TO: AC Transit Board of Directors
FROM: Salvador Llamas, General Manager/Chief Executive Officer
SUBJECT: Clipper Discount and Fare Policy
ACTION ITEM
AGENDA PLANNING REQUEST: ?
RECOMMENDED ACTION(S):
Title
Consider providing direction on whether to remove the Clipper discount and the parameters and timeline for the change along with the proposed Board Policy changes needed; and receive a report on fare policy analysis. [Requested by Director Syed - 12/10/2025]
Staff Contact:
Chris Andrichak, Chief Financial Officer
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Fare revenue represents the largest revenue source under the District's control. Accordingly, any changes to fare policy or fare levels require comprehensive analysis and thoughtful consideration of their impact to all riders.
BUDGETARY/FISCAL IMPACT:
Based on FY 25-26 fare revenues, staff estimates that removing the Clipper discount by increasing the Clipper fare to match the cash fare - from $2.75 to $3.00 - would increase fare revenues by approximately $2.3 million assuming no loss of ridership as a result of the fare increase. Alternatively, removing the Clipper discount by decreasing cash fares from $3.00 to $2.75 would reduce fare revenues by approximately $680,000, also assuming no change in ridership as a result of the fare change. The difference in the magnitude of the increase and the reduction is because Clipper accounts for a much larger share of fare revenue.
The original purpose of the Clipper discount was to incentivize Clipper use for various reasons. One significant reason is that it costs the District much less to collect fares through Clipper. In 2019 and again in 2022, staff analyzed the cost of fare collection. A preliminary update with forecasted FY 25-26 fare revenue shows that it costs the District 10 cents of every $1 collected through Clipper (10%), while it costs 50 cents for...
Click here for full text