30 thoughts on “Here’s the Metro staff report explaining the FasTrak account maintenance fee for the ExpressLanes

  1. I for one have changed from an opponent of the fee because I was and infrequent carpool user, primarily to take my mother to church on Sundays. The fee was a charge on carpooling. After I got the transponder and starting using the Expesslanes I find it almost impossible to sit in stalled traffic when for only a $3.50 toll I can save time and frustration and arrive home just that much more relaxed. When I thought I would be paying the maintenance fee I am now factoring in the cost of using the Expresslanes as a reasonable cost of making a living, like parking fees and gasoline. I am changing my route pattern to have the option of using the Expresslanes on the 110.

  2. Martin makes an excellent point.

    Often times we hear the politicians on Metro Board asking Metro to explain why this is so and so instead of turning over the analysis to a third party.

    Metro then types up a report that explains why they do that, and since they’re the writers, they usually type something to their favor. And what you end up with is reports like these so as to try to gain the acceptance of the Board to agree with their plan. Where’s the input from the people who actually use the system? No where.

    All the decision making is done by Metro and the local politicians on the board. What we need is an independent third-party who can analyze and report these things from a neutral perspective.

  3. I have a problem with the way the math was done for the calculations, not that it’s inherently wrong, but it’s not made clear in the report.

    They justify the current fee based on cost per month for support, divided by the number of accounts that currently exist (that does make sense). They don’t discuss the cost of support based on the larger number of accounts. No where in the report does it say that the cost of support increases evenly based on the number of increased accounts (ie if you have 33% more accounts, the support costs increase by 33%).

    Also, the numbers provided also don’t take into account the people who wouldn’t be paying the fee regardless (due to using the transponder sufficiently), as Metro incurs those costs anyways (especially if those users don’t pay for using the lanes due to carpooling).

    To top that all off, they discuss the cost per transponder based on one number of current accounts, and then later use a different number of current accounts.

    This report contains way too many flaws for me to be able to make any conclusions.

  4. Also don’t forget that it’s a $3 account maintenance fee for eternity but there’s also nothing stopping them to raise the maintenance fees when they feel like it if they have more budget problems down the road.

    Who knows what they might do if they get this message across to the politicians. They could increase the account maintenance fees to $5 or $10 per month, or even set the minimum usage requirement bar higher to 10 maybe 20 times so as to make everyone pay up.

  5. I think Matthew B makes an excellent point about how the cost of support doesn’t/shouldn’t increase linearly with the number of accounts. If the accounts are mostly inactive, then the processing cost should be close to zero. They are just numbers in a database somewhere. I think Metro staff may want to explore the reasons why customer support costs so much as opposed to assuming that it will always be $3 per account for eternity.

    I also think that most logical people wouldn’t shell out $40 for a transponder when they know they will NEVER drive the lanes. Everyone who does make the initial investment is a potential customer. Unless you’re a vanpool operator, no one actually ever drives carpool 100% of the time. They might carpool on most days but will have that option available to them when they drive solo.

    The cannibalization of accounts is a persuasive point. Perhaps an agreement can be reached with existing toll facilities, or an additional fee charged to non-Los Angeles county residents who live far away from the corridor.

  6. B. Kuo hit it on the nail.

    Account maintenance is just bits of data. You can fit thousands, if not millions of users and their data in a single 4 GB USB flash drive.

    Processing that information is just a database. Any SQL based database is more than enough get this done. Anyone with basic HTML and Java script coding experience can build a proprietary system to keep this running.

    Anyone who has done online banking can access FasTrak information by themselves online without calling some customer service schmo staring at scripted prompts.

    So what is the justification that it costs $3 for everyone? Absolutely nothing. All it is another way to tax people to cover their budget problems.

    Sure there’s a cost to keep servers running, but so does every other company out there. Banks keep servers running to have 24 hour access to online banking, but that doesn’t mean they do not pass along account maintenance fees to people.

    Metro needs to learn that there is a limit to what they can pass along to people. There is a cost to doing business and as a service provider they need to find ways to cut their expenses down and learn how to balance a budget.

  7. Here is the real issue that the Metro board has to look at:

    These facilities were built as Carpool lanes;
    well actually no, the I-10 Carpool lanes were built using transit funds to be the El Monte Busway, which it still legally is, but has, through political meddling, has become the 2+/3+ facility it is today. And it isn’t open as an “ExpressLane” yet so let’s look at the I-110 Carpool Lanes.

    The I-110 Carpool Lanes were built as Carpool Lanes with public funds, and until a few weeks ago, were open to anyone who met the requirement of having enough people in their vehicle, which in the case of I-110, is 2 or more people.

    But now, the facility requires a transponder to enter, regardless of how many people are in the vehicle. This transponder costs $40 to obtain (discounts are available) and $3 per month to keep. Yes, if you use the transponder 4 times a month, the fee is waived, but you have to get the transponder in the first place and have it with you in the vehicle you are using that day when you want to enter the lanes, which you used to be able to enter just by having two persons in the vehicle.

    This requirement allows the more accurate collection of usage data, and in theory allows the driver to indicate how many passengers are in the vehicle, possibly lessening the requirement of law enforcement and/or cameras to actually look into the vehicle to determine how many passengers are in the vehicle.

    Let’s look at other similar facilities in the State of California to see what their policies are:

    San Diego’s Metropolitan Planning Organization (MPO) is SANDAG, and they have built “ExpressLanes” on Interstate 15 from just north of SR52 to Escondido. It’s a very similar facility because it includes the building of a series of Park & Rides and a promise of Express Buses running along the corridor all day long. But it allows the vehicle with 2 or more people to ride free with no transponder required (see point 9) here:

    http://fastrak.511sd.com/san-diego-toll-roads/i-15-express-lanes

    The two facilities on line in the Bay Area (where the MPO is the MTC), where yes many people have a FasTrak transponder because they are useful in paying for bridge tolls, are I-680 and I-580. HOWEVER, as in San Diego, Carpools are exempt from having to use a transponder.
    http://www.680expresslane.org/FAQ_&_Brochure.asp#26
    http://www.680expresslane.org/I-680.asp
    http://www.680expresslane.org/I-580.asp

    A future facility will open on SR237 in San Jose. Again, like the others, there will be no requirement to use a transponder if one is in a 2+ person-occupied vehicle.

    The TCA facilities in Orange County (all the Toll Roads there except the toll lane facility on SR91) do not have HOV lanes and do not offer discounts for vehicles carrying more than one person.

    The SR91 Express Lanes are a special case. They do offer a discount for vehicles that use the lanes if you are in a vehicle with 3 or more people. But this is a lane that was built with private funds, and has a fixed system tolls based on the time of the day, unlike the I-110 facilitiy which varies with demand.
    http://www.91expresslanes.com/schedules.asp

    Yes, the OCTA has purchased the SR91 Express Lanes from the private entrepreneur, but the lanes still charge a toll at certain times to HOVs and remember, SR91 did not have Carpool Lanes prior to the addition of the toll facility:
    Page 192 at https://wiki.umd.edu/lei/images/8/81/CaliforniaSR91.pdf

    So the board has to decide, is it worth getting all that extra data about the use of the I-110 ExpressLanes by requiring that everyone have a transponder (for which they will have to pay a maintenance fee) or does Metro start behaving like the other MPOs in the State of California (except for OCTA ‘s SR91) and not require transponders for those with 2+ (or 3+ in the future case of I-10) persons in their vehicle.

  8. Steve,

    I find the report has some disingenuous (or possibly incomplete) elements. However, there are a few precious nuts of truth that we can crack open and digest. Hopefully, staff and the board will look to the tangible issues hinted at in this report to tackle the real reform that the Southland needs.

    First, Table 2 states that the cost of a user account is divided into two different categories, depreciation of the transponders (18 cents per month) and Customer Service Center Support (at a whopping 282 cents per month). The table declares that all accounts cost the same to support. While this may be the case with the depreciation of the capital, I have a hard time believing that an infrequent user has the same customer service needs as a frequent user. People having lots of interactions with FasTrak have more opportunities for generating a problem that requires contact with the customer support center, while infrequent users will not. Bay Area commuters traversing bridges daily have more customer service needs than Valley dwellers that go into the City every few months. It goes to follow that their customer service needs are less. You could also tie fees directly to customer service interactions. For example, Bank of America will give you a free checking account without direct deposit if you never talk to a teller for deposit or withdrawals (ie: online or ATM interactions only). Perhaps waive the fee if users use the website to set up accounts, pay fines, and change debit cards, while charge $3 to the account if you need to talk to a person. If your service contract is based on total customers instead of actual use, then consider re-negotiating your contract.

    Secondly, the staff report in Table 1 states that the Bay Area can get away without charging fees because they have two million customers and they charge carpoolers. Regarding the latter, it should be noted that the Bay Area only recently started charging carpoolers, operating for years without minimum fees and had an extensive free carpool culture (see casual carpooling). Conversely, the report fails to note that there are toll agencies in the Southland that charge carpoolers but still have minimum fees (such as the Toll Roads). In regards to the former, the Bay Area has 2 million transponders across 4 tolling agencies while the Southland has less than 2 million transponders across 4 tolling agencies. However, the four bay area tolling agencies all let the Bay Area Toll Authority deal with the FasTrak business, while each of your tolling authorities tries to make your own shop for your own commuters. I repeat: The I-680 Express Lanes, the Bay Area Bridges, the Golden Gate Bridge, and SFO Parking are ALL DIFFERENT AGENCIES but somehow came together to have a unified system across the 9 County Bay Area to give them the “economies of scale” this report says Metro needs to waive the fee. Another reason the Bay has more transponders despite the fact it has a third of the people (7 million to 20 million) is because they don’t have monthly fees. You’ll find FasTrak in cars from Sacramento to Fresno because people go to the Bay every few months and who doesn’t mind saving time? The barrier to entry is dramatically reduced when you don’t have to worry about having to use it all the time. People are holding back because of this fee.

    From this incomplete report, I would recommend that the Board direct staff to approach all Southland Tolling Agencies and try to form a Joint Powers Authority to manage account maintenance that would give you the economies of scale necessary to do away with the fees. This authority would also distribute transponders that could be used on ALL FasTrak facilities. For example, you need a special transponder to carpool on the 110 while you need a Mylar bag to carpool in San Diego. The transportation system is supposed to unite the state in seamless travel and having different technologies and different accounts and different authorities needlessly divides the region and reduces choice. Letting non-LA-County-Residents in the express lanes helps out locals in the general purpose lanes, and the best way for you to get more customers and more political will to increase the amount of managed lanes is to increase the number of people with FasTrak. Unite the Southland, drop the fee, and watch as residents from Bakersfield to San Bernardino sign up.

    Finally, if a unified system is too grand, remember that express lanes is NOT about raising money, but rationing freeway space through market based solutions. Everyone is better off when throughput is maximized, and turning a profit should be incidental, not the goal. Don’t let staff’s incomplete analysis and lack of vision stand in the way of an integrated managed lane system and six million Southland transponders.

  9. It just shows here that many people here who actually work in the corporate world actually knows more about corporate finance than the people who work at Metro.

    This, is why I think, the back-and-forth cat-and-mouse games between local politicians and Metro doesn’t work. Sad to say, Metro employees are not the best and the brightest when it comes down to corporate financing and keeping budgets under control.

    I think as taxpayers, we really need to start asking our elected officials to use third party independent analysts and consultants from Deloitte or PwC to do the reporting to find the real cost of these Metro projects instead of just believing the amount and rationalization that Metro says in their reports.
    Besides, I’m sure Deloitte and PwC has offices here in Los Angeles and all over the world who contracts and have given financial advice to many transit agencies all over the world. In addition, many Deloitte and PwC employees live in transit oriented cities and commute to work using public transit. I’m sure if anyone can find Metro inefficiencies, they would be the best ones to hire.

  10. Why don’t they just reduce the amount of times to 1. Like this people from other agencies won’t buy the Metro transponder and metro can still make sure that people will use it at least once a month. Maybe I’m wrong here but I’m almost certain that anyone who gets the transponder will use it at least once a month.

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