Quantifying the current and future impacts of the MBTA Corporate Pass Program

Abstract

Many city and regional transportation authorities, including the Massachusetts Bay Transportation Authority (MBTA) in Boston, offer a monthly pass to local employers which they can distribute to their employees. There are many ways in which an agency, employer or individual benefit from an employer pass program. There are financial benefits for all three parties, as well as increased convenience for employees, better travel demand management for employers, and increased ridership for agencies. The MBTA Corporate Pass Program was established almost forty years ago in an attempt to move away from inefficient fare collection methods while providing an avenue for employers to contribute to their employees' transit commutes and increase transit ridership generally. With these intentions in mind, this thesis aims to analyze the MBTA's employer pass program, and to quantify its benefit to the MBTA through program penetration, additional revenue captured, and reduced sensitivity to fare increases and seasonal fluctuations. Influencing factors such as company location, subsidies and local city policies are also analyzed to determine the effects of employer benefits policies on an employee's participation in the Corporate Pass Program and their transit ridership. The results show that the Corporate Pass Program is a very positive program for the MBTA, and accounts for 27% of their annual revenue. The MBTA receives an estimated additional $4.4 million in potentially foregone revenue from LinkPass Corporate pass holders annually. The program captures additional revenue by appealing to employees with lower transit usage than the average pass holder, many of whom do not use the aggregate ride "value" of the pass in most months and are attracted to the program because of the pretax or employer-provided subsidies. Furthermore, the Corporate Pass Program provides greater revenue stability month to month than other types of monthly passes as its users are less likely to cancel its purchase for vacation months than retail month to month users. This research also finds that certain employer characteristics, such as size, pass subsidy, location and parking availability have clear influences on employee participation and more subtle influences on average employee ridership.