Carrying fewer passengers this year, Northstar commuter rail is slashing fares by as much as 25 percent in an attempt to attract new riders.
The fare reduction underscores the ongoing challenge the line -- now nearly three years old -- faces in persuading northwest suburban commuters to ride.
Ridership declined 2.8 percent through May of this year and is lagging even further behind expectations for 2012. Metro Transit officials blame it on a variety of factors, including the Twins' drawing fewer riders to Target Field, and say adjusting fares is part of the line's growing pains.
"We are a brand-new system and kind of have to play with price and demand to get it right," said Ed Byers, deputy chief operating officer for commuter and light rail at Metro Transit. But a transportation researcher critical of rail transit says the relative ease of driving and parking in Minneapolis practically guarantees soft demand for the commuter train.
"You're not looking at a market that was suited to this," said David Levinson, a professor at the University of Minnesota.
The fare reduction will be in effect from Aug. 1 through April to test public reaction. The Metropolitan Council, which oversees rail and transit, could make the reduction, or a version of it, permanent.
A goal of the Met Council is to offset the fare cut with increased ridership. But Northstar would need to attract a new passenger for every five current riders to erase a $323,000 revenue loss expected from the fare reduction alone over the nine months.
"It's unlikely," Byers said. "But Northstar was built for the long term, and our real goal is attracting riders for the long term."
Metro Transit says it will tap fund reserves or trim expenses elsewhere to make up for any loss in revenue not recouped by increased ridership.
Subsidy large before discount
Even at full prices ranging from $3.25 to $7, fares don't come close to paying for the line. Northstar, like other commuter trains, is heavily subsidized, with government paying about 80 percent of the $24 per-passenger cost. To prevent that subsidy from rising even more as fares are cut, ridership would need to increase by 3 percent.
The cost of transporting a passenger on the Northstar is about twice that of the Hiawatha light rail but roughly the same as on city buses, according to the National Transit Database and unaudited figures from Metro Transit.
Northstar commuter rail lacks the market advantages of the Hiawatha and future Central Corridor light-rail lines, which are anchored by downtowns of Minneapolis and St. Paul and popular destinations like the Mall of America. While Northstar funnels commuters to downtown Minneapolis, the other end of the line is Big Lake, population 10,060. Northstar also has far fewer stations and a more limited schedule than light rail. Central Corridor light-rail trains are expected to run every 10 minutes during peak periods.
"Commuter rail is a different service altogether -- in the Twin Cities and everywhere else," said John Siqveland, a spokesman for Metro Transit.
A continuing slide
While Hiawatha has exceeded ridership expectations, Northstar's decline from January through May of this year over the same months last year is part of a continuing slide in its ridership. It went from 710,426 in 2010 -- its first full year of operations -- to 703,427 in 2011. Metro Transit forecasts 688,200 riders in 2012.
This year's warmer, less-snowy winter was one factor blamed for the commuter ridership decline as driving to work became more attractive. A freight train derailment interrupted commuter rail service in 2011.
Transit officials say surveys show that fares and the lack of off-peak service are cited as reasons for not riding the Northstar.
"We've had many surveys coming back that the fares are just too high," Byers said.
Passengers pay $7 to ride the 40 miles from Big Lake to downtown Minneapolis.
That fare will drop to $6 under the new pricing formula. Fares from Anoka or Coon Rapids-Riverdale to downtown will be cut from $4 to $3.
Levinson is skeptical it will pay off.
"They're hoping to use this to give people a taste who might otherwise not have tried it," he said. "I just don't think there's a large market out there of people who would ride the Northstar line ... for a $1 fare drop."
While large, established commuter lines avoid fare cuts, Metro Transit says it is taking its cue from relatively new commuter rail lines in San Diego, Salt Lake City and Austin, Texas.
The Utah Transit Authority's commuter rail opened on 40 miles between Salt Lake City and Ogden in 2008 amid higher gas prices, and initial ridership exceeded expectations. But then gas prices dropped and a new highway opened nearby to give riders an alternate route.
UTA dropped base fares and ridership initially climbed before declining a bit.
"The assumption was we would get an increase in ridership to offset the loss in fare box revenues, but it's hard to say how that played out," said Gerald Carpenter, a spokesman for Utah Transit Authority.
Pat Doyle • 612-673-4504