One of the CTA’s nicer stations.
Soon you’ll be able to buy a 3-day pass on Chicago Transit Authority via Groupon. Groupon is purchasing 250,000 passes at $7.53 each and will resell them to Groupon buyers for $9, down from the $14 retail price. The pass allows unlimited rides on CTA buses and trains for 72 hours from the first use. From the press release:
Groupon has 36.9 million active customers and close to 900,000 daily page views, allowing CTA an opportunity to advertise to a national and international audience. Emails will appear in a member’s daily deal for Chicago and when visitors search for travel deals on the internet retailer.
The discounted rate will encourage more people to use CTA’s 3-Day pass, which offers a better value than the pay-as-you-go option. The CTA Groupon will also cultivate new riders and eventually capture permanent local customers, expanding the current ridership base.
In addition to gaining additional ridership, CTA will receive customer information that will help CTA reach out to customers to help encourage further use of the system.
Per the terms of the agreement, Groupon and CTA can agree to offer an additional 250,000 passes for the same price within the next 12 months. This agreement does not affect the availability or price of 3-Day passes at existing sales locations.
This is a neat idea that has some potential to introduce a lot of new people to the CTA. However, I believe that the cost of a CTA ride has a low impact in attracting new riders. I think the barrier is based on observers’ low perceptions of frequency, reliability, and cleanliness: the system quality and breadth has a reputation with a lot of ups and downs.
From a report published in in Transport Policy, an international journal:
After controlling for key demographics the researchers found a consistent pattern [of methods to increase ridership]: System expansion increases transit ridership a little. Car regulation increases it a lot. And fare subsidies have no effect at all.
The Groupon deal is a kind of fare subsidy. And it seems to be the CTA itself that’s subsidizing the fare on top of all of the other subsidies transit receives. “Car regulation” includes taxing or tolling roads and congestion, two methods that can decrease the subsidy for roads (which are barely supported by gas taxes), but importantly brings to the forefront the costs of the car traveler’s trip – much like paying the $2.25 fare to board a bus.
A not-so nice CTA station. Madison/Wabash elevated station in the Loop. Photo by Kevin Zolkiewicz.
Updated 01:52 to add information from Transport Policy about subsidies.