1. FARE STUDY ECOPASS Board of Directors Study Session August 25, 2015

2. Background: Existing Pass Programs and Study Schedule 2

3. Existing Pass Programs 3 Employer Pass Programs –EcoPass (all-in, “insurance model”) –FlexPass (opt-in) Community Pass Programs –CollegePass (all-in) –Neighborhood EcoPass (all-in) Non-Profit Agency Reduced Fare Program –RTD sells discounted fare products to non- profit agencies to distribute to low-income individuals –Passengers get free or reduced fares

4. Why Pass Programs? Increase ridership Promote ridership among “specialized” populations; potentially increases future ridership (college students become regular riders) Promote the RTD brand and establish customer loyalty Provide revenue certainty with upfront payments Reduce the cost of fare collection Improve efficiency of vehicle boarding Add convenience for passengers Promote relationships with local governments and businesses 4

5. Pass Program Study Schedule Aug 25 (Study Session) –Discussion about EcoPass August 27 –Stakeholder meeting Sept 8 (Ops Committee) –Report on stakeholder feedback –Present EcoPass recommendation to the Board Sept 15 (Full Board Meeting) –Board action on EcoPass Sept/Oct: EcoPass contracts to participants October: Target for non-profit / low-income recommendations 5

6. Current EcoPass Pricing 6

7. Current Business EcoPass Pricing Matrix 7

8. Business EcoPass Service Level Areas Map showing Service Level Areas A, B and C near Downtown Denver SLA B was expanded to include West Rail Line in 2013 SLA B will be expanded again to include the 2016 rail lines Example SLA Map for Downtown 8

9. Current Policy for EcoPass Utilization Pricing 2009 Board adopted policy –No changes to EcoPass pricing until smart card ridership data are available or there is a general RTD fare increase –Continued use of a matrix with employer size and service area to determine Business EcoPass contract prices –Prices will be based on the value of all trips within a matrix category with a 40 percent discount once data are available (not yet implemented) –No company contract should increase by more than 10 percent unless there is a general fare increase (for the first two years) –Revisit approach after three years of pricing based on smart card data 9

10. Current Thinking for Modifying EcoPass Pricing 10

11. Current Thinking on Discount Level 40 percent discount was based on the following: –Monthly pass: 20 percent discount –ValuPass: 8.3 percent discount –Pre-tax benefit (FlexPass): 5 percent discount –Quantity discount (>200/mo FlexPass): 5 percent discount –Induced demand from all-in program: 1.7 percent Current staff thinking: Change 40 percent discount to a 30 percent discount –Monthly pass discount decreased with the new fare policies –Discounts should be compounded not added 11

12. Detail for 30 Percent Discount Current Fare Structure Discount Levels Discount Example ($100 Pass) Corrected Calculation (Compounding) Monthly Pass20%$8020% ValuPass8.3%$73.3626% FlexPass PreTax5%$69.6930% FlexPass Quantity5%$66.2134% Induced Demand1.7%$65.0835% Total Discount40%$34.9235 % 2016 Fare Structure Discount Levels Discount Example ($100 Pass) Corrected Calculation (Compounding) Monthly Pass15%$8515% ValuPass8.3%$77.9522% FlexPass PreTax5%$74.0526% FlexPass Quantity5%$70.3530% Induced Demand1.7%$69.1531% Total Discount35%$30.8531% Round to a 30% Discount 12

13. Current Thinking for 2016 Business EcoPass Contracts Increase Business EcoPass contracts by 18.3 percent –Apply 13.3 percent increase due to the new fare structure (general fare increase factored by ridership) –Apply additional 4.4 percent increase based on average fare analysis (survey data) that suggests Business EcoPass is currently underpriced (incorporates 30 percent discount) Eliminate $2.50 upgrade charge to DIA –Include Airport trips on EcoPass consistent with other Regional passes that include trips to DIA 13

14. Detail for 13.3 Percent Increase Applying the current policy, EcoPass contracts would increase at the rate of the general fare increase factored by ridership Proportion of Boardings Fare Increase % Local79.6%15.6% Express13.3%12.5% Regional7.1%-10.0% Weighted Average13.3% 14

15. Detail for 4.4 Percent Increase Determined undiscounted average fare for EcoPass riders based on EcoPass ridership data from 2011 Customer Survey Applying 30 percent discount results in a target average fare of $2.38 per trip for EcoPass riders –CH2M analysis showed an average fare of $2.28 for EcoPass riders (4.4 increase to get to the $2.38 target) Proportion of EcoPass Riders FareWeighted Fare Local50.3%$2.25$1.13 Express22.2%$4.00$0.89 Regional / SkyRide27.5%$5.00$1.38 Weighted Average Fare$3.39 15

16. EcoPass Pricing Matrix with 18.3 Percent Increase 16

17. Detail for Upgrade Charge to DIA 2014 data were used to estimate that the revenue generated from the $2.50 upgrade was approximately $85,000 –Approximately 34,000 trips Administrative costs associated with $2.50 upgrade –Separate smart cards are required for DIA EcoPasses Logistical challenges with train service to DIA Confusion for customers All other Regional passes will be valid for travel to DIA including Day Passes 17

18. Current Thinking for 2016 Neighborhood EcoPass Contracts Increase Neighborhood EcoPass contracts by 14.4 percent –Apply 13.3 percent increase from the new fare structure (general fare increase factored by ridership) –Apply additional 1 percent increase based on average fare analysis (survey data) that suggests Neighborhood EcoPass is currently underpriced (incorporates 30 percent discount) Eliminate $2.50 upgrade charge to DIA –Include Airport trips on EcoPass consistent with other Regional passes that include trips to DIA 18

19. Revenue Impact 13.3 percent increase was included as an assumption in the revenue modeling for the structure and level analysis –Minimum amount of increase needed to achieve SBP fare revenue targets Additional increase in EcoPass contracts would result in approximately $1 million of additional fare revenue per year 19

20. Next Steps 20

21. September Actions Discuss current thinking with stakeholders at the Local Government Meeting Incorporate feedback from stakeholders to develop a final recommendation for 2016 EcoPass contracts to be presented at the September Operations Committee and Board Meeting 21