Management Framework for Transit Pricing

Abstract

A management framework for developing and managing a fare strategy for Tidewater Regional Transit (TRT) is suggested, and the underlying rationale and decision-making steps are illustrated. Results of roundtable meetings held with TRT management and staff in January 1994 and experiences organizing and implementing pricing strategies in corporate, nonprofit, and other transit organizations throughout North America are reported. It is proposed that TRT focus its pricing strategy on a clear understanding of its primary and secondary management objectives and on how the various pricing components can help fulfill these objectives. In providing this framework, examples of relevant pricing strategies in other nonprofit and commercial entities are highlighted. An understanding of positive and negative facets of discount programs is provided to illustrate effective discount methods and common pitfalls. A simple, sequential process for managing pricing strategy effectively is outlined and recommendations offered on how to maintain an effective pricing strategy within an organization.