The Chicago Tribune continues to ask questions about the fees associated with the new Ventra fare system and suggests that the Chicago Transit Authority (IL) and Pace Suburban Bus (IL) are substituting user fees for a fare increase.
The Tribune reports that the CTA will receive at least $500,000 in fees per year from sources other than fares — everything from advertising placed on Ventra equipment to the consumer fees associated with the optional debit card. CTA’s contract with Cubic Transportation Systems guarantees the agency 50% of the net revenue generated from nonfare sources.
A complicated revenue-sharing agreement spells out how much of the various fees each party receives. Critics say that the deal appears to favor the private companies at the expense of customers. CTA officials estimate that customer fees will amount to no more than a nickel per transaction and emphasize that these fees come only with the optional prepaid debit card. CTA president Forrest Claypool says that the agency will not try to encourage Ventra transit card customers to also acquire the prepaid MasterCard debit card.
Consumer advocates say that prepaid debit cards are not subject to the same regulation as other bank cards and warn customers about the extra fees that are often attached to these products. “Prepaid debit cards have no disclosure requirements or the protections of conventional checking accounts,” said Hailey Golds of the Illinois Public Interest Research Group. “The CTA should not engage in the business of selling Chicagoans prepaid debit cards that are largely unregulated and will leave the most vulnerable Chicagoans on the hook for hidden fees.”
CTA officials say that their primary interest is saving money on fare collection and processing while also providing riders with a regional card that allows seamless transfers among services. State law requires the three Chicago-area transit providers — CTA, Pace, and Metra — to implement a coordinated fare system by 2015. So far, CTA and Pace are on board. Link to full story in Chicago Tribune.
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