Metro is proposing to lower late-night fares and weekly and monthly passes under a plan released Monday that seeks to win back riders while putting more emphasis on leisure trips outside of the work commute.
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General Manager Paul J. Wiedefeld proposed a nearly $4.6 billion budget for the next fiscal year that assumes slow ridership recovery and a continued heavy reliance on federal aid. The draft, which Metro's board will discuss Thursday, includes a flat $2 late-night fare intended to help service workers and boost traffic to restaurants and events, according to the proposal.
The plan also includes discounted monthly passes aimed at commuters, while price cuts for seven-day passes would target workers who plan to telework more frequently after returning to offices.
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The measures are the latest the agency has enacted or proposed in recent months to lure back riders after a historic decline in passenger trips. The changes come at a difficult time for Metro as it simultaneously navigates pandemic recovery and a federal safety investigation after an October train derailment.
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“As Metro and the region continue to recover from the effects of the covid-19 pandemic, the Proposed [fiscal year] 2023 Budget continues to invest in all-day service seven days a week that prioritizes safe, reliable, and equitable transit service,” Wiedefeld wrote in his budget proposal to Metro’s board.
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Wiedefeld proposed an operating budget of $2.28 billion, an increase of $182 million over the current fiscal year. Higher costs are being driven by the expected opening of the nearly 11-mile Silver Line extension to Loudoun County and the Potomac Yard station in Alexandria, as well as union-negotiated pay increases and the hiring of workers to coordinate with the Washington Metrorail Safety Commission, an independent agency that monitors Metro safety.
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The agency’s capital budget, which includes projects and purchases such as station and track repairs — and new bus and rail-car orders — is projected at $2.3 billion.
Wiedefeld declined to comment on the proposal ahead of Thursday’s board meeting. Metro spokeswoman Sherri Ly said the budget was developed with input from the board on a range of fare options it has previously discussed. The proposed budget will go through multiple board meetings and public hearings, expected to begin early next year. A board vote to finalize a budget is likely in the spring.
During that process, Metro will gather data on the region’s post-pandemic travel patterns, as well as feedback on the effectiveness of flat fares and other discounts the transit agency launched weeks ago.
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The proposals come as Metro continues to operate with reduced rail service — relying on about a quarter of its fleet — after its 7000-series rail cars were pulled from service Oct. 17 when a car slipped from tracks on the Blue Line. The derailment prompted the evacuation of 187 passengers and led to a National Transportation Safety Board investigation that revealed a defect in the cars’ wheelsets.
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The series, which makes up about 60 percent of Metro’s fleet, will remain out of service until the transit agency proposes a plan to the safety commission that could reinstate non-defective cars. Metro has indicated reduced service will last until at least Nov. 15.
“We understand that our customers are facing significant waits out there for trains right now, and we continue to work to put more rail cars in service,” Ly said.
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Until the current rail-car crisis, Metro, which had lost up to 80 percent of riders last year during the pandemic, had seen passenger increases as schools and offices reopened amid diminishing effects of the coronavirus. Metrorail ridership was about one-third of pre-pandemic levels before recent service cuts.
Metro considers another round of lower fares to lure riders back
In the budget proposal released Monday, Metro projects the pandemic and increasing use of telework will continue to slow ridership growth in the next fiscal year, which begins July 1. Wiedefeld’s budget assumes total ridership will grow to 53 percent of pre-pandemic levels, resulting in $437.6 million in revenue, or 45 percent of what the agency brought in before the pandemic.
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Lower revenue projections are also being affected by fare cuts that Metro’s board made in June, including $2 weekend flat rail fares and the removal of a $1.50 bus-to-rail transfer fee.
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Wiedefeld’s proposal includes $1.91 billion in operating expenses that would be paid by $1.19 billion in annual subsidies from the District, Maryland and Virginia, as well as $715.8 million in remaining federal aid from three coronavirus rescue bills Congress passed last year.
Metro Chief Financial Officer Dennis Anosike said last week the transit agency projects to have about $800 million left in federal aid after the end of the current fiscal year.
The road to self-sufficiency for the transit agency remains long. Ridership is projected to grow to about 55 percent of pre-pandemic levels in the next fiscal year, Anosike estimated, rising to 75 percent the following fiscal year before fully recovering after mid-2024.
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Metro’s projections are conservative, with scenarios that factor in workers continuing to telework long-term, “reflecting surveys that [indicate] current trip patterns may be permanent,” Anosike said, adding that “some employers show limited appetite to return to the office, at least at the present time.”
Metro board approves fare reductions, service increases in bid to lure back riders
Wiedefeld’s proposed fare cuts decrease Metro’s already bleak revenue projections, but transit officials hope they would lead to permanent customer gains. The proposed $2 late-night fare would go into effect after 9:30 p.m.
Kathy E. Hollinger, president and chief executive of the Restaurant Association of Metropolitan Washington, said cheaper fares would be welcomed by service workers and restaurant-goers, but reliable Metro service is more important.
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“As the region continues on its path of recovery from the pandemic, and as so many industries are experiencing staffing shortages, any additional barriers are problematic and hopefully resolved as quickly as possible,” Hollinger said in a statement, referring to the agency’s current service cuts. “A late night flat rate would be welcome, and we support what brings reliability back to the Metro system.”
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Wiedefeld also is proposing discounted monthly passes, which would drop SmarTrip prices that currently range between $72 and $216 to between $64 and $192. Unlimited seven-day passes, which would be part of a six-month trial period, would be discounted to attract workers who might not travel on consecutive days, the proposal said. Those passes would drop from $58 to $29.
The budget plan also proposes a bonus during a six-month trial period that “rewards” customers by adding $5 in SmarTrip credit for every $25.
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“The bonus may induce ridership and appeal to customers with irregular work schedules,” the proposal said.
The budget does not propose lifting peak rail charges, an upcharge levied during morning and afternoon commutes. Riders have called for an end to peak-hour pricing as Metro standardizes wait times to match customer usage trends during the pandemic. Wiedefeld said last week that lifting the charges could be something he and board members discuss.