Home Fare Hikes To fix a fiscal problem, unlimited cards become limited

To fix a fiscal problem, unlimited cards become limited

by Benjamin Kabak

For over 12 years, the MTA has been giving away transit trips. When it was introduced back in 1997 and put into circulation in 1998, the unlimited ride MetroCards revolutionized transportation in New York City, but it also drastically lowered the cost straphangers pay per ride. Now, facing a massive budget deficit, the MTA plans to scale back its unlimited ride cards, and the riding public isn’t going to be happy.

The problem is simply one of economics. By charging people a flat rate for a week’s or a month’s worth of subway and bus rides, the MTA is both encouraging use and fiscal abuse. All of a sudden, rides that we wouldn’t make — a two-stop ride to avoid the rain or midtown crowds — are worthwhile because those trips lower the per-trip cost of an unlimited MetroCard.

While more New Yorkers are taking the subway now than at any time since the automobile age, the MTA is making less per ride than they were 15 years ago. In fact, in April 2010, the average non-student fare across subways and buses — and accounting for higher express bus rates — came in at $1.48. In nominal dollars, that’s just ten cents higher than the average 1996 fare of $1.38, and in constant 1996 dollars, the April total was $1.02, a whopping 36 cents less per ride than we paid in 1996 when tokens were the currency of the subway.

Now, as The Times and the Wall Street Journal both detail today, the MTA is trying to combat this money lost to inflation. Andrew Grossman of The Journal uses a messenger service to make the point. Once, messenger services used bicycles to navigate New York, but as the cost of a subway ride decreased and worker’s comp insurance increased, these messengers turned to the subway. Some use as many as 20 MetroCard swipes per day, and they average around 20 cents per ride. Under the new scheme, they would go through a 30-day/90-ride card in under a week.

A Wall Street Journal graphic shows how MetroCard prices are outpacing inflation.

Grossman’s is an extreme example, but it’s clear how the MTA views this fare hike. Although the entire package of fare hikes should generate a 7.5 percent increase in fare revenue, frequent riders who the MTA feels do not carry their share of the funding burden are going to have to pay more. These fare increases, too, are outpacing inflation as well, and in The Times, Michael Grynbaum focuses on how the MTA is cutting service and raising fares amidst a recession.

The MTA is doing away with most bulk discounts and plans that incentivize better transit use. The 30-Day MetroCard will probably sit at $99, just under that psychologically important $100 mark, and off-peak fares on Metro-North and LIRR would be reduced. “Most board members would prefer we don’t just raise everything 7.5 percent,” Mitchell Pally, an MTA Board representative from Long Island, said to The Times. “Yes, we want to raise more revenue, but we don’t want to discourage ridership.”

Others in planning positions at the authority recognize the pickle in which the MTA currently finds itself. They’re trying to figure out how best to adjust fares so as not to discourage riding. “It doesn’t take much to dissuade people who are newly arrived to go back to their old ways if the economic incentives are not as good as they once were,” James Blair, the Metro-North riders’ representative to the MTA Board, said.

Therein lies the rub. The MTA just engaged in a very public plan to cut service. Two subway lines and countless bus stations got the axe, and just six months later, the authority will start to charge more for less. In the past, when fare hikes have come with service increases, the public has grudgingly accepted the higher rates, but I wonder how straphangers will respond this time. Will they hold their elected representatives responsible for abdicating their transit funding responsibilities? Will they turn to their cars and bikes while turning away from the subway system? And will these increases be enough to save a debt-ridden public transit system? Even as I ask the questions, I remain skeptical of the public’s willingness to pay more for less and less and less.

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Andrew July 19, 2010 - 7:50 am

For starters, your headline is misleading. This potential change hasn’t even been proposed yet; it’s just under consideration. Once it’s proposed, it then goes through the public hearing process, after which the MTA Board votes on it. Only at that point, barring any legal challenges, can we say that it’s actually going to happen.

The messenger service example misses the point entirely, because it doesn’t cost the MTA a fixed amount to provide a ride, regardless of time or distance. Rush hour trips cost a lot to provide, especially ones that cover a long distance. But messengers aren’t making long rush hour trips – aside from possibly one in the morning and one in the afternoon, the rest of their trips are off-peak and are probably fairly short. Most of them probably don’t even pass through the peak load point, which means that they can’t even possibly trigger a service increase – and even if they do, there are plenty of cars available, there’s plenty of track capacity and station capacity available, there might even be some train crews available.

Placing limits on unlimited cards won’t make heavy users of the most expensive trips – long rush hour trips – pay any more. It also won’t touch express bus riders, who receive the best bargain of all.

Furthermore, if this is implemented, the impact will be on more than just messengers. People who have to ride a bus at either end of a subway trip, and people who take “unauthorized” out-of-system transfers between nearby stations, will have essentially no trips remaining after their 5-day-per-week commute. So if they have any social life at all that involves travel by subway, or they have to work weekends or make any side trips for work, they’ll have to pay extra. And everyone will start counting rides, insisting on block tickets whenever there’s a service disruption and GO transfers when they have to use a shuttle bus – increasing demand on station personnel just as the MTA is reducing station staffing.

So the MTA is going after the wrong people. I don’t see why the fare can’t simply be raised 7.5% across the board, but if the goal is to target specific groups, then target the ones that cost the agency dearly. Double the express bus fare. Impose a rush hour surcharge. Or, if feasible (and it probably isn’t), implement some sort of distance-based or zone-based fare structure. But don’t explicitly penalize the off-peak rider!

One of the articles last week stated that this would only affect 10% of riders. Only 10% of riders? 10% of riders is an enormous number. I haven’t added up all the numbers from the service cuts, but I’ll bet the recent service cuts materially affect far less than 10% of riders.

Similarly, on the commuter railroads, shouldn’t the peak fares and monthly ticket prices be raised, not the off-peak fares? Off-peak riders cost the agency far less, and off-peak riders are mostly discretionary travelers – if the fare is too high, they’ll stay home or drive. Peak riders have to go to work, and the LIRR fare will still be cheaper than parking in Manhattan.

I’m glad innovative changes are being considered, but I think this particular one is a bit mistake, and I hope it doesn’t make it into the formal fare proposal.

Scott E July 19, 2010 - 8:05 am

It looks like you said just what I did (re: peak/off-peak loading) at the same time. I didn’t see it as I typed it, but I agree with you on the “limited unlimited” concept.

Regarding the elimination of Off-Peak fares on the commuters, there are two schools of thought.
a) Off-peak users are the “casual” riders, not the regulars, so they should pay more. They are mostly local, meaning the train has to be checked much more often. Also, it takes much longer for a conductor to check an off-peak car since he needs to collect and punch tickets, and deal with cash fares and confused customers. On a peak train, a conductor can walk through and check a car full of monthly-pass holders without even breaking his stride.
b) However, this pricing clearly does not encourage peak travelers to alter their schedule to off-peak. A higher peak fare (or separate prices for peak-monthlies and off-peak monthlies) would do that.

Benjamin Kabak July 19, 2010 - 8:07 am

One of the articles last week stated that this would only affect 10% of riders. Only 10% of riders? 10% of riders is an enormous number. I haven’t added up all the numbers from the service cuts, but I’ll bet the recent service cuts materially affect far less than 10% of riders.

Based on the numbers I’ve seen, the 10 percent figure is 10 percent of all 30-day unlimited card users which is approximately 3.6 percent of all subway riders. In other words, 90 percent of those who use 30-day cards don’t reach the 90-ride mark during the course of the month.

Andrew July 20, 2010 - 8:40 pm

You’re right – I stand corrected. It’s 10% of unlimited card users. But that includes 7-day cards as well as 30-day cards (Fun Pass use is negligible) – which together make up over 50% of riders, I believe. So we’re talking about 5% of riders, not 10%.

Still a huge number of people affected. And that doesn’t even count the many riders who wouldn’t actually be affected in any given month but would change their riding patterns (not necessarily in a way that would cost the MTA any less to provide the service!) simply to avoid the risk of hitting the cap.

Scott E July 19, 2010 - 7:53 am

Other than the messenger/delivery-person example above, the limited-unlimited concept just doesn’t make much sense to me. If a person swipes their Metrocard four times a day, logic tells me that at least two of those swipes would be off-peak. Logic also tells me that people don’t choose a 1-2 stop subway ride over a brisk walk if the train is too crowded to fit on.

Capping the unlimited Metrocard usage might discourage off-peak ridership, but it will do nothing to help thin the peak crowds, nor will it generate significant revenue for the MTA. After the costs of reprogramming and testing all the back-end systems (which will soon be replaced anyway) and the inevitable series of public hearings, I wonder if it will benefit the agency at all.

Marc Shepherd July 19, 2010 - 9:32 am

In the past, when fare hikes have come with service increases, the public has grudgingly accepted the higher rates, but I wonder how straphangers will respond this time. Will they hold their elected representatives responsible for abdicating their transit funding responsibilities?

Easy answer. The legislature and the city council have abdicated their transit funding responsibilities for decades, and voters have never held them accountable.

W. K. Lis July 19, 2010 - 10:26 am

Limiting the Metrocard is nuts. If the MTA needs more funds that the powers-that-be won’t subsidize, then raise the price.

Toronto’s Metropass has a $121.00 CAD for unlimited travel in a month. There are discounts available, which lowers it to $111.00 CAD.

Nathanael July 19, 2010 - 5:08 pm

Agreed, this is monumentally stupid. This is an effective elimination of “all-day” and “all-month” passes.

If they’re getting used more often, raise the price.

Heck, switch to the Portland system where the price goes up automatically every year to match inflation.

If the MTA really hates all-day and all-month passes, then it can offer a “90-ride” card. But nobody wants a “90-ride card” which expires at the end of a month.

Al D July 19, 2010 - 10:31 am

Why isn’t this being applied to the unlimited or ‘all you can eat’ monthly commuter rail passes and express buses? These are much more heavily subsidized than the subway fare.

Avi July 19, 2010 - 10:47 am

Because there are likely a lot fewer unlimited-rail users who travel more than twice a workday plus an occasional weekend trip. Capping monthly LIRR/MNR at even 50 rides/month would likely have so little effect to not be worth the hassle to implement it.

Scott E July 19, 2010 - 11:00 am

Because applying it to commuter trains would involve an increase in manpower. Rather than the conductor simply glancing at the ticket, he would have to mark it in some way. Also, monthly rail tickets go by calendar month, not an arbitrary 30-day window, so whether the month is 28 days or 31 days, we pay the same.

Al D July 19, 2010 - 2:04 pm

They should increase the monthly commutation ticket then by 25 or 30% to (i) decrease the subsidy and (ii) end around solving the issues mentioned by Avi & Scott E

John July 19, 2010 - 7:06 pm

Even with express buses, the “break even” point over using a bonus Pay-Per-Ride MetroCard is about 9.4 trips. These MetroCards are mostly used by commuters, which is why they are priced so that you barely break even after a 5-day workweek. If anything, these unlimited MetroCards encourage off-peak express ridership (and local bus/subway ridership).

Shabazz July 19, 2010 - 11:16 am

I too think capping the unlimited metrocard could prove counterproductive and costly, for both the city and the MTA.

Andrew point about reducing staff and free transfers is spot on. How many times have you had to transfer between two trains that weren’t connected (Lawrence street & Jay Street) or (Atlantic Avenue and Lafayette). When there are service disruptions people might really line up for those tickets.

As both Ben and Andrew seem to understand, the unlimited ride metrocard has completely changed the way everyone in nyc uses mass transit. It is naive to think that you could just change it this drastically without drastic effects on the way people live, work and move around nyc.

Frankly, I would rather pay MORE for the piece of mind of having an unlimited card than a limited, bundled one. I wish the MTA offered users a choice:

a) a bundled card at 99 dollars

b) a truly unlimited card ad $115 or something like that.

Many people would go for the unlimited.

oscar July 19, 2010 - 3:14 pm

i like this idea…just give riders a choice.

personally , the ‘capped’ unlimited card would work fine for me (based on whats been rumored as the cap), but I bet plenty would pay more for a truly unlimited card.

SEAN July 19, 2010 - 12:41 pm

In Westchester, the BxM4C may no longer except monthly Metrocards at all if Astorino has his way. The county executive is doing what ever it takes to kill the bus route.

Sharon July 19, 2010 - 3:07 pm

Unlimited ride cards allow people to reduce car use. I would drive to Nostrand and ave u from my house tongi banking if I had to pay 2 fare. with an unlimited ride car I take the bus. Many of the extra rides would not be taken and would reduce overall revenue as most unlimited riders do not use more than the ppt price each month and would use even fewer rides if they had to pay ride by ride nyct has failed to cut costs that the unlimited ride cards allows them to do the current number of token booths still open is a crime. Boarding times on buses are also a crime and costs billions since unlimited were introduced

Alon Levy July 19, 2010 - 4:09 pm

One little nitpick: the graph inaccurately portrays the fare as a continuous line. In fact, the fare jumps every time there’s a hike, instead of rising linearly. This makes the fares look higher at any time except immediately after a hike. For example, in 2002, the fare is portrayed as having risen 8-25% from 1998, where in fact it hadn’t risen at all.

Matthew July 19, 2010 - 8:47 pm

The key point here is the demise of the unlimited MetroCard. I think this 90-ride card would be a valid ADDITION to the current fleet of MetroCards. The unlimited should definitely stay, but the price should go up considerably. Make it easy for people to choose the lower-priced 90-ride card.

W. K. Lis July 20, 2010 - 5:10 pm

If a 90-ride card appears, make sure there is no time limit on on. Like the permanent postage stamp, it should still be good whenever you make use of it. If you use it only twice a week, then it should last 45 weeks.

John July 25, 2010 - 3:08 pm

But that would make it a cheaper version of a pay-per-ride MetroCard. A pay-per-ride MetroCard with 90 rides would cost $176.40 (You are only allowed to refill in increments of $80). If somebody rides infrequently enough so that it isn’t worth it to buy an unlimited MetroCard (like my family), they should be buying a Pay-Per-Ride MetroCard.
I think if it were added to the options of MetroCards, it should expire after 30 days or 90 rides, whichever comes first.

Raymond July 20, 2010 - 6:46 pm

this is why the economy is so f*ck*d up! everything’s going up and people need to hold on to their income.

Andrew D. Smith July 22, 2010 - 5:37 pm

Revenue per ride is meaningless because the cost to the MTA of having an extra rider on any given train is basically zero. The MTA needs to focus on total costs and total revenues — and the elimination of unlimited ride cards doesn’t necessarily help either.

Eliminating unlimited rides will not allow the MTA to run fewer trains or buses at rush hour because commuters will continue to commute normally and crowds won’t shrink. It will kill a lot of off hours riding, but that justs reduces the usage of what’s already an underutilized resource. And no, that reduced usage, won’t allow the MTA to further reduce service. Everything is already so spaced out on nights and weekends that it’s incredibly inconvenient. Politicians simply will not allow them to run one train an hour because it reduces costs.

On the revenue front, you might get people to pay more, in total, by making each ride cost money, but I doubt it. If each ride costs money, then people think about it every time they take a trip and they end up taking a lot of trips. I’d guess that people will pay a real premium for unlimited rides and the ability to not think before leaving home. If I’m right, the MTA would be much better off setting unlimited ride cards at whatever level maximizes revenue.

That said, I doubt they can get all that much more revenue from riders or save all that much more revenue by cutting service (because I don’t think they’ll be allowed to cut much more.) The MTA — and its political overlords — simply need to make the hard choice that they’re going to balance the budget by slashing labor costs. Productivity is going to have to increase dramatically. Salaries and benefits will have to go down. Workers will have to work to 65 and then retire on money that they saved from their own salaries rather than pension money handed to them.


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