Transit Fare Arbitrage: Case Study of San Francisco Bay Area Rapid Transit (BART) System

TL;DR

This paper explores transit fare arbitrage in the BART system, analyzing pricing inefficiencies, providing a framework and code for identifying arbitrage opportunities, and proposing a unified payment interface.

Contribution

It introduces an intuitive pricing framework for fare arbitrage, analyzes BART's inefficiencies, and offers source code and trip pair data for arbitrage detection.

Findings

Identified trip pairs with significant arbitrage gains

Developed a source code tool for arbitrage analysis

Proposed a unified transit payment interface

Abstract

Transit fare arbitrage is the scenario when two or more commuters agree to swap tickets during travel in such a way that total cost is lower than otherwise. Such arbitrage allows pricing inefficiencies to be explored and exploited, leading to improved pricing models. In this paper we discuss the basics of fare arbitrage through an intuitive pricing framework involving population density. We then analyze the San Francisco Bay Area Rapid Transit (BART) system to understand underlying inefficiencies. We also provide source code and comprehensive list of pairs of trips with significant arbitrage gain at github.com/asifhaque/transit-arbitrage. Finally, we point towards a uniform payment interface for different kinds of transit systems.