguments apply to youth fares as well. I covered youth fares (and other issues related to families on transit in this Human Transit guest post).

  • Youth traveling alone are likely to not have much money, and be dependent on parents for funds.
  • Those who travel with children are more than likely to be carless–having kids along often tips the balance from bus/train to car for many trips–if nothing else, bringing along kids in the minivan makes you (legally) a carpool. Also, in many cases the only reason children are brought along on errands is that nobody may be available to watch them at home.
  • Families with small children (particularly those still using strollers) also frequently have mobility issues.
  • Families with children also are often engaged in off-peak travel. (Students using transit to get to and from school generally are peak riders on the way in, and off-peak riders on the way home, unless activities delays their departure from school)

Price discrimination, generally

Age-based fares (for identical trips on transit) are examples of price discrimination, which occurs when the same supplier sells identical goods and services to different customers at different prices. Some sorts of price discrimination are commonplace and generally considered unobjectionable, such as volume discounts (TriMet’s passes can be considered an example of this). Other types may be viewed with skepticism, or may be outright illegal–certainly if you’re the buyer being asked to pay the higher price, you might want to know why. Price discrimination doesn’t include practices like distance-based pricing (different prices are charged for different trips) or off-peak discounts (trips made at different times are generally not substitutable), though sometimes these practices may have a discriminatory effect, and sometimes this is intentional. (Airlines’ common practice of offering lower prices for round-trips involving a Saturday stay are intended to distinguish between tourists and business travelers, and charge a higher price to the latter).

One reason that price discrimination occurs is to permit suppliers to capture as much of the surplus value as possible. When a supplier charges a flat high price for something, volume is lower, as those market participants who are unwilling or unable to pay the high price don’t buy. When a supplier charges a flat low price, then he/she wins the business of those who won’t pay the higher price–but loses money from those customers who were willing to pay the higher price, but instead get a better deal. If the supplier can figure out which customers would be willing to pay a high price and charge those the high price, but make the same product/service available to the more price-sensitive customers at a lower price, the supplier can get more revenue than s/he would from a single set price.

Another reason for price discrimination is equity concerns. The reasons for age discrimination given above are equity-based–TriMet doesn’t give seniors and children lower prices because it thinks it will lose their business otherwise; it does so for perceived social reasons. (And because of the FTA mandate).

One problem, however, is this: Maximizing revenue and maximizing equity frequently call for opposite pricing strategies. A transit agency’s customers are often divided into “choice” and “captive” riders. (The latter term is problematic for many reasons, some of which are revealed by this discussion, but it suffices to illustrate the point). The latter group has a low elasticity of demand (they are stuck with transit, more or less) while the former has a high elasticity of demand (they can easily switch should transit no longer provide sufficient value). The choice riders are generally wealthier than the captive ones are. Were a transit agency to try and maximize social equity by assisting the poor, it would find a way to charge the poor less. On the other hand, were they to try and maximize revenue, the ideal strategy would be to charge the poor more–they’re the dependent riders, after all, and will have less ability to contest the fare increase by switching to another mode.

(This is different than the strategy employed by many retailers, who try to find ways to charge the wealthy more for the same or similar products and services. Gasoline, for example, is generally more expensive in wealthy neighborhoods than in poor ones, despite being the same in both locations).

This is an important point to keep in mind, both for this discussion, and in the broader context of TriMet’s budget woes. When an agency is strapped for cash, it becomes increasingly difficult to maintain a pro-equity pricing and service strategy, and soaking the poor becomes a tempting option.

Should we focus on age?

For the purpose of this section, we’ll focus on senior fares. A similar analysis can be applied to youth fares, but that is left as an exercise for the reader. (Feel free to discuss in the comments!)

Consider the five justifications for senior discounts given above. Only one of them–the desire to venerate senior citizens as a matter of social custom–is directly dependent on the age of the passenger. The other reasons–poverty, disability/mobility issues, off-peak travel, and lack of availability of cars, correlate with age, often strongly, but are not dependent on it. There are plenty of young people who are poor, disabled, have no access to an automobile, or more likely to travel off-peak. So the question is obvious: Why not replace the age-based discounts with discounts based on these other criteria?

Disability and mobility issues are, in fact, covered by TriMet. As mentioned above, Honored Citizen fares extend to the disabled, in two broad categories. TriMet also provides services to the mobility-impaired via LIFT (at far greater financial cost to the agency). TriMet assists mobility-impaired passengers in other ways besides the farebox as well. The agency’s operations are (as required by law) compliant with the Americans with Disabilities Act. All vehicles are designed to accommodate wheelchairs and other mobility devices. And many routes feature short spacing between stops, in part because the mobility-impaired are adversely affected by longer walks to a transit stop.

TriMet’s does not presently provide benefits to the poor at the farebox–there is no means-testing of fares. Poverty advocates such as OPAL are upset at the loss of return privileges on a single-ride ticket, on the grounds that it will impact the poor adversely. On the other hand, many of TriMet’s routes are social-service routes–routes with consistently low ridership that are expensive to operate, and which are arguably inessential for a comprehensive regional network–operated to provide lifeline service to low-income riders and communities along the line, and with no expectation of good financial performance. (These lines are often the most likely to be cut during a budget crisis). There are, however, a few roadblocks to reduced fares for the poor: For one thing, the poor often don’t have terribly effective advocacy in the corridors of power. Groups like OPAL do a fine job, but other constituencies often bring far more political muscle to the table, muscle that the poor can’t afford to purchase. For another, being perceived as a welfare agency can be damaging to a transit authority’s standing with the broader public–the poor aren’t popular in many quarters, and agencies which carry out a primarily social service mission risk losing popular support and funding.

The third criteria is transit dependence. Defining transit-dependence, and coming up with ways it could be proven to a TriMet ticket agent or fare inspector, is potentially problematic. Some examples might include discounts for those who can prove that they are not licensed to drive and/or do not own an automobile; Giving explicit discounts for this might be difficult, as proving transit dependence isn’t easy. One might be able to supply a DMV ID card or suspension/revocation order to prove one isn’t able to drive easily, but other situations (such as low-car households) may be more difficult to document. I’m not aware of any agency that offers discounts of this sort; and a quick Google search doesn’t reveal anything.

The final alternative–peak-hour surchages (or alternately, off-peak discounts) are something which has been talked about recently. Currently, TriMet has no plans to implement such a thing, but the recent white paper on electronic fare collection mentioned this as a possibility. In addition to having a load-balancing impact, charging a lower fare for off-peak travel also can promote economic equity, as it gives cash-strapped riders an option for journeys which are flexible in time, such as shopping trips or other errands. An alternative to different fares might be different expiration times. For example, TriMet could limit tickets to two hours of one-way travel during rush hour (opening to 9, and 4-7, say), whereas tickets purchased outside the window might be good for longer and/or include round-trip privileges.

One other thing

One other thing to consider: Senior citizens have long enjoyed quite a bit of political power, compared to other age cohorts; this is especially true with the boomers entering into retirement, due to simple demographics. Senior citizens are generally regarded as more reliable voters than are younger groups; there are age-specific lobbies (such as the AARP) which both provide advice to seniors on issues, and lobby the government on their behalf. There’s a good reason that many of the current plans to “reform” Social Security which are being bandied around Washington DC tend to delay the effects of austerity until the next generation (us Xers) reach retirement age: doing otherwise would be political suicide. Any attempt to substantially reform the current pricing structure would probably produce some uncomfortable pushback, even if the net effect for most people is nil.

Thus, a few questions to consider:

  • Do age-based fares (whether for the old or for the young) serve a legitimate and useful purpose?
  • Would other pricing or service strategies be better?
  • What balance between equity (whether based on economic factors, or other parameters) and financial performance (maximizing farebox return) should be struck?

27 responses to “Honored Citizen and youth fares: Are they fair?”

  1. Removing senior citizen discounts is one of the kooky transit ideas discussed in PA’s new cover story! It only received a kookiness rating of two IPAs, however.

    I did not know, until informed by TriMet as part of that story, that a fare discount of at least 50% for seniors over 65 during off-peak hours has been a minimum requirement for FTA grant eligibility since 1976, long predating ADA. In 1976, 15% of US seniors lived in poverty; today, it’s 8% of Portland seniors and ~11% of seniors nationally. Among Portlanders 18-24, meanwhile, the 05-10 Census estimates 21% in poverty. (I’m not sure whether that includes full-time college students, though.)

  2. I could use an IPA or two right about now.

    At any rate, given that this is Portlandia, home to numerous retired young people, a fare category ought to be created for them. :)

  3. I like the idea of a transit discount associated with a state nondriver ID card — seems tidy. Food stamps are also a popular way to identify poor people. (I’d be curious to see studies of whether it’s better to pile an extremely high effective marginal tax rate where food stamps phase out, or to have various means-tested benefits phase out at different income levels.

    Skinny jeans might be a disqualifying factor for such a discount. This would have its own ancillary aesthetic benefits – sort of a public art program in reverse.

  4. Anyone who gets mentioned in the “Craigsbest” at Portland Afoot (and can prove it’s them) gets a discount. Also, anyone who writes for a successful transit blog should be able to buy a monthly pass for $10.


  5. Trimet’s purpose is getting people where they want to go. Charging fares helps keep the buses and trains running, so Trimet should charge the max allowed fare (50% off, off-peak only) for seniors/disabled.

    If Oregonians want fares subsidized for low-income people, for equity reasons (I do), the State should pay for the extra subsidies needed. Otherwise, Trimet is robbing Peter (non-disabled,

  6. Let’s turn the senior discussion sideways for a moment. I prefer to think of senior discounts not as something that we have decided to give the elderly. Rather, those discounts are something that we have decided to give to ourselves once we become elderly. With a little luck we’ll all be elderly at some point, right?

  7. “were they to try and maximize revenue, the ideal strategy would be to charge the poor more–they’re the dependent riders, after all, and will have less ability to contest the fare increase by switching to another mode.”

    I am not sure that is true. Price sensitivity is much higher in the poor. Seniors are also often more price sensitive than the rest of us. And its not necessarily that they have less money. They have a different sense of price/value because they grew up with lower prices. This is one of the reasons for “senior discounts”.

    The problem with distance based fares is that the cost of service may have little to do with the distance traveled. If you reduce trips from central Portland to Gresham will that allow you to reduce costs? Or will you simply have vehicles that are empty. As far as I can tell when riding, crowded buses are almost an exclusively inner ring issue. Even during rush hour there isn’t crowding in Hillsboro or Gresham. At least on MAX. But the 15 can be crowded even at mid-day in Buckman.

    Perhaps is would make sense to have a mid-day (an mid-night) discount ticket like the old short-tripper for people who only want to travel during off-peak. If you make it a non-standard fare that is available for people who make frequent use at those times it eliminates the confusion that starts to happen where you have different fares at different times of the day.

    As for youth fares. I think anything we can do to make youth more independent is a good idea. And getting them used to taking transit is also something that has long term benefits. Surveys seem to show that one of the largest barriers to using transit is being unfamiliar with it. Getting people addicted to your product when they are young is always good for business, just ask the tobacco companies.

    I also think you can make an argument that attracting choice riders is a big part of Trimet’s costs. If they were simply trying to provide service for those who have no other alternatives, they could cut a lot of costs. If you doubt it, compare medical facilities that only serve the poor with no alternative to those that are trying to attract people who can pay and have a choice.

    I also think its important to keep in mind that the sole reason for fares is not really the revenue they generate. By the time you get done with the costs of collection and the delays they create for vehicles, there is not a huge net value in collecting them. What they do provide is a level of control over passenger behavior and eliminate “frivolous” use of the service.

    One of the problems identified with a fareless system is that you end up serving a lot of trips that are for a couple blocks. The cost of those trips, including the delays as buses stop at every corner, was the real problem. Not the loss of fare revenue.

  8. Good discussion, Scotty.

    It really is important to picture oneself as part of the solution, not the problem. If TriMet were awash in cash, then why not charge under the statutory max? But when other fares are being raised and service reduced, then why not raise our fares, too (especially the monthly/annual passes)? Again, just a penny-for-penny increase in H fares in step with the increases in full fare tickets would probably be enough to eliminate all proposed bus cuts, and we’d still be well below the ORS maximums.

    I have no problem with drastically reduced means-tested fares. Fare discrimination based on age or either of the other H fare (or Y fare, for that matter) qualifiers feeds stereotypes.

    It would be interesting to see a study of the relative wealth and income among different TriMet riders by age groupings. If it would end up being consistent with various media reports over the years then the young would be at the bottom in both areas while the old would rank high in wealth if not income.

  9. Great overview. Let me throw a couple of other ideas into the mix. The framing above looks at maximizing revenue versus maximizing equity. But I would also suggest there are valid public purposes in seeking some other goals: maximizing sustainability (which might drive goals to capture choice riders, policies to support sustainable land use patterns [thus my own preference to reward short trips], use lower-polluting energy sources, etc.) and maximizing efficiency (best of use of scarce resources provided by tax payers).

    These complex trade-offs ensure there will always be plenty of opportunities for discussion on this blog!

  10. “policies to support sustainable land use patterns [thus my own preference to reward short trips]”

    Let me again express skepticism that a lower transit fare is going to drive decisions that effect land use patterns. The shorter trip is already a much larger reward than any break on the fare. The fare difference is just not going to be factor.

  11. One of our managerial staff members rides SMART from Barbur TC to WV to get to work. He is over 60 and pays just $15 for the monthly pass to ride 12 miles each way. I don’t know his income, but it’s probably reasonable to say that he makes at least $150,000/year.

    The point is: sometimes our “honored citizens” don’t necessarily need the discount.

  12. Especially as the boomer generation continues to mortgage my generation’s future by increasing government spending without increasing taxes.

  13. Seniors vote and have been known to raise a ruckus…that may help keep fares low. Too low in my view; I couldn’t believe it when my monthly pass dropped to $26. Some places don’t have a senior discount…I asked for one at Starbucks once and was denied. Ross is right on fares…my guess is the time spent collecting/checking fares on buses is about equal to the percent of farebox recovery. Running a no fare system would be 25% faster. Just a guess.

  14. The issue of sustainability is a big one, and–to play devil’s advocate, as I broadly support sustainability as a goal (though not necessarily all means to achieve it)–I think is a big source of friction between TriMet and parts of its ridership base.

    TriMet, even if it did nothing else, supports sustainability simply by running transit and giving people an alternative to the car for long trips. (With the caveat that low-ridership routes frequently average fewer passengers than the break-even point for bus-vs-car energy usage). Some of the things that the agency does to increase sustainability–including attempting to attract choice riders–are perceived as coming at the expense of the existing ridership, especially when long-term projects like new MAX lines are built and opened concurrently with budget cuts. FTMP, the money for capital projects comes from a separate pot, but many riders don’t understand that. Many poor people, in particular, are interested in food on the table and a roof over their heads, and depend on TriMet to help them with these things, and broad environmental concerns are often well to high up the Maslow Hierarchy for them to give a rip about.

  15. For some reason, that xkcd cartoon reminds me of the dystopia portrayed in the movie Demolition Man:

    “In the future, every restaurant is Taco Bell”.

  16. On a more serious note, Al’s comment is an example of what I mean: Some TriMet riders think that “sustainability” is little more than a fig-leaf to cover naked pork-barrel politics. For those who support it and are serious about it, that’s a big problem.

  17. Scott, it is a serious problem I know.

    But the word is too easily bandied about.

    It’s become another code word that gets thrown into everything.

    Heck, they now have Sustainability Directors!

    Sustainability can’t be a “department”, it has to be part of the already existing bureaucracies.

    It has to be implemented into already existing policies, not used to create new policies.

    It’s like throwing the word green into everything, after awhile it has no meaning.

  18. When some new initiative, like sustainability, gets its own department, that usually means one of several things:

    1) The organization wants it taken seriously, and is concerned (or has evidence) that the existing bureaucracy doesn’t care about the initiative (TriMet ops have long had a cultural focus on mobility, and may regard a green agenda as a distraction), and so creates a separate arm of the organization to pursue the goal.

    2) The initiative is orthogonal or unrelated to the existing departments

    3) The organization wants to look like they’re taking the initiative seriously, but wants to keep it out of everyone else’s hair.

    Which applies here, I dunno.

  19. Ross, you have your cost-cutting partly backward. Service aimed at coverage for social-service purposes is generally among the most expensive to run. Some “choice” services (e.g. WES) are also expensive, but by and large it’s more efficient per rider to serve the major corridors and run an effective network than to primarily provide coverage.

  20. My opinion:

    The H and Y fares are both based on stereotypes, and should be considered in that light.

    The H fare (with one exception mentioned below) is based on a *positive* stereotype, while the Y fare is based on a *negative* one.

    Our society “honours” and sympathises with senior citizens and people with disabilities, unless they are considered by society to be “mentally ill”.

    Our society does not “honour” young people in the same way. The Y fare is based on the stereotype that kids don’t have the *capability* to pay the same fare as adults. From about the age of 13, I personally refused my youth discount on transit because I saw that not taking equal responsibility undermined my fight for equal rights. I feel that this also applies to the H fare in regard to those considered “mentally ill” by society. In full disclosure, I am one of those individuals, and I refuse my discounted fare for that as well.

    Since the H fare is required by federal law, there’s nothing I can suggest except charge the full 50% as authorised. Even though peak hours could legally be exempted, I don’t support that because transit fares should be as simple as possible. Agencies have leeway as to qualifications for the H fare, I suggest making the qualifications as stringent as legally possible.

    No law requires a Y fare. I personally oppose it, at least in regard to teenagers. I *do*, however, support “affiliation programs” such as school-sponsored passes similar to what colleges have, since they aren’t directly age-related. In fact, this *could* have a positive, empowering effect on teenagers in the same way it has on college students.

    However, the Y fare may be worth retaining in regard to children under about age 12. Independence and equal rights aren’t yet serious issues for most kids at that age. In fact, very few even take transit by themselves. Perhaps the age limit for riding free when accompanied by a full fare-paying adult should be raised from 6 to 11. That would make family travel by transit much easier (Boston, MA and London, England have done something similar).

  21. hey Chris, so I have heard talk of removing the monthly LIFT pass. I think that is a great idea considering that 1 round trip on the LIFT costs Trimet more than they charge for the monthly pass so something needs to be done to discourage abuse of the system and charging per trip would be a tiny step in this direction.

    That discussion though made me think of something else, Tri-met has to provide single ride passes at a 50% discount of what they charge for full ride passes, do they have to provide honored citizen/youth monthly passes or could they just provide the 1/2 price single ride tickets but charge the same rate for all users who buy monthly passes?

  22. @Bjorn: While I don’t know about the Oregon statutory requirements, I know the federal requirement only applies to single cash fares, not passes. Where I currently live (Minneapolis, MN), there is no monthly pass for the youth/senior fare. I believe this in part because those fares are non-rush-hour only. A few years ago, Twin Cities Metro started distinguishing the fare for persons with disabilities from the senior fare and made that a 24 hour a day fare, with a corresponding monthly pass. I think this was done at the request of Social Security in order to help persons with disabilities go back to work.

  23. @John Charles Wilson As has been pointed out before, there is substantially more families living in poverty today than there is any seniors these days and the youth fares are necessary if the H ones are.

    One thing that has been discussed on this board before would be family fares which would make it more affordable for families to ride.

  24. @John D.: Please note I *did* suggest that perhaps kids up to about age 11 (up from 6 now) should be allowed to travel free if accompanied by a paid adult fare. Additionally, I support “affiliation programs” through the K-12 school systems similar to those that colleges have.

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