Home MTA Economics A three-dollar fare?! A three-dollar fare?!

A three-dollar fare?! A three-dollar fare?!

by Benjamin Kabak

How do tabloids in New York sell papers? By splashing a MetroCard and a $3.00 price tag across the front page.

In something of a worst-case-scenario article, Pete Donohue explores the possibility of a $3.00 base fare if the MTA can’t cover the deficit. He writes:

Metropolitan Transportation Authority CEO Elliot Sander said Monday the authority’s budget crisis will force it to impose “Draconian” fare hikes and service cuts without an additional $800 million. Even after making cuts, the MTA will be short about $600 million, agency figures show.

Filling that gap would require a 24% fare hike for MetroCards, train tickets and tolls – if the MTA applied the increase evenly across every category. The agency hasn’t tended to do that in the past, however. Instead, the MTA is expected to take aim at the base fare for the biggest percentage increase – bumping it to $2.50 or even $3, a Daily News analysis shows.

What this article fails to mention is that now, even with a base fare of $2, a whopping 89 percent of riders pay less than that. The average fare per ride is under $1.40.

So in reality, this doom-and-gloom scenario is unlikely to happen and will not impact a lot of riders even if it were to come to fruition. Rather, the MTA will probably significantly raise the prices on Unlimited Ride cards and scale back the bonus system while raising the base fare to $2.50.

That increase of course isn’t one any of us want, and now is the time to start pressuring legislators to find the money for the MTA.

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17 comments

Marc Shepherd November 12, 2008 - 2:07 pm

That increase of course isn’t one any of us want, and now is the time to start pressuring legislators to find the money for the MTA.

Actually, I think $3 is about the right fare for occasional riders—basically the only people who actually pay that fare—with deep discounts for those who use the system regularly.

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Benjamin Kabak November 12, 2008 - 2:09 pm

Sorry. I was unclear. I meant “that increase” in terms of any lofty fare increase. Ooverall, that isn’t something we want. Can you imagine, Marc, a 30-day unlimited card with a $120 price tag? While that’s still a good deal, psychologically, it wouldn’t fly.

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Marc Shepherd November 12, 2008 - 3:34 pm

Oh, I am not advocating a $120 30-day MetroCard.

But I think the MTA has done a terrible job of explaining what a ride really costs. According to that Daily News article, the average ride today costs $1.35. In 1995, the base fare was $1.50, and I don’t believe there were any discounts or free transfers between bus and subway. In real terms, the fare regular riders pay has stayed flat or gone down. Most people don’t seem to realize this.

So I don’t have any problem with raising the base fare to $3, but making the discount (in relation to that fare) much deeper than it is now.

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Alon Levy November 12, 2008 - 4:31 pm

The MTA is actually running a campaign about that, comparing the inflation-adjusted fare in the 1980s to today’s fare. The fare they give for today is for people who use monthly unlimiteds 70 times a month (the average is 56), but even the actual fares people pay are somewhat lower.

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Alon Levy November 12, 2008 - 4:35 pm

The average fare per ride is under $1.40.

I have to disagree with you here. The fare with a 30-day unlimited at average use (56 times per month) is $1.44, and only a slight majority of subway swipes are with 30-day unlimiteds. The rest are done mostly with pay-per-rides, which average $1.74, or occasionally with the base fare or unlimiteds other than the monthly one.

Anyway, I actually like the warnings of a $3/ride subway. It makes it likelier that the carless majority of the city will accept tolls on the free bridges.

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Benjamin Kabak November 12, 2008 - 4:36 pm

Do you have a source for 56 being the average number of swipes a month? The figure the MTA put out before the most recent fare hike was $1.31.

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herenthere November 12, 2008 - 6:28 pm

Can you point me to the article you wrote a while back that explained how the base fare that goes to the MTA is actually lower than what we pay upfront? (I forgot why it’s $1.4)

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Alon Levy November 13, 2008 - 1:23 am

The New York Times ran an article about it a few months ago:

http://www.nytimes.com/2008/07.....ocard.html

“A truer picture, Mr. Hirsch said, is given by a further analysis that shows that, on average, holders of the 30-day pass make 56 linked trips a month. With the cost of a 30-day pass at $81, that results in an average fare of $1.45.”

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R2 November 13, 2008 - 9:30 am

And through tax savings due to TransitChek, as one example (or that you can reduce taxable income by up to $115), I wonder how much lower this figure would be? Perhaps in the range of $1.31 cited by Ben?

And yes, only recently has the MTA attempted to explain that adjusted for inflation, our fares are flat/lower than pre-1997 when people lived in “two-fare zones” (paying subway AND bus).

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Alon Levy November 13, 2008 - 12:04 pm

I think that’s only applicable if you itemize. Those of us who have to take the standard deduction don’t get a dime from this tax exemption.

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NYC Subway MetroCards $3 to Fix $600M MTA Budget Deficit? | StationStops November 13, 2008 - 8:35 am

[…] SecondAvenueSaga’s Ben Kabak says the NY Daily News is being alarmist , inferring the base MetroCard fare will go to $3 a ride, but concedes that the MetroCard is a very likely target an that $2.50 is a very real possibility. […]

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Duke87 November 13, 2008 - 11:30 am

I think I’d actually like $2.50 a ride with a 12.5% bonus on the pay per ride. Then it would only take 20 bucks to not have extra change left over on the card, rather than the 40 that the current system takes. *stabs metrocard which currently has $1.00 sitting on it* $3.00 would be no good since you can’t make that go in evenly to anything you can pay with a single bill.

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Skip Skipson November 13, 2008 - 1:35 pm

Another thought: You know those kiosks where you swipe to see how much money is on your card or show you when your card expires?

If the MTA wants to show the public average fare of ones unlimited Metrocard, they should make the following change to the display

Card Expires: XX/XX/XXXX Last Used XX/XX/XXXX
30 day unlimited Value: $81
Rides to date: 65
Avg cost per ride: $1.24

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Todd November 13, 2008 - 8:30 pm

Skip, I love the idea, but knowing the MTA, it’d probably cost 200 million to install new machines.

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Second Ave. Sagas | A New York City Subway Blog » Blog Archive » » The fare side of the Doomsday scenario November 19, 2008 - 1:16 am

[…] fare hikes that will compliment the service reductions. While Neuman doesn’t mention the reported $3 base fare, he tosses around a 23 percent fare hike across the board. […]

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Second Ave. Sagas | A New York City Subway Blog » Blog Archive » » Pondering a zone system with $3 fares looming December 23, 2008 - 1:13 am

[…] in November, when The Daily News first reported on the looming three-dollar fare, I figured someone in a position of power would act before things got that desperate. But as the […]

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Prepping for a $2.50 ride :: Second Ave. Sagas | A New York City Subway Blog March 19, 2009 - 1:13 am

[…] these numbers are the same as those from November. At the time, the MTA hinted that fares could cover only half of the projected deficit. The other […]

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