The LIRR’s fare payment system has not changed much over the course of its 184-year history. You buy a ticket, get on the train, then a conductor comes around and inspects your ticket. While there has been some evolution in ticket sales channels (ticket sellers at station windows have generally faded and given way to ticket vending machines and even mobile ticketing in recent years), the ticket stock, and, yes, the ticket prices, the actual process of collecting fares works today very much the same as it did almost two centuries ago.
The LIRR’s antiquated fare collection system also presents one of the biggest obstacles to better service, especially during the off-peak period. Outside of the rush hour, the marginal cost for running extra trains is driven almost entirely by the labor costs to actually operate the trains—the tracks and infrastructure are already there, as are the cars that spend most of the off-peak period sitting in yards. But the high marginal labor costs makes running additional service impractical a lot of the time. Paying an 8-hour shift for three employees—an engineer, conductor, and assistant conductor (and train crews are paid for a minimum of 8 hours, regardless of how long they work)—costs a little over $1,000 per crew per day. So to add service that requires an additional crew, you are incurring at least $1,000 in added expenses which need to be offset with new revenue. At an average fare of $8.01, the added train needs to attract at least 127 new passengers to break even. While that is an easy mark to hit on summer Montauk trains, for example, making them great money makers, it can be more difficult to reach in most other cases, especially since small increases in off-peak service usually just result in existing riders shifting from other trains.
While the LIRR has been dragged into the 21st century (kicking and screaming) in other areas, the 19th century fare collection system continues to pose a major impediment to improved service and truly modernizing the LIRR. Regional railroads across Europe and Asia learned this lesson decades ago and moved away from the wasteful practice of having staff on trains to inspect each and every ticket and instead turned to technology and what are now worldwide best practices to significantly cut costs. The LIRR spends over $250 million each year employing conductors to do a job most European and Asian railroads eliminated—that’s a lot of money that could be spent on expanding infrastructure, improving service, and keeping fares low.
Smaller systems or systems that are predominately enclosed often use turnstiles to control passenger flow, making sure all those who enter and/or exit have paid their fare. On larger systems, particularly those that are at grade and relatively open, like the LIRR, the much more common practice used is a system called “Proof of Payment”.
Proof of payment
Proof of payment is a type of fare payment system where passengers validate their tickets at the station before boarding, and then need to prove they have paid if requested by a fare inspector onboard the vehicle. Then, instead of spending a quarter-billion dollars on having conductors collect every fare, you instead have fare inspectors that conduct only random checks to make sure passengers have paid their fare. To deter passengers from riding for free and not paying, there is a penalty fare—usually at least 10x the one-way fare—that passengers caught without proof of payment must pay.Proof of payment is ubiquitous on commuter and regional railroads in Europe and Asia, and is already used in the United States on several systems, including Coaster, Metrolink, Caltrain, Sounder, West Coast Express, NM RailRunner, UTA Frontrunner, and SunRail. NJTransit’s Hudson-Bergen, RiverLine, and Newark light rail systems also use PoP, as well as the MTA’s Select Bus Service (SBS) routes.
Proof of Payment cuts costs considerably. Instead of relying upon humans to collect every fare, you only need to inspect a small sample of tickets to make sure people have paid their fare. If you set the penalty fare at 10x the one-way fare (the typical figure is closer to 50x the one-way fare, but LIRR fares are already high to start), then you, in theory, need only 10% of riders to encounter a fare inspector to make the system effective. If the LIRR spends $247 million to collect, in theory, 100% of tickets now, to collect 10% they would need to spend just about $25 million per year. Add in a modest amount to buy and maintain expanded ticket selling facilities and fare validators, and to maintain a small handful of conductor positions to station them at terminals to help assist turning trains, and additional MTA Police support to intervene with chronic fare evaders, you would be looking at roughly $30 million in fare collection costs. That represents a huge $200+ million savings over what the LIRR spends now—savings that could be put back into improving service, infrastructure, or reducing fares. Instead of spending an average of $1.67 per trip collecting fares, the LIRR would instead only spend less than 20 cents, which means a lot more of our fare dollars could go towards improving service.
With $200+ million a year in savings, the LIRR could dramatically expand off-peak service, make significant improvements to infrastructure, or lower fares so they are more affordable to people travelling within New York City, and systemwide.
Attached is a “Step by Step Guide to Proof of Payment” that goes into much further detail on how a proof of payment fare system would work, how it could be implemented, and operated, as well as dispelling many of the common myths and misconceptions about proof of payment.
Like many, many other worldwide best practices and attempts at modernization, legacy commuter railroads in the United States have been extremely resistive to implementing Proof of Payment. PoP provides clear and significant benefits to passengers, including offering significant cost savings that can be either reinvested into infrastructure and service, or passed on directly to riders in the form of fare reductions. PoP also dramatically reduces the marginal cost of running more service, meaning that savings that gets reinvested into service will go further than it would have if conductors were still needed. While the marginal cost of paying a three-person crew for 8 hours is over $1,000 a day, the cost of just the engineperson to actually operate the train is only about $350 per day, meaning you can get about three times as much service for the same level of investment than you would if you needed conductors.
The legacy railroads have feared PoP, as making this very passenger-positive change means eliminating conductors. Management has yet to demonstrate they have the courage to stand up to the unions and say it is time to move on from the way we did things in the 1800’s and join the rest of the world here in 2018. The fact of the matter is, there are currently no legal, regulatory, or contractual obstacles preventing the LIRR from transitioning to PoP now. No federal or state law, FRA regulation, or even the LIRR’s contract with SMART stipulates there needs to be more than zero conductors onboard trains, let alone a minimum of two (FRA regulations require each train to have an engineer and a conductor, but they can be the same person so long as they are dual-certified, which is already the case on the LIRR).
Nobody is a fan of change, especially when it results in the elimination of positions, but that is simply not an excuse to waste hundreds of millions of dollars every year and significantly hamstring further service improvements on doing things the same way we did in the 1800’s. And it’s important to stress Proof of Payment does not mean that all 1,300+ conductors automatically become unemployed (though that alone is, again, not an excuse to waste $200 million every year)—in fact, nobody really needs to lose their jobs. With lower operating costs, the LIRR could easily reinvest the savings in adding more service, and that means the LIRR would need more enginepeople, more car maintainers, and more people to fill all of the other roles that are still needed to run a railroad. The LIRR will already need such increases to support East Side Access, and transitioning conductors into these roles will mean better quality and lower costs, as conductors are already familiar with the LIRR’s infrastructure and would require spending less time and energy on training than hiring someone new off the street. At the end of the day, it’s important to remember the LIRR is not merely a source of employment, it is an important transportation service critical to Long Island’s economy—riders need to be the priority.
For a railroad so change-averse as the LIRR, going to PoP and eliminating conductors will be a challenge, but it is a challenge they must face if they are going to make any real attempt at modernization. You simply cannot have frequent service and affordable fares with a nineteenth century fare collection system. If you’re really wondering if current LIRR management is genuinely committed to modernization, there is no greater litmus test than Proof of Payment—as it is the modernization that can help make all of the other modernizations possible.
The MTA’s New Fare Payment System (NFPS) represents the LIRR and Metro-North’s best opportunity to put PoP into practice and save hundreds of millions in operating costs each year. While the current NFPS plans call for the railroads to get new ticket vending machines and integration with the smartcard system being added for NYCT, there appears to currently be little in the terms of actual modernization of the fare collection system itself. If we still need to spend tons of money having someone inspect each and every ticket onboard the train—like we did in the 1830’s—then the NFPS will add little to no value to rail riders.
When asked if the MTA plans to come into the 21st Century with Proof of Payment as part of the NFPS, all the MTA would say is that “it isn’t really known”. Back in 2014, I asked the MTA’s then-vice president in charge of the NFPS, Michael DeVito about why the railroads would not go to PoP, and his response was “because they don’t want to lose the money”, which exposes the gaping flaws in the MTA’s logic. Between the two railroads, the MTA spent over $440 million on conductors last year. They are losing much, much more money wasting it on conductors and are losing even more fare revenue than that when riders are turned away because of infrequent service or high fares—losses that sum to an amount much greater than what they might lose if a small percentage of riders skip out on fares with PoP. And the MTA’s own experience with cashless tolling proves that conception to be false—because of the steep fines people face when they don’t pay their toll, one person paying the late fine offsets nine others running the toll and never paying. That math works in the MTA’s favor so well that on the Henry Hudson Bridge pilot with cashless tolling, MTA officials said they recovered more toll money with the fines than they did when they had toll collectors and barriers making sure everyone paid the toll.
The benefits to passengers of PoP are clear and significant, but are railroad officials committed to real modernizations, or are the largely palliative “improvement plans” that won’t help service long-term be the most we are going to get?
