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Innovations in Fare and Marketing Strategies

Innovations in Fare and Marketing Strategies. Transportation-Land Use-Environment Connection: Redefining, Reevaluating and Reinventing Transit. Lake Arrowhead, CA October 15, 2001. Daniel Fleishman Multisystems, Inc. Broader Context for Fare Policy and Marketing.

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Innovations in Fare and Marketing Strategies

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  1. Innovations in Fare and Marketing Strategies Transportation-Land Use-Environment Connection: Redefining, Reevaluating and Reinventing Transit Lake Arrowhead, CA October 15, 2001 Daniel Fleishman Multisystems, Inc.

  2. Broader Context for Fare Policy and Marketing • Increase in environmental justice concerns • Changing markets, new initiatives • New opportunities for partnerships • Focus on seamless regional travel • Market-based strategies • Electronic fare media facilitate new initiatives and strategies

  3. Equity Concerns • Fare decision-making increasingly influenced by political/legal factors • Concern re equal treatment of all groups • Organized opposition or legal action against proposed fare increases • Can define/limit fare structure changes • Consent Decree in LA • Very deep discount in Philadelphia • Free transfers, weekly pass in Boston

  4. Emerging Technologies Facilitate New Strategies • Electronic media seeing increased use • Magnetic farecards (e.g., NYC, Chicago) • Smart cards (e.g., Washington, Ventura Co.) • Electronic media facilitate new initiatives • Subsidy arrangements • Multiple application opportunities • Regional farecard programs • New payment options • Impact on fare policy

  5. Partnership Opportunities • Fare/subsidy arrangements • Social service agencies • Universities • Employers • Multiple application programs • Other modes • Non-transportation programs

  6. Fare/Subsidy Arrangements • Social service programs • Access-to-jobs programs • EBT/transit arrangements • University programs • U-Pass programs • Reduced/free fares for students • Employer subsidy programs • Distribution of transit benefit • Annual pass programs (e.g., Eco Pass) • Voucher programs

  7. Multiple Application Programs • Transit and other modes • Parking • Toll • Transit and non-transportation applications • Financial institutions/banks -- joint e-purse, add value at ATM • Joint transit-university card • Joint transit-retail loyalty programs

  8. Focus on Seamless Travel • Travel patterns increasingly require use of multiple modes or agencies • Growing emphasis on multi-agency agreements and regional payment integration

  9. Regional Payment Integration • Can involve common fare structure (e.g., regional pass, free or reduced transfers) • Farecard can carry stored value and be flash pass for other services • Regional farecard permits each agency to retain own fare structure, with common stored value

  10. Market-Based Fare Strategies • Segment the market based on frequency of use and willingness to prepay • Offer range of payment options • Unlimited ride passes (one-, two-, four-week) • Discounted multi-ride options (tokens, tickets, stored value farecards) • Short-term passes (4-hr, 1-day, 3-day) • Special passes/tickets (e.g., family pass)

  11. Increased Flexibility with Electronic Payment • Stored value -- various forms of bonus/discount • Purchase bonus • Add-value bonus • Rolling passes • 7-day, 14-day, 31-day -- activate on first use • partial day or 1-day -- sold on board

  12. Increased Flexibility with Electronic Payment (cont.) • Automated fare differentials • Distance-based/zonal • Time-based (e.g., peak/off-peak) • Automated transfer discounts • Between modes • Between agencies

  13. Emerging Electronic Payment Options/Features • Frequency-based discounts • Guaranteed lowest fare • Guaranteed last ride/negative balance • Autoload features • Automated download of benefits • Post payment

  14. Marketing Strategies • Marketing based on level of prepayment and discounts • “Choose how much you want to save.” • “How you save money is your choice.”

  15. Marketing Strategies (cont.) • Marketing based on range of options targeted to different market segments and travel needs • Special payment options for visitors (e.g., weekend or family passes) • Tie-ins with tourist attractions

  16. Summary • Agencies facing growing demands and opportunities that affect fare structures • Agencies entering new types of partnerships • Electronic technologies facilitate new initiatives and flexible new payment options • Agencies introducing market-oriented pricing strategies based on range of payment methods • Marketing is reflecting range of options and emerging markets

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