Columbus is testing half-price rates for low-income customers
February 03, 2022
by Christopher Carey
The Central Ohio Transit Authority (COTA) has approved a six-month pilot project to extend half-price transit discounts to lower-income Columbus customers.
The scheme – which starts on March 1 – will allow those eligible for public income support to benefit from 50% reductions thanks to the authority’s new account-based digital tariff management system.
COTA will collect and analyze data during the pilot before presenting recommendations to the board of directors for a finalized rate structure for low-income earners.
The authority predicts a 33% increase in ridership among participating eligible low-income customers, but also expects a subsequent loss of revenue.
“As part of our assessment [for the pilot] we looked at our pre-COVID numbers and found that if previous ridership and fare levels were to be in place, [the pilot] would like [result in] a loss of revenue of $1.3 million per year for COTA,” said Angel Mumma, CFO of COTA. cities today.
“But because we are far from having pre-COVID ridership, I think it will take us a few years to fully recognize this loss of revenue.”
Mission on margin
COTA received more than US$100 million in COVID-19 relief funding from the federal government, which Mumma said was a contributing factor in introducing the program.
“Really it’s a mission on the fringe – we have to do the right thing for the community and it’s not appropriate for us to have a significant amount of savings in the bank and just sit on these funds that we received from the federal government and not use them with a program like this.
“In my mind, that’s irresponsible, and I say that as CFO. Our role is to provide service to the community and to serve it in a fiscally responsible way.
“I think we have to balance the two – we’re not a bank that sits on a lot of money and cuts our services just so we can build up that stock.”
She added: “Having said that, we need to be mindful of our financial viability, and there will be a time in the next couple of years when we have to make tough decisions – but right now we have the capacity to do so. »
Digital tariff system
Eligible customers can apply for reduced rates at COTA’s Customer Experience Center in downtown Columbus, where they will be required to provide documentation proving enrollment in one of five low-income assistance programs.
Some groups in the area already qualify for reduced rates, including children, seniors, veterans and eligible customers with disabilities, and the authority hopes the new structure will serve to bolster fairness.
Last November, a new digital tariff system was introduced, which caps all tariffs at $4.50 per day or $62 per month when customers use a smartphone app or smart card.
Those paying cash on board don’t benefit from the caps — or the new 50% discount — but can access and credit smart cards at a number of service locations across Columbus.