IndyGo proposes fare hike for the first time in 16 years

IndyGo proposes a new fare policy, breaking a nearly 16-year-long streak of stable fees. If approved, rates would rise from $1.75 per trip to $2.75 per trip. All 10-trip and 31-day tickets, S-Passes, and Summer Youth Passes would also be eliminated.

IndyGo Access, the transit agency’s reservation-based, shared-ride service, will change its fees under the new policy, too. Currently, fares are separated by areas: ADA areas, premium areas with scheduled trips, and premium areas with same-day trips. ADA area trips cost $3.50 and would rise to $5.50, scheduled premium areas cost $7.00 and would rise to $11.00, and premium areas with same-day trips currently cost $10.00 and would instead cost $15.00.

Despite the process being in its relative infancy – the policy was introduced to the IndyGo Board during its May 15 meeting –  IndyGo has created an ideal fare implementation timeline. The first virtual public community meeting will convene on June 3; in-person public meetings will be hosted every Tuesday and Thursday after June 5. A public hearing will be held on June 18 during the next board meeting. Public outreach will continue from that date forward until July. On August 21, a vote will be taken. Assuming the board votes yes, new fare rates would kick in on January 1, 2026. Happy New Year!

Copious public outreach will be necessary to make this policy change work. There is an obvious reason why: people generally don’t like being told to pay more fees. Despite IndyGo’s promise that the funds will be used to “keep buses running reliably … support the frontline workforce … stabilize IndyGo’s finances … and maintain fare programs like fare-capping, free and discounted passes, and half-fare options,” there is no immediate gratification for riders that is tangible to them. Everyone from riders to stakeholders to legislators will view the policy shift differently, and some, inevitably, will strongly dislike it. This is a ‘tread lightly’ scenario, and IndyGo understands that.

Even if public outreach reveals a strong aversion to the fare hike, this was a decision born of necessity – and you only have to glance at the fiscal cliff facing other public transit agencies nationally this year alone to understand the imperative. IndyGo officials expect that they would pass the fiscal point of no return near the turn of the coming decade, and a failure to prepare for it would pace them in the same untenable situation other agencies are facing with no viable solutions in sight as they would begin to address costly major equipment life cycle replacement issues.

The Circle City public transit service is contending with a 67% drop in purchasing power since 2009. Simultaneously, operating expenses have spiked 58% since 2009. IndyGo also cites “inflation” and “rising fuel prices.”

The pandemic accelerated IndyGo’s tenuous financial situation . . . and not simply because people weren’t looking to leave their homes.

No Good Deed Goes Unpunished . . .

For three months after its debut in 2019, IndyGo offered Red Line rides for free. The appeal of a brand-new, high-speed bus line with no ride fees would sound attractive at any point, but perhaps especially so for Hoosiers who were soon struggling with pandemic layoffs or hardship. However, because of the precedent set by the three-month promotion, willful ignorance, or both, many riders still try to board for free in 2025. This is despite the efforts of IndyGo’s Transit Ambassadors, the new MyKey system, and many attempts to educate riders about the Red Line’s fare rates.

IndyGo bus rides are free for specific populations, perhaps contributing to the confusion. While the feds require all public transit services to provide free fares to persons over the age of 65 who hold a Medicaid card and individuals with disabilities, IndyGo expands that list considerably.

Veterans, some government employees, college students, children under the age of five, IndyGo employees and their dependents, and IndyGo retirees all ride fare-free.

That’s not all – other parties only pay half fares: some government employees, persons 18 or younger, IndyGo Foundation nonprofit partners, and IndyGo Access customers.

None of this will change with the new fee policy . . . and you’re likely to see a bigger foundation fundraising effort and greater outreach to the community partners to locate and assist riders who are unable to accommodate the fare increase.

MyKey

Let’s talk about MyKey for a moment. The payment system, which works through an app or a tap card available for purchase at the Julia M. Carson Transit Center, is underutilized, especially when considering its benefits. More than one-half (54%) of IndyGo riders use cash; only about one in every five riders (21%) pay fares via MyKey.

Aversions to technology, not wanting to take a trip to the Transit Center, or blanching at the $2 fee associated with obtaining a tap card could all be contributing factors, but IndyGo doesn’t have a definitive explanation as to why riders aren’t using MyKey. Officials have even created a MyKey University, an online portal with typed and visual instructions, an expansive FAQ, and a feedback form. Riders still aren’t biting.

For parties who dislike the sound of a fare increase, MyKey is the solution.

Fares are capped at $4.00 per day or $15.75 for the week through the app, and users receive a small deposit bonus for carrying a balance. The biggest selling point is that, for cash users, MyKey doesn’t just negate the fare spike; it pushes their weekly costs even lower. For a rider who takes five a.m. commute trips, five p.m. commute trips, and three leisure trips per week under the current policy, the total cost is $29.75.

Under the new $2.75 policy, MyKey users taking five a.m. commute trips, four p.m. commute trips, and five leisure trips (if three of those fall on a Friday, Saturday, or Sunday, as MyKey allows riders to ride for free) will only pay $24.75 per week.

Despite the benefits, considering that riders don’t even want to learn how to use the payment system, MyKey fare rates might be the trickiest part of IndyGo’s public outreach campaign – and you should expect an extensive education effort associated with any new fares so as to encourage people to mitigate the impact with this tool. Officials also look to MyKey as a means to encourage fare payments that might have otherwise been overlooked by drivers, who largely have no way of determining who has paid fares and which riders haven’t done so.

Loose Ends and Uncertainties

That’s without getting into the continued uncertainty associated with federal tariffs and complete budget overhauls. Bloomington Transit General Manager John Connell recently told Indiana Public Media reporter Donnie Burgess that he is “cautiously optimistic” about federal public transportation funding. That is, Connell feels all future plans need to come with an asterisk. “There’s no guarantees,” he laments.

The Bloomington Transit GM fears tariff impacts, relaying that bus costs could jump up anywhere between 3.0% to 15 percent. “For example, if we were to place this order for the new buses tomorrow, we’re looking at third quarter of next year for delivery, and there’s a lot that can happen between now and then,” Connell explains.

IndyGo is already experiencing the impacts of tariffs, too. The transit authority’s $125 million bond deal was recently delayed due to market volatility caused by tariff uncertainties. The bonds have since been priced . . . but the deal was originally expected to close in April.

The Indianapolis Local Public Improvement Bond Bank issued the 2025A series revenue bonds to fund the Blue Line Bus Rapid Transit project, refund prior bond anticipation notes, cover capitalized interest, establish a debt service reserve, and pay issuance costs.

Speaking to Bond Buyer reporter Jennifer Shea, IndyGo Director of Communications Lisa Soard attributes the change in attitude to “a brief window of clarity on tariffs and underlying economic factors.” The key word is, perhaps, “brief.”

The Blue Line has always represented a significant investment for IndyGo. The route will be the longest bus rapid transit route in IndyGo’s network, spanning 24 miles from Indianapolis International Airport to the eastern edge of Marion County. Soard tells Bond Buyer’s Shea that the project is already “attracting” significant economic development, estimated at $400 million.