The Fair Fare Formula™ is a regulated pricing model for transport. The cost of a trip is based on distance. The base fare for passengers and goods is primarily based on the median income in a region. The fares are generally comparable to existing mass transit fares for an average passenger trip and about half freight transport via truck.
The actual fare paid by a passenger may be different from the base fare. Governments may subsidize some or all travel, and discounts for shared trips and disadvantaged groups may apply. The fare formula also allows 25% of the trips to be market priced and offer differentiated service levels that is common with other travel modes offering first-class service.
For example, an undiscounted bus fare in Boston costs $1.70, and the average distance per trip is 8 km (5 miles), which is an average of $0.21 per km ($0.34 per mile). The base fare is adjusted at the start of every year (January 1), and notification of new fares is made at least two months prior to the effective date. Increases to the base fare are capped at twice the rate of inflation.
For the majority of trips, the cost of a trip is based on distance per passenger and not on a fixed price for a trip. Some trip aggregators (such as a university) may provide other fare packages, such as "free trips" by students within the campus, but payments by the trip aggregator to the company would be based on the base fare. To limit induced demand, no "unlimited distance" passes would be offered.