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Fare Evasion in Transantiago: An Integrated Approach Mariana Torres-Montoya Transport Research Board January 15, 2014

Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

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Page 1: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Fare Evasion in Transantiago: An Integrated Approach

Mariana Torres-Montoya

Transport Research Board January 15, 2014

Page 2: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

History Control Integrated Solution

Page 3: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Santiago de Chile

• 6.7M people • 17M. daily trips; 2.8 trips / person / day

Mode Shares (million trips/day)

NMT, 6.80, 40%

PT 5.61, 33%

Motorized 4.59, 27%

42%

27%

31%

Bus

Metro

Bus +Metro

PT:

2008 OD Survey

Page 4: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

• 5 lines • 108 stations • 103 km. network • 6.5M trips (2012) • Fare: US$1.2-$1.4 • Institutional

Makeup:

Network: • 11,395 km.; 11,100 stops • 365 routes; 6,400 buses

Fare and Finances: • Flat Fare: US$1.2 • Farebox Recovery Ratio: 60%

Institutional makeup:

Metro Transantiago

Page 5: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

The History

VS.

_ Micros Amarillas TransantiagoFare payment type cash touch-less smart cardsRegulation

Fare rates YES YESQuality oversight NO YES (?)Fare evasion control by driver by inspectors

Fare subsidies NO YESIntegrated fare collection NO YES

Page 6: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Enablers of Evasion

Blatant evasion Low farebox revenues System financially unsustainable Subsidy established Reputational damage 78% disapproval rate (March 2007)

Poor Provision of Service Implementation Constraints

Page 7: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

The Facts

May

-07

Sep

– 07

Jan

– 08

May

– 0

8

Sept

– 0

8

Jan

– 09

May

– 0

9

Sept

– 0

9

Jan

– 10

May

– 1

0

Sept

– 1

0

Jan

– 11

May

– 1

1

Sept

– 1

1

Jan

– 12

Evas

ion

Rate

Monthly Cost of Evasion: ~US$38 million

Source: Transantiago

Page 8: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Contract Renegotiation and Evasion Control

Contract Renegotiations 2012 • Demand Risk transferred to

Private Operators: • Fare evasion provision

incorporated • Operator responsible for fare

evasion control

Evasion Control after 2012 • 1,400 inspectors for on and

off-board monitoring

• Monthly cost to operator: ~US$400,000

• Outcome: Evasion %

Mar-12 22.7%Dec-12 19.9%Mar-13 21.5%Jun-13 19.2%

Km. Travelled Pax./Km. 2005 90% 10%2012 30% 70%

Page 9: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Elements of a Cultural Transformation

• Legal Enforcement

• Economic Incentives

• Effective Communication

• Service Provision Improvements

Page 10: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Improving Service Provision • Facilitate off-board fare

card charging

• Facilitate on-board and off-board payment

• Expand remote payment options

• Implement a fare increase strategy

$420 $420 $460

$580 $640 $660

$380 $380 $400 $500

$560 $580

$350

$450

$550

$650

$750

2007 2008 2009 2010 2011 2012

CLP

Tariff Increases 2007-2012

Metro Transantiago

Page 11: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

A Change in the Collective Psyche

A change in citizen behavior (Bogotá, CO):

• Goal: Evader feels shame, fear of social rejection, and desirability of recognition.

Page 12: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Economic Incentives

Offer Multiple Fare Tickets • Weekly/Monthly with Unlimited rides • Marginal discounts on per-trip fare Offers greater convenience and savings incentive Potential downsides

Develop Loyalty / Frequent Commuter Programs Incentives for payment Personalized cards facilitates evasion control

Page 13: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Legal Enforcement

Allow qualified inspectors to perform identity checks

TFL Inspectors get capacity training from the transit police. Personalized Oyster cards facilitate inspection.

Melbourne mails citations to home address

Raise profile of fare evasion as offense.

MBTA links evasion to driver license renewal

Embargo on private property, notifies Banks

Link fare evasion citations to legal sanctions

Association of fare evasion to possession of weapons, drugs, criminal records

Translink, IE

Page 14: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Effective Communication

Educate Users

Dissuade Evaders

Page 15: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Effective Communication

Communicate system improvements • Higher frequencies • Fewer transfers • New buses

Adopt practices from:

NYC MTA

Page 16: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Implementation and Conclusions

• Staged approach for implementation: A Mix

• History matters!

• More than a contractual reform is needed

• Truly integrated solution with aligned incentives and informed by best practices

Page 17: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Questions?

Melbourne, AU

Page 18: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Appendix

Page 19: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Contracts

Ámbito Contratos actuales Nuevos contratos Derecho de uso de las vías

•Exclusivo y rígido. •Establece fuertes restricciones geográficas. •No reconoce posibilidad de acuerdos entre operadores.

•Preferente (no exclusivo pero con límites). •Reconoce necesidad de modificación y mejora continua. •Reconoce posibilidad de acuerdos entre operadores.

Mecanismo de pago

•Fuerte componente de pago fijo (~80% en Troncales).

•Pago por servicios efectivamente prestados (pasajeros transportados y kilómetros recorridos).

Control de los riesgos financieros

•Demanda referencial asegurada. •Mecanismos de ajuste de ingresos. •Compensaciones por pérdida de demanda.

•Mecanismo de ajuste de ingresos de acuerdo a Índice Pasajeros/Kilómetro (IPK). •Instancias periódicas de revisión de precio como en las empresas reguladas.

Flota •Definición cerrada del tipo de vehículos. •Restricciones a la modalidad de tenencia (propiedad de los buses).

•No se restringe el tipo de vehículo, el operador debe definirlo conforme se requiera para cumplir con el estándar de calidad, de acuerdo con las características de la demanda. •No se restringe la modalidad de tenencia (propiedad, arriendo, leasing).

Ámbito Contratos actuales Nuevos contratos Calidad •No está considerada como un

objetivo en sí mismo. Se definen los procesos más que los resultados deseados.

•Todo el contrato se estructura en base a la búsqueda de la calidad definida; el operador responsable de alcanzar el nivel de calidad esperado. •Reconoce la importancia de contar con inteligencia del negocio para el correcto diseño de la oferta y la adecuada gestión de los servicios de transporte.

Indicadores de cumplimiento

•Enfocados al control exhaustivo de la oferta y no necesariamente en alcanzar buenos niveles de servicio. •ICPKH afecta a todo el ingreso del operador. •Descuentos causan deterioro de las empresas y del servicio.

•Enfocados a resguardar la calidad y la experiencia de los usuarios. Buscan prevenir los incumplimientos sistemáticos más que episodios aislados. •Contempla incentivos para revertir las deficiencias. •ICT afecta sólo al pago de los kilómetros. •Descuentos acotados para prevenir deterioro de las empresas, reconociendo el principio de proporcionalidad en la potestad sancionadora del Estado.

Page 20: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Contracts

Ámbito Contratos actuales Nuevos contratos Calidad •No está considerada como un

objetivo en sí mismo. Se definen los procesos más que los resultados deseados.

•Todo el contrato se estructura en base a la búsqueda de la calidad definida; el operador responsable de alcanzar el nivel de calidad esperado. •Reconoce la importancia de contar con inteligencia del negocio para el correcto diseño de la oferta y la adecuada gestión de los servicios de transporte.

Indicadores de cumplimiento

•Enfocados al control exhaustivo de la oferta y no necesariamente en alcanzar buenos niveles de servicio. •ICPKH afecta a todo el ingreso del operador. •Descuentos causan deterioro de las empresas y del servicio.

•Enfocados a resguardar la calidad y la experiencia de los usuarios. Buscan prevenir los incumplimientos sistemáticos más que episodios aislados. •Contempla incentivos para revertir las deficiencias. •ICT afecta sólo al pago de los kilómetros. •Descuentos acotados para prevenir deterioro de las empresas, reconociendo el principio de proporcionalidad en la potestad sancionadora del Estado.

Page 21: Fare Evasion in Transantiago: An Integrated Approach · Evasion Control Contract Renegotiations 2012 • Demand Risk transferred to Private Operators: • Fare evasion provision incorporated

Evader Profiles

Involuntary Uninhibited Opportunistic Thrifty