1. Eco Pass Program Evaluation Update SVLG Transportation Policy Committee October 2012 1

2. Eco Pass Program Evaluation Evaluation of program’s effectiveness First major evaluation of program since inception Revisit policy objectives of Eco Pass Program Pressure on transit agencies to achieve efficiencies Clipper introduction provides opportunity Opportunity to work with subscribers and future subscribers 2

3. 3 Alternatives Analysis Policy & Citizen Input Peer & Literature Review Stakeholders Surveys Policy & Goals Development Operations and Ridership Alternatives Development Program Implementation 3

4. Eco Pass Program Goals and Objectives Goals Attract and retain riders, increase ridership Revenue neutral – Board-adopted policy of average adult fare, currently $1.53 Objectives Ensure program is easy to administer and program rules are understandable and understood Generate data to understand ridership, usage rates, and value Minimize opportunities for fraud and abuse Leverage technology to minimize fraud and abuse and to collect ridership and usage data Provide a program with strong branding Provide fairness, equity among participating organizations/individuals 4

5. Data Collection Peer and Literature Review - 9 programs interviewed, employer-based - Other program types: college/university (>60), housing (2+), and student (2) - Themes: capacity, revenue generation, TDM programs, pricing Surveys - VTA & Employer-based surveys (19,000 completed surveys) - Usage rates vary dramatically between different types of organizations - Survey data reconciled with ridership tabulations for a “reality check ” Ridership - Eco Pass boardings tabulated on bus system - Fare checkers tabulated Light Rail boardings over 5-week period (15,569 passengers) Revenue information - Revenue data from 2000 to today examined - Steady decline in revenue per Eco pass boarding since 2000 Eco Pass makes up a total of 16% of all VTA fare payment * 13% of all bus boardings * 26% of all Light Rail boardings Current revenue per Eco Pass boarding: $0.67

6. 6 Eco Pass Utilization by Route 6 Line 23: 9,773 daily boardings, 21% Eco Pass Line 22: 14,376 daily boardings, 11% Eco Pass Express Buses: 1,645 daily boardings, 47% Eco Pass (May 2012)

7. 7 Program NOT meeting revenue goal Board-adopted Revenue Goal of Average Adult Fare ($1.53) Current Eco Pass revenue per boarding is $0.55 In 2011, Eco Pass was 16% of all VTA ridership, but only 8% of total revenue

8. 8 ECO PASS ALTERNATIVES #1 Status Quo  No market distinctions  Pass for every member  Maintain current pricing strategy #2 Modified Status Quo  Introduce market distinctions  Retain pass for every member  Restructure price matrix; Prices changes regularly to reflect usage; changes phased to achieve revenue goals #3 Usage Based  Introduce market distinctions  Retain pass for every member  Annual fees unique to each organization; See fees based on previous year’s usage NON ECO PASS ALTERNATIVES #4 Discounted Bulk Sales  Customizable; organizations may purchase different numbers, product combinations  All members eligible, but not required to participate  Future pricing based on actual use #5 Clipper Direct  Customizable; members not required to participate  Eliminates deep discounting  Pricing determined by products employee chooses to buy 8Alternatives

9. 9 1.Reduce Number of Participant Size Categories from 4 to 3. Eliminates category for organization of 15,000 or more. 2.Reduce Location Categories from 3 to 2. Within ¼ mile from Rapid service; outside of ¼ mile from Rapid service (Light Rail, BRT, Express Bus). 3.Stepping. Eliminates loophole in pricing that unfairly provided a discount and encouraged abuse in reporting. 4.Market-based Pricing. Employer, residential, and college/university programs are priced separately, based on usage. 5.Transition to Clipper. Should occur over the next 3 years. Addresses lack of data and prevents fraud associated with stickers. 6.Incremental Price Increases. Price increases are capped at 15% per year until the existing subscriber reaches the target price. New subscribers pay the target price. 7.Diversify Pass Offerings. VTA will offer a range of transit pass products including Clipper Direct, Monthly Subscription, Eco Pass and the new Eco Pass Lite bulk discount annual passes. 8.Re-evaluation after 4 years. Pricing matrix and program revisions will be revised in 4 years, allowing Clipper to gain wide spread use, benefitting from resulting data. Recommendation: Modified Status Quo Recommendation focuses on eight main program areas for modification

10. 10 Reduce # of Participant Size Categories from 4 to 3: 1 to 99; 100 to 2,999; 3,000+. Existing 15,000+ category dropped. Recommendation: Organizations by Category Location Size: 1 to 99 Size: 100 to 2,999 Size: 3,000 to 14,999 Size: 15,000+ Downtown San Jose 0001 ≤ ¼ mile of light rail 1000 > ¼ mile from light rail 0401 Location Size: 1 to 99 Size: 100 to 2,999 Size: 3,000 to 14,999 Size: 15,000+ Downtown San Jose6300 ≤ ¼ mile of light rail17861 > ¼ mile from light rail161801 Location Size: 1 to 99 Size: 100 to 2,999 Size: 3,000 to 14,999 Size: 15,000+ Downtown San Jose0100 ≤ ¼ mile of light rail2500 > ¼ mile from light rail10900 Employers Residential Colleges/Universities

11. 11 Reduce Location Categories from 3 to 2: Within ¼ mile from Rapid service; outside of ¼ mile from Rapid service. Rapid service is defined as light rail, BRT, and Express services. Existing Downtown San Jose category dropped. 11 Recommendation: Location

12. 12 Stepping : Each organization would pay the price per employee from the first step for its first 99 employees, then the per employee price from the second step for employees 100-2,999, etc. Recommendation: Stepping Total Cost Number of employees Existing PricingStepped Pricing

13. 13 Current1-99 100- 2,999 3,000- 14,999 15,000+ Downtown San Jose $144$108$72$36 ≤ ¼ mile of light rail $108$72$36$18  ¼ mile of light rail $72$36$18$9 13 Residential1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $240$180$120  ¼ mile of rapid service $200$150$100 University1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $108$76$54  ¼ mile of rapid service $85$65$45 Employer1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $144$84$44  ¼ mile of rapid service $72$48$30 Recommendation: Price Matrix Changes Pricing based on new categories and usage: Adopt changes to fees based on different usage rates among the 3 distinct categories of Eco Pass subscribers.

14. 14 Colleges/Universities and Affordable Housing -- prioritize ridership over revenue? Offer the same discount as Youth pass: 36% (based on monthly pass cost of $45 instead of $70 for Adults) Results in a $1.2M (12%) reduction in total revenue Alternative Price Matrix Proposal Residential1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $240$180$210  ¼ mile of rapid service $200$150$100 University1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $108$76$54  ¼ of rapid service $85$65$45 University1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $69$49$35  ¼ of rapid service $55$41$29 Residential1-99 100- 2,999 3,000+ ≤ ¼ mile of rapid service $154$115$91  ¼ mile of rapid service $128$96$64 Proposed PricingProposed Alternate Pricing

15. 15 Transition to Clipper: Within 3 years all Eco Pass subscribers will be transitioned to Clipper cards with an identifying photo ID. This will reduce fraud and allow VTA and Eco Pass administrators to track usage data. Recommendation: Clipper Transition and Incremental Price Increase 15 Cap price increase at 15% per year: While some subscribers may face an increase of over 100%, others will have no increase at all. Cap price increases at 15% per year to allow predictability and adverse impacts. 22 subscribers will see no change to their fees 38 subscribers will take 7 years or longer to meet new price point 49 subscribers will reach the new price point within 6 years

16. 16 Recommendation: Diversify Discount Pass Offerings Offer a range of transit products to meet the needs of all organizations / populations: Clipper Direct, annual subscription, monthly pass, Eco Pass and Eco Pass Lite liteecpassecpass

17. 17 Recommendation: Reevaluation in Year 4 Implementation : The implementation strategy is designed to introduce changes gradually and collect data through Clipper usage. After 4 years, the program will be reevaluated. 2013 Adopt Eco Pass program modifications Implement program changes in Fall 2013 2014 – 2016 15% maximum annual price increase Develop new marketing materials, new subscribers subject to new charges 2016/2017 Reevaluation of program pricing and modifications, using available data from widespread Clipper utilization Review pricing and other modifications, consider changes to program

18. 18 Eco Pass Revenue Expectations Year 0Year 1Year 2Year 3Year 4 Board-Adopted Policy of Average Adult Fare $3.9M$4.4M$5.1M$5.7M$6.2M Adopt new revenue policy for colleges/universities and affordable housing $3.9M$4.3M$4.7M$5.1M$5.6M Status quo $3.9M

19. 19 Boardings vs. Revenue (from Eco Pass organizations)

20. 20 Title VI Analysis Subscriber outreach January 1, 2014 – Phase 1 of implementation (with incremental increases as appropriate) 2016/2017 – next evaluation (for CY 2018 implementation) Based on improved data collected through Clipper implementation or annual survey Next Steps 20

21. 21 END

22. 22Schedule 201220132014 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Tasks 1-6 Existing Conditions Task 7 Alternatives Development Task 8 Alternatives Assessment Task 9 Implementation Task Force Meetings Title VI and Other Stakeholders input VTA Committees and Board Implement proposed changes