Graduated fares with taper

A distance-graduated fare structure may also incorporate a taper, whereby the fare rate per kilometer traveled reduces slightly as the length of the journey increases. The rationale behind such an arrangement is that the value of the trip to the passenger and the production cost for the operator incorporate both fixed and distance-related elements, and these should thus be reflected in the fare paid.

In reality, though, the number of passengers from whom fixed costs can be recovered reduces with the length of the route, and so their allocation should be increased with distance traveled and hence the taper be eliminated accordingly. Thus a fare taper for longer-distance trips is only rational where these can be expected to benefit from a higher commercial speed, and thus have a lower cost of operation per kilometer run.

It should also be noted that a graduated fare structure incorporating a taper disadvantages any passenger making a transfer within his journey without an ongoing travel authorization. This arises because each sector of his journey will have been made at the relatively higher charge per kilometer applicable to shorter trips, and the lower rate for longer trips is not attained.