Objective

To determine if Metropolitan Transportation Authority – Long Island Rail Road's fare collection method is effective and efficient. This audit covered the period January 1, 2015 and May 8, 2019.

About the Program

The Metropolitan Transportation Authority (MTA) is a State public authority created pursuant to Article 5, Title 11 of the Public Authorities Law. One of six MTA constituent agencies, the Long Island Rail Road (LIRR) is both the largest commuter railroad and the oldest railroad in America operating under its original name. It extends from three major New York City terminals – Penn Station, Manhattan; Atlantic Terminal, Brooklyn; and Hunterspoint Avenue, Queens – through a major transfer hub in Jamaica to the easternmost tip of Long Island. The LIRR operates 24 hours a day, 7 days a week, including all holidays. In 2018, the LIRR carried 311,100 passengers on an average weekday.

The LIRR has a distance-based fare structure, with branches of service divided into eight fare zones. Two main types of tickets are offered: commutation (unlimited weekly and monthly travel within the specified zones shown on the ticket) and non-commutation (one-way, round-trip, and ten-trip travel to the limits of the zone or zones shown on the ticket). Peak fares are charged during business rush hours; off-peak fares are charged all other times on weekdays, all day on weekends, and on some holidays. LIRR tickets can be purchased in either hard copy or electronic form. One-way trips range from $1.50 to $29.25. Tickets can be purchased prior to boarding or, for an additional surcharge of up to $6.50, on board the train.

The LIRR is authorized by New York State law to collect fares, tolls, or other fees for the use and operation of its railroad system. Per the New York Codes, Rules and Regulations, riders must present a valid LIRR ticket or pass, or pay the applicable fare.

Train Service Personnel (TSP), who are part of the Transportation Services Department, are responsible for collecting fares from every rider. According to the Manual of Instructions to Passenger Train Service Employees (Manual), all tickets should be checked at least once during a trip. For example, tickets on a train that stops at Jamaica are checked before arrival and again upon departure. For hard copy non-commutation tickets, TSPs punch out part of the ticket upon inspection. Hard copy and electronic commutation tickets are visually inspected. In addition, twice per month, TSPs must punch out hard copy commutation tickets to identify frauds or counterfeits. Customers who cannot pay the cash fare on board the train or who need a receipt for a confiscated ticket are issued an ADL 6009 invoice (Invoice). From January 1, 2015 to December 16, 2018, the LIRR issued 329,612 Invoices worth $4.4 million.

In the past, TSPs accepted cash for onboard hard copy tickets. In August 2017, the LIRR rolled out the On-Board Ticket Issuing Machine, which accepts credit cards and cash as payment for onboard tickets and can generate Invoices by either scanning an identification card or manually inputting a customer’s information. As of December 20, 2018, 1,079 onboard machines were issued to TSPs.

Key Findings

We found that LIRR employees did not always follow the required fare collection procedures. During a series of observations between December 2018 and May 2019, we noted that TSPs did not collect non-commutation fares 26 percent of the time (78 of 301 rides). We also found that TSPs often collected incorrect fare amounts (for example, when no onboard surcharge was collected).

While the sample cannot be projected to the LIRR system as a whole, if we were to use the percentages from the audit team’s observations, we estimate a potential revenue loss of $33.4 million due to uncollected or incorrect fares. Further, the LIRR did not always follow Invoice collection procedures, leading to additional lost revenue.

Key Recommendations

• Determine why TSPs did not adhere to fare collection requirements, and develop a corrective action plan accordingly.
• Standardize and document all Invoice policies and procedures.