As SEPTA’s institutional pass pilot with three local employers—Drexel, Penn Medicine, and Wawa—nears the end-date of its 6-month trial period, the early results are looking like a rousing success.
The SEPTA Key Advantage program is a new initiative enabling an employer-paid benefit program where institutions can pay a discounted rate per-worker to cover all their employees. Employers commit to paying $27 a month per enrolled worker for 6 months ($162 in total), and then the institution’s rate can shift up or down by 10% after that initial 6 months, depending on how much their workers use it.
SEPTA’s Board made the program permanent after the initial pilot announcement, and this week KYW reported the transit agency is ready to begin opening up the program to organizations with 50 or more workers, as well as university students.
“A six-month pilot with The University of Pennsylvania, Drexel University and Wawa proved so successful that SEPTA has made the Key Advantage initiative permanent, Johanson told KYW Newsradio. “As we’ve been looking at the data, we’ve found pretty significant successes. So much so that we felt comfortable going ahead and announcing [Wednesday] the next phase of theexpansion of the program.”
Johanson said SEPTA is negotiating with other large employers, and next year will open the program to small businesses with fewer than 50 employees. “This is a way for an employer to offer a new benefit to their employees that’s a differentiator for the employer in a tough hiring market,” Johanson said.”
The 50-worker threshold is keyed to a new city law that goes into effect in January, where companies with 50 or more employees will be required to offer transit benefits, either of the federal pre-tax variety, or the employer-paid SEPTA Key Advantage variety. This week, FMC in University City became the first large company to sign up for Key Advantage, covering nearly 500 more workers.
Because the program involves signing each worker up for a Key card account, people have to opt into the benefit and aren’t just automatically enrolled as a function of their institution signing on, so there is a little bit more friction to the process than is ideal.
But according to SEPTA sources, that little process hurdle hasn’t exactly been keeping workers away—so far, 70% of all eligible workers have signed up, averaged across all three pilot institutions. Anecdotally, the benefit seems to be a huge hit with the workers receiving it based on personal conversations with workers at the participating institutions.
There’s also some evidence that receiving the benefit has led to more transit usage. KYW reported this week that over half of the 15,800 eligible workers regularly used SEPTA, and people who had existing passes rode about 18% more than they previously did. There’s a lot to like here, and it sounds like there are some good reasons to be optimistic that getting the pass into even more workers’ hands is going to help on the margin to get ridership back up.
That matters a lot because, while SEPTA isn’t currently facing an immediate budget crunch thanks to the federal COVID emergency funds, those funds need to be committed by 2024, and things are going to start looking more precarious after that if ridership doesn’t come back. Right now, SEPTA ridership is a little over half of what it was pre-pandemic, leading to lower farebox revenues.
That is a real problem because, before the pandemic, SEPTA generated about 40% of its operating revenue—the bucket that pays for running the actual service—from fares, but now that’s down to 20%, according to SEPTA’s Erik Johanson in the KYW interview. Combined with the recent Act 89 transit funding formula shift at the state level creating a more uncertain situation for SEPTA’s largest revenue source, there could be some serious storm clouds ahead.
These circumstances call for a lot more aggressive experimentation from city and transit agency leadership over the next two years, and a spirit of throwing everything at the wall to see what sticks to get the ridership numbers back up. It also calls for a big dose of Philadelphia Patriotism from the leaders of our large institutions, who might be on the fence about offering the benefit, but should do it for the health of the city and its economy.
Colleges and universities in the city and the broader region have a very important role to play, both as large employers, and also as potential benefits-administrators to their students. The original institutional pass advocacy push was a campaign to create a university pass similar to what exists in Pittsburgh, where all students at Pitt and Carnegie Mellon receive transit passes as part of their tuition.
Judging by how the alumni of those universities will rave about this whenever this comes up, this is potentially a major positive PR opportunity for our local higher-ed institutions. And it’s also a way that they can contribute to repairing ridership and putting transit operating funding on a more sustainable path for the benefit of their students and workers.
There’s more that city government can do within its own control too, such as negotiating SEPTA Key Advantage benefits as part of upcoming municipal worker contract negotiations with AFSCME DC33 and DC47, and the Philadelphia Federation of Teachers. The SKA benefit is an Anywhere Pass, and thus could be appealing to municipal workers living in Northeast or Northwest Philly closer to regional rail lines.
There’s lots of room to get creative with this, and now that the program is open to medium-sized organizations and universities, now is the time for everybody to get on board. Interested organizations can submit an expression of interest via the Jawnt platform to begin the process.