Farebox recovery ratio
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The farebox recovery ratio (also called fare recovery ratio) of a passenger transportation system is the fraction of operating expenses which are met by the fares paid by passengers. It is computed by dividing the system's total fare revenue by its total operating expenses.
There are two schools of thought in fare collections: a simple, flat rate fare structure (pay a fixed fare regardless of time of day and/or travel distance) or a complex, variable rate fare structure (pay a variable fare depending on time of day and/or travel distance).
In North America, South America, and Africa, the majority of the cities use simple, flat rate fare structures due to budgetary constraints. With the majority of North America, most of South America, and almost all of Africa being heavily reliant on the automobile for both short and long distance travel, majority of the transit budgets are allocated toward construction and maintenance of freeways and roads, with very little funding making way to investments in new mass transit technologies. Inadvertently however, the reliance on simpler fare structures due to their cheaper costs ends up increasing the tax burden on the agencies as flat rate fare structures have lower farebox recovery ratios, placing more pressure to the transit agencies to increase taxes, pursue higher fare hikes, or to cut services to maintain the transit system.
In sharp contrast, majority of the cities in Europe and Asia are heavily dependent on mass transit. Therefore, the majority of their transit budgets are used extensively on mass transit technologies, which enables these countries to install and maintain self-supporting and profitable variable pricing structures. Transit agencies that have instituted a more variable fare structure depending on distances or zones traveled have higher farebox ratios over those that rely on a flat-rate model. In addition, recent urban transit scholars agree that variable pricing methods on public transit would actually be a profitable business which can alleviate many municipal agencies' budget problems. For example, transit riders will be discouraged to travel longer distance due to increasing price as one travels further, reducing human congestion of mass transit riders who ride lengthier trips. On the other hand, an increased number of riders will opt to frequently use the transit system for multiple short and quick hop-on and hop-off trips as prices would be cheaper for shorter trips, which mass transit is better suited for. The downside however is that institution of variable-rate fares requires a high value initial investment in fare ticketing technologies such as the use of contactless smart cards, turnstiles or fare gates, automated ticket machines, as well as the IT infrastructure in which the return on investment may take years depending on the expected transit ridership volumes.
Variable vs. fixed fare models
||This section possibly contains original research. (July 2012)|
|Agenda||Variable fare model||Fixed fare model|
|FBR ratio with high ridership figures||100%+||50%+|
|FBR ratio with low ridership figures||60%+||9%+|
|Most common system used||Post-pay; fares are paid at the destination or upon disembarking at the end of each trip||Pre-pay; fares are paid at the start of each trip|
|Unlimited ride passes||Uncommon, but usually available for tourists||Daily, weekly, or monthly unlimited ride passes|
|Incentives over cash||Cheaper rates may be provided when using paperless contactless passes loaded with cash value||Unlimited ride passes|
|Concessions||Discounted variable rates for seniors, youths, disabled, or other groups as needed||Discounted fixed rates for seniors, youths, disabled, or other groups as needed|
|Implementation costs||Expensive, as both entry and exit points have to be accounted for to calculate variable fares. Fare-adjustment and change machines need to be installed.||Cheap, as fare is collected at entry only. Since each rider is expected to have exact change, no fare-adjustment or change machines are needed.|
|Reliance on subsidies||Less dependent, as each rider pays their share of distance traveled equally||Heavily dependent, as fixed fares do not cover operational costs without regard to how each rider contributed to their distance traveled|
|Benefits||Fairer fare structure; cheaper for shorter riders, more for longer rides. Entry and exit processes can also be used for data collection to efficiently manage how transit riders travel, allowing transit agencies to coordinate transfer times, reduce or increase transit needs based on hard ridership data.||Simplicity; everyone pays the same price regardless of distance traveled.|
|Risks||Confusing for first-time riders. Knowledge of the system requires an "acquired" skill||Prone to higher rates and service cuts depending on subsidies received|
Farebox ratios around the world
The following table lists farebox ratios for some public transportation systems around the world.
|Continent||Country||System||Ratio||Fare system||Fare rate||Annual ridership||Year|
|Asia||Hong Kong, China||Hong Kong (MTR)||186%||Distance based||HKD 3.50+ (cash)
HKD 3.50+ (Octopus card)
|Asia||Japan||Osaka (Hankyu Railway)||123%||Distance based||JPY 150+||1991|
|Asia||Japan||Osaka (OMTB)||137%||Distance based||JPY 200+||1991|
|Asia||Taiwan||Taipei (MRT)||119%||Distance based||TWD 20+ (cash)
TWD 16+ (EasyCard)
|Asia||Japan||Tokyo Metro||170%||Distance based||JPY 160+||1991|
|Asia||Singapore||Singapore (SMRT)||125%||Distance based||SGD 1.10+ (cash)
SGD 0.73+ (EZ-Link Card)
|Asia||China||Beijing Subway||59.5%||Flat rate||CNY 2.00||2460 million||2012|
|Europe||Germany||Berlin||70.3%||Zone based||EUR 2.60+||2010|
|Europe||UK||London Underground||91%||Zone based||2012|
|Europe||Spain||Ferrocarrils de la Generalitat de Catalunya (FGC)||90.49%||Zone Based||75,5 million||2013|
|Europe||Czech Republic||Prague (DPP)||53.2%||Flat rate||CZK 24+||1232 million||2013|
|Europe||France||Paris (STIF)||30.4%||Zone based for passes
Distance based for tickets
|Europe||Sweden||Stockholm||37%||Zone based||SEK 44–88 (conductor)
SEK 25–50 (SL Access card)
Note: Tickets are not sold on buses.
|Europe||Austria||Vienna||50%||Flat rate||EUR 2.00||1991|
|Europe||Finland||Helsinki||49%||Zone based; each borough forms a zone. Boroughs with a small area are treated as being part of one of their neighbouring boroughs.||EUR 2.80–7.00 (cash)
EUR 1.90–5.60 (travel card)
Transfer free of charge
|336 million (boardings, one trip can include more than one boarding)||2011|
|North America||USA||Amtrak||71%||Distance & demand based||2009|
|North America||USA||Atlanta (MARTA)||31.8%||Flat rate||USD 2.50||2012|
|North America||USA||Austin (CMTA)||12.4%||Flat rate||USD 1.00-2.75, depending on modality||2012|
|North America||Canada||Brampton (BT)||46%||Flat rate||CAD 3.25 (cash)
CAD 2.65 (Presto Card)
|North America||USA||Boston (MBTA)||43.7%||Flat rate||USD 2.50 (cash) / USD 2.00 (CharlieCard)||2002|
|North America||Canada||Calgary||50%||Flat rate||CAD 3.00||2011|
|North America||USA||Chicago (CTA)||43.0%||Flat rate||USD 2.25 (cash)
USD 2.00 (ChicagoCard)
|North America||USA||Chicago (Metra)||55%||Distance based||USD 2.75+||2012|
|North America||USA||Cleveland (GCRTA)||21.5%||Flat rate||USD 2.25||2002|
|North America||USA||Dallas (DART)||13.7%||Flat rate||USD 1.75||2012|
|North America||USA||Detroit (DDOT)||13.9%||Flat rate||USD 1.50||2002|
|North America||Canada||Edmonton (ETS)||39.4%||Flat rate||USD 3.00||2007|
|North America||USA||Harrisburg, PA (CAT)||35.0%||Flat rate||USD 1.75||2005|
|North America||USA||Las Vegas Monorail||56.0%||Flat rate||USD 5.00||2006|
|North America||USA||Long Island (MTA)||50.0%||Zone based||USD 5.00+||2012|
|North America||USA||Los Angeles (LACMTA)||30.6%||Flat Rate||USD 1.50||2004|
|North America||USA||Maryland||23.1%||Variable||USD 1.60-11, depending on distance & modality||2012|
|North America||USA||Minneapolis - St. Paul||31.4%||Flat rate with rush hour and express surcharges||USD 1.75 to USD 3.00||81 million||2008|
|North America||Canada||Mississauga (MiWay)||46%||Flat rate||CAD 3.25||2011|
|North America||Canada||Montreal (STM)||57.1%||Flat rate||CAD 3.00||2006|
|North America||USA||New York City (MTA)||51.2%||Flat rate||USD 2.25||2013|
|North America||USA||New York/Connecticut (MTA)||36.2%||Distance based||USD 2.25+||2009 Q1|
|North America||USA||New York/New Jersey (PATH)||41.0%||Flat rate||USD 2.00||2002|
|North America||USA||New Jersey (NJT)||56%||Distance based||USD 2.25||2001|
|North America||USA||Orlando (Lynx)||25.7%||Flat rate||USD 2.00||29.2 million||2012|
|North America||Canada||Ottawa (OC Transpo)||52%||Flat rate||CAD 3.30 (Cash)
CAD 2.60 (Tickets/Presto Card)
|North America||USA||Philadelphia (SEPTA)||40.7%||Flat rate||USD 2.00 (cash) / USD 1.55 (Token) / USD 1.00 (Transfer)||2013|
|North America||USA||Pierce County, WA||13.0%||Flat rate||USD 2.00||2009|
|North America||USA||Philadelphia/New Jersey (PATCO)||66.2%||Distance based||USD 1.40+||2012|
|North America||USA||Portland Metro Area (TriMet)||22%||Flat rate||USD 2.50||2010
|North America||USA||Greater Seattle Area (King County Metro)||29.1%||Zone and peak based||USD 2.25+||2013|
|North America||USA||Puget Sound Region (Sound Transit)||22.2%||Zone & distance based||USD 1.50+||2007|
|North America||Canada||Quebec City (RTC)||39%||Flat rate||CAD 3.00||2011|
|North America||USA||San Antonio (VIA)||12.8%||Flat rate||USD 1.20||46.7 million||2012|
|North America||USA||San Diego MTS||40%||Flat rate||USD 2.50||34.5 million||2012|
|North America||USA||San Francisco Bay Area (BART)||64.5%||Distance based||USD 1.75+||2008|
|North America||USA||San Francisco Bay Area (Caltrain)||51.3%||Zone based||USD 2.75+||2011|
|North America||USA||Staten Island (MTA)||15.2%||Flat rate||USD 2.25||2002|
|North America||Canada||Toronto (TTC)||73%||Flat rate||CAD 3.00||2013|
|North America||Canada||Toronto, Hamilton and area (GO Transit)||78.2%||Distance based||CAD 4.68+||2013|
|North America||Canada||Vancouver (TransLink)||51.9%||Zone based||CAD 2.50+||2010|
|North America||USA||Washington, DC (WMATA)||62.1%||Distance based||USD 1.95+||2010|
|North America||Canada||Winnipeg||60%||Flat rate||CAD 2.50||2011|
|Oceania||New Zealand||Auckland||44%||Zone Based||69 Million||2012/13|
|Oceania||Australia||Canberra||21%||Flat rate||AUD 4.20||2007|
|Oceania||New Zealand||Christchurch||35%||Zone Based||13.5 Million||2012/13|
|Oceania||New Zealand||Dunedin||54%||Zone Based||2.9 Million||2012/13|
|Oceania||New Zealand||Hamilton||34%||Flat rate||5 Million||2012/13|
|Oceania||New Zealand||Wellington||57%||Zone Based||35 Million||2012/13|
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