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The National Academies

Transit IDEA J-04/IDEA 18 [Completed (IDEA)]

Pilot Testing Innovative Payment Operations for Independent Transportation Network (ITN)
[ TCRP J-04 (Innovations Deserving Exploratory Analysis--The Transit IDEA Program) ]

  Project Data
Staff Responsibility: Harvey Berlin

This project (Transit IDEA Project 18) pilot tested two innovative payment operations for independent transportation for the elderly—adult child payment plans and merchant participation. It also investigated the use of geographic information system (GIS) technology for community-based transportation for seniors.
 
A previous Transit IDEA Project, Independent Transportation Network: Alternative Transportation for the Elderly (Transit IDEA Project 9), showed that seniors were willing to use a transportation service that models the comfort and convenience of the private automobile. (Freund, McKnight 1997) This Transit IDEA Project 18 research examined several innovative sources of revenue and the application of information system technology.
 
Transit IDEA Project 18 investigated innovative payment methods by looking outside the traditional public funding sources to private resources in the community. This project demonstrated that businesses and adult children are willing to participate in the cost of transportation for seniors.
 
Adult children whose parents use the transportation service and members of the business community whose customers and patients use the service were identified as groups who might be willing to help pay for rides. Geographic Information System (GIS) technology was selected as the information system application most likely to contribute to the efficiency of the senior transportation service.
 
Research was conducted at the Independent Transportation Network (ITN) in Portland, Maine. ITN uses automobiles and both paid and volunteer drivers to provide service seven days a week. Seniors who use the service become members of the nonprofit organization and open prepaid accounts which are debited to pay for their rides. No money changes hands in the vehicles; rather, members receive monthly statements, similar to a telephone bill, detailing their rides and charges.

Project Results

A. Innovative Payment Operations for Adult Children

A catalogue that combined gifts and transportation certificates was tested with seniors and their adult children. The response rate from the target market, adult children of seniors, was approximately 10 percent. By comparison, the typical response rate of companies in the catalogue industry is only two percent. Most of the gift certificates purchased, however, were for transportation only, not transportation combined with a gift. This meant that the only opportunity to raise revenue was from fees charged for the certificates, a practice that was unpopular with consumers. The willingness of adult children and families to participate in the ITN senior transit service was then tested as a membership campaign, expanding the membership concept from the senior customers to families and the population as a whole. The membership program produced revenue immediately, with membership dues from adult children and siblings ranging from $35 to $1,000. Gift certificates have been retained in the transit program as conveniences for customer service. Adult children liked them as a feature of the service and showed their appreciation for the ITN through contributions and membership dues. Likewise, credit cards as a payment method did not increase adult child participation in the program, but they did provide a good customer service.

B. Innovative Merchant Program

Merchant participation was tested with the Ride & Shop program. A control group and an experimental group tested the program for six months, collecting stickers from thirteen area merchants. The results indicated the Ride & Shop program was effective in increasing rides to participating stores. Each sticker collected was worth $1.50, with $1 going to the riding seniors, as an incentive to patronize that store, and $.50 going to the ITN to help cover the deficit incurred with every ride. The administrative cost of the Ride & Shop program exceeded the economic benefit until the program became "stickerless" as an electronic transfer of funds from the merchant’s account to the accounts for the seniors and the ITN. Like the membership campaign described above, the electronic Ride & Shop program was implemented at the ITN in Portland, Maine, after the actual research project was completed.

C. Information System Technology

A GIS program was designed to create shared rides among community-dwelling seniors by using windows of availability and by dispatching volunteer drivers. Available commercial GIS software applications for transit were found to be inappropriate and unaffordable for small community volunteer transit services that need to capture the detail necessary to properly dispatch volunteer drivers and their vehicles. Focus groups and a survey of seniors using the ITN service indicated that 80 percent of seniors were willing to share rides in automobiles with other seniors in the service. The GIS software program could not be built with the resources available in the Transit IDEA Project. However, a GIS software application that uses Transit IDEA research results was built with other resources. The program dispatches to both paid and volunteer drivers, creates shared rides as a consumer choice, incorporates revenue and data collection for the innovative payment operations (Ride & Shop, Healthy Miles, and Ride Services), and maintains a database for membership.

By demonstrating two innovative payment options through adult children of seniors and businesses in the community and by using a GIS to create shared rides and efficiently dispatch volunteers, this project provides information on innovative payment methods for transportation services for elderly people.

More than $1 million in follow-on funding was obtained and used for post-IDEA research and development. Some of the methods developed in this project and Transit IDEA Project 9 were subsequently used in a number of communities, including Santa Monica, California; Orlando, Florida; and Mercer County, New Jersey.

NTIS # PB97-171540

The final report for this IDEA project can be found at:
http://www.trb.org/studies/idea/finalreports/transit/Transit18_Final_Report.pdf.

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