Theoretical Evaluation on the Effects of Changes from a Zonal to a Distance-based Fare Structure Saeed MAADI and Jan-Dirk SCHMÖCKER Department of Urban Management, Kyoto University, Japan {maadi,schmoecker}@trans.kuciv.kyoto-u.ac.jp Abstract We illustrate with a hypothetical transport network that reflects common origin and destination relations in a regional transport network the effects of changing fares from a zonal to a distance-based structure. We take the zonal fare as a base case and model the effect of different fare/km, including non-additive fares, where the marginal price per km is decreasing. The results indicate some general trends that can be expected such as the range of fare in order to achieve similar fare revenue incomes. At this “fare parity point” the total travel time tends to reduce but the flows become less dispersed. Furthermore, in case of non-additive distance-based fare, we show that total utility could be improved at the fare parity point compared to additive fares. Keywords Public transport, Pricing policy, Fare structures, Non-additive fares 1. Introduction 1.1. Background Fare structure changes can have significant impacts on ridership and customer satisfaction and general insights are limited. Schmöcker et al. (2016) describe the need for such analysis since significant structural changes are an important current issue for a number of transport providers/authorities. Specifically experiences from the Netherlands show that changes from zonal to distance-based fare structures can lead to significant impacts for the operator as well as travelers with “some winners and some losers”. There are numerous contributions aiming to establish “price sensitivity” for changes in fare levels (Lam and Zhou, 2000; Lo et al., 2003; Jørgensen and Preston, 2007; Farber et al., 2014), but the available (academic) literature on systematically assessing the effects of more significant fare structure changes such as the changes from a flat or zonal to a distance-based fare system is surprisingly scarce. There are some empirical studies that have shown that distance-based fare structures can improve social equity and transport ridership compared to flat fares (Daskin et al., 1988; Tsai et al., 2008). Farber et al. (2014)