Making riders tap their CharlieCard to leave could reduce expected fare evasion surge, new analysis finds

A CharlieCard being used in Boston.John Blanding/Globe Staff

Having MBTA riders tap their CharlieCards, phones, or credit cards while exiting the Green Line could reduce an anticipated increase in fare evasion when the MBTA’s new fare collection system is expected to be completed in 2024, a new report suggests.

The nearly $1 billion Automated Fare Collection 2.0 system, already severely delayed and over budget, will allow riders to board buses and trolleys using all doors. But, that convenience meant to speed up service will allow more riders to skip paying the fare altogether, the MBTA has acknowledged. Requiring riders to tap on the way out may encourage more to pay, an analysis from the Pioneer Institute found.

The Massachusetts Bay Transportation Authority loses more than $30 million each year to fare evasion, the report said. Initially, the agency expected the new fare system to reduce yearly fare evasion by around $3.5 million. But an analysis by the MBTA last year found that the agency could see an additional $25 million to $30 million of revenue lost to fare evasion each year once the system is implemented.

The new system already incorporates plans for some tap-in/tap-out infrastructure. Commuter rail riders will be required to tap in and tap out at South Station, Back Bay, and North Station, where around 90 percent of commuter rail trips either begin or end, the report said. If tap-in/tap-out is adopted on the 13 underground Green Line stations, the MBTA could limit fare evasion among most Green Line riders, the report said.

Tap-in/tap-out is likely not possible for buses, which operate at mostly open-air stops. Requiring riders to tap-out on board would slow down service, reversing a principal goal of the new fare system.

Boston Mayor Michelle Wu campaigned on making public transit free for riders, starting with buses, where eliminating fares can speed up service and boost ridership.

To combat the expected surge in fare evasion with the new system, the MBTA has floated hiring fare inspectors and adjusting fines that currently start at $100 for the first offense. The Pioneer Institute estimates that if the MBTA were to hire around 100 inspectors and institute a fare evasion fine system starting at $50 for the first offense, the agency would still lose $18 million to $23 million each year. If the MBTA spends around twice as much on inspectors and institutes a fare evasion fine system starting at $25 for the first offense, the agency could see losses of $28 million to $35 million per year, more than the cost of doing nothing.

The MBTA plans to begin all-door boarding on its trolleys and buses in 2023.

“Under its phased approach to the project, the MBTA has been able to incorporate community and stakeholders’ feedback while continuing to develop a proof-of-payment strategy that is fair and balanced,” said MBTA spokesperson Joe Pesaturo via e-mail.

The report authors called for an independent analysis of the T’s fare evasion problem and questioned the accuracy of the MBTA’s estimate that its fare evasion rate on buses is one percent, given it is much higher in other cities.

“There’s a cost-benefit effect of having on board verifiers; it could end up costing more than you recover,” said Gregory Sullivan, Pioneer’s research director and the state’s former inspector general. “This is an unresolved public policy issue, and they should get some real independent data to base the decision upon.”

Transit advocates have long urged the T to develop its fare policy before spending millions on fare collection upgrades. The new system will eliminate the on-board cash payment option, still used by some low-income bus riders.

The looming fare evasion spike comes as Mayor Wu is planning to make more MBTA bus lines free for riders. The 28 bus has been free for riders since August 2021. Last year, the city council approved spending $8 million of the city’s federal COVID-19 relief funds to replace MBTA fare revenue on the 23, 28 and 29 bus lines for a period of two years starting early this year. The city and MBTA are currently working through implementation requirements with the Federal Transit Administration.