Income-based transportation fare discounts

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Income based transportation fare discounts is the concept of reducing fare pricing for transit users earning an annual income less than the established poverty line. Instead of paying the market rate fare, transit users at or below the poverty line pay a lower, more equitable fare. Discounted fares increase accessibility and mobility for low-income transit users, by providing the opportunity for greater transit usage at a lower cost.


Currently, City Transit Authority charges all transit users the same fares. City Transit Authority experiences a decrease in transit ridership after each fare increase, and over the past decade the total decrease has been significant. The Local Transportation Advocacy Group argues that fare increases reduce ridership among low-income individuals, to whom fewer trips are affordable. After receiving additional government funding, City Transit Authority adopts a policy of income-based transportation fare discounts, in which market rate fare maintains pricing flexibility, while individuals who qualify for the reduced fare program, pay a more affordable rate. As a result, City Transit Authority finds that transit ridership increased, and low-income individuals were more likely to enroll in the transit program than to drive, or use alternate modes (e.g. taxi, paratransit).


Tradeoffs of implementing this policy may include:

  1. Increase in traffic on public transit modes during peak hours
  2. Potential decrease in transportation authority capital gains due to a percentage of ridership going towards reduced fares
  3. Potential spikes in market rate fare to offset capital loss due to reduced fares, if there is a lack of full subsidy from outside funding sources
  4. Limited availability of discounted fare passes, restricted by funding
Compatibility Assessment

The following questions indicate superior conditions under which the policy is more likely to be appropriate:

  1. Does the city, county, state or region have a high low-income population?
  2. Are the transit access points within walking distance of low-income residents or workers?
  3. Are the transit access points located within an urban area?
  4. Does the transportation authority experience a decrease in ridership after fare increases?
Design & Implementation

The following questions should be considered when determining how to implement this policy:

  1. How will eligibility for income-based transportation fare discounts be determined?
  2. How will low-income ridership be measured (i.e., smart cards)?
  3. Under what circumstances would income-based fare discount prices be increased?
  4. How will income-based fare discounts be funded (e.g., federal, state, local)?
  5. Will income-based fare discounts be available during all hours of operation, or only off-peak hours?
  6. How will the policy be advertised to the target market?


  • Has adoption of: Limited. The implementation of income-based transportation fare discounts is limited to the availability of funding to subsidize discounted fares.[1] [2]
  • Notable entities who have implemented or adopted this policy include:
    • Pima County, Arizona – Economy Pass Program[3]
    • Illinois: Cook, DuPage, Kane, Lake, McHenry and Will Counties – Regional Transportation Authority – Ride Free Permits[4]
    • City of Iowa City, Iowa[5]
    • City of Ann Arbor, Michigan – Ann Arbor Area Transportation Authority – Fare Deal Card[6]
    • King County, Washington – ORCA LIFT[7]
    • City of Madison, Wisconsin – Low Income Pass[8]


  • Government Agencies - Transit Authorities. Assumption: Transportation Authorities which lack capital to finance income-based transportation fare discounts are less likely to offer fare discounts, at the risk of further capital loss. [15]
  • Government Agencies - Highways Assumption: The Federal Highway Administration and other government agencies with an emphasis on highways are less likely to compromise on available funding, or transfer highway funding to transit oriented development or policies.[16]


  • Cervero, Robert. "Flat versus differentiated transit pricing: What's a fair fare?." Transportation 10, no. 3 (1981): 211-232. [9]
  • Cervero, Robert. "Transit pricing research." Transportation 17, no. 2 (1990): 117-139. [10]
  • Litman, Todd. "Transportation affordability: evaluation and improvement strategies." (2013). [11]
  • Paulley, Neil, Richard Balcombe, Roger Mackett, Helena Titheridge, John Preston, Mark Wardman, Jeremy Shires, and Peter White. "The demand for public transport: The effects of fares, quality of service, income and car ownership." Transport Policy 13, no. 4 (2006): 295-306. [12]
  • City of Madison, Wisconsin: Final Recommendation to the Madison Common Council [13]
  • Joblinks: How Transportation Providers Are Making Affordable Transportation a Worker Support [14]
  • Litman, Todd. "Evaluating transportation equity." World Transport Policy & Practice 8, no. 2 (2002): 50-65. [15]
  • Sanchez, Thomas W., Rich Stolz, and Jacinta S. Ma. "Moving to equity: Addressing inequitable effects of transportation policies on minorities." (2003). [16]
  • US Department of Transportation: Ensuring Equity in Service and Fare Changes [17]
  3. Economy Pass Program
  4. Ride Free Permits
  6. Fare Deal Card
  8. Low Income Pass
  10. Reflections on Advocacy Planning [[2]]
  11. Community-Based Planning as a Source of Political Change: The Transit Equity Movement of Los Angeles' Bus Riders Union [[3]]
  12. Unaffordable fare: the cost of public transportation for low-income commuters working at three airports [[4]]
  13. How the Poor Afford Public Transportation: the Case of New York City [[5]]
  14. Governmental Subsidies for Public Transit History, Current Issues, and Recent Evidence [[6]]
  15. Transportation Financing Issues [[7]]
  16. Flexible Funding for Transit: Who Uses It? [[8]]

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