Home Fare Hikes Mourning the day the fares go up

Mourning the day the fares go up

by Benjamin Kabak

The Wall Street Journal's chart shows how our MetroCard fares are going up today. (Via)

By the time you read this post, a 30-day MetroCard, just $63 ten years ago, will now set you back a Benjamin and four Georges. The MTA’s pay-per-ride discount will dip to just seven percent on purchases over $10, and the one- and 14-day unlimited ride cards are going the way of the dodo. The MTA says the average fare hike is in line with promises it made to Albany to raise fares by 7.5 percent and generate nearly $400 million in added revenue, but that’s little consolation for everyone who has to, for the third time in three years, pay more and more just to maintain services constantly under attack.

When I started this site back in 2006, the MTA fares were downright cheap compared to their prices today. A swipe of a pay-per-ride card cost just $2, and the bonus was 20 percent on purchases over $10. Today, that bonus has been reduced to just seven percent, and it’s only a matter of time before the MTA eliminates it entirely. A seven-day card cost $24, and a 30-day card set you back just $76. Today, those cards will cost $29 and $104 respectively, and they are the only remaining unlimited ride offerings available. Even worse, today’s fare hike is the third in three years.

As Andrew Grossman of the Wall Street Journal noted in his brief run-down of the fare hikes, the authority has “tried to limit the increase for their lowest-income customers.” Thus, as those of us who buy the 30-day cards “tend to be wealthier commuters with stable jobs,” we’ll be saddled with a 16.9 percent hike while the seven-day card increase is under 10 percent.

But this fare hike is about more than just the numbers. We will indeed be paying more for our cards, and we’ve now scaled the triple-digit point. But the MTA’s new fare-related policies could be just as important as the higher rates. In a press release yesterday, the Metro-North and Long Island Rail Road Commuter Councils highlighted the hidden aspects of the fare hikes. These two organizations are “strenuously opposed” to the MTA’s new measures and for good reason.

Essentially, the MTA is making it harder not to plan ahead. One-way and round trip commuter rail tickets will be good only for 14 days from the date of purchase instead of six months. Ten-trip tickets will be good for only six months instead of one year. Meanwhile, these tickets will be refundable for only 30 days after purchase and now come with a $10 refund transaction fee. As the Commuter Councils note, “in many cases,” the refund with the transaction fee now “equals or exceeds the cost of a ticket.” On-board ticket sales will now come with a fee of at least $5.75. Public transit should be easy, simple and affordable. With more and more policies and higher fares in place, it’s becoming a burden.

Ultimately, the fare hike represents something of a devil’s choice for the MTA. Without it, the authority would be facing a massive $400 million deficit, and it can’t cut services by that much while still providing adequate public transportation. But as the MTA’s budget documents make exceedingly clear, the authority is not out of the financial woods yet. It projects razor thin surpluses for 2011, and odds are good that state tax revenues will come in below expectations again. In out years, the MTA expects to alternate between deficits and surpluses, but good times are not on the horizon.

For now, the fares go up. The break-even point on the unlimited cards — now set to 50 rides — creeps higher, and the pay-per-ride discount drops lower. Both moves are part of the MTA’s attempt to raise the average fare, which is still lower today in inflation-adjusted dollars than it was in 1996. That’s hardly going to make anyone feel better about the higher prices though.

As the city’s economy is slow to rebound, people — the middle class — will have to find $15 a month more for public transit. Without a better solution, without East River Bridge tolls, congestion pricing or more state subsidies, the MTA can only raise fares to generate revenue. Hopefully, in four more years, we won’t be paying $132 for a 30-day monthly, but at the current rate and without more state assistance, the MTA will continue to put more and more of its revenue burden on the shoulders of its riders. We’ll pay tomorrow. We always do.

For all the details on the MTA’s newest rates, check out the authority’s fare hike page. For more on the new break-even point for 30-day cards, check out this November SAS post.

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Mike December 30, 2010 - 12:23 am

Correction: as the pay-per-ride discount gets lower, the breakeven point on unlimited cards actually gets LOWER, not higher as you state. The reason it’s getting higher now is that the unlimited fare hike is larger than the pay-per-ride discount decrease.

Benjamin Kabak December 30, 2010 - 12:26 am

In terms of the dollars presented in today’s fare hike, that’s true. The MTA is consciously trying to raise the break-even point though. They’ve admitted as much. The correlation between the increase in the 30-day, the increase in the break-even point and the decrease in the pay-per-ride discount doesn’t suggest causation here. That’s my fault.

Linda December 30, 2010 - 2:13 am

I really don’t like the fare hikes at all. It really is going to be putting more trying constraints on people who live and work in this city. It is also just padding a bigger unseen issue. Services is not going to improve, in fact they really are not that great at the moment..

John December 30, 2010 - 9:51 am

Of course, but what’s the alternative?

Scott E December 30, 2010 - 8:04 am

This is a perfect opportunity for the MTA to stage an all-out media assault against Albany, pleading Gov-elect Cuomo to start funding transit before they are forced to hike fares even more. Even if TV and newspaper time is too expensive, they’ve got billboards, ad panels, and PA announcements across the system to get their message across. Instead of. Instead of telling us to log on to mta.info for a complete list of regulations (which I’m sure nobody does), tell us how to lobby our elected officials to fund the MTA.

But the MTA keeps its head in the sand and does nothing. Typical.

Researcher December 30, 2010 - 9:33 am

The problem being that the Governor appoints the people you want to have lobby him.

Scott E December 30, 2010 - 10:04 am

And my wife and I brought our son into this world too. That doesn’t stop him from begging for a raise in his allowance.

Researcher December 30, 2010 - 11:59 am

You won’t fire your son.

AK December 30, 2010 - 9:59 am

$63-103 over ten years sounds like a bundle, but it’s actually only a 5% annual increase (compare this to other cost increases over the past decade– 9% annual for gasoline ($1.52 in March 2000), 9% annual for health care expenses, etc). Would it be nice if anual increases could be kept to inflation? Yes. Are fare hikes inevitable (and reasonable) even if Albany funded the MTA in an appropriate manner? Yes.

I applaud the MTA for targeting these fare increases at those who can most afford the raised rates. Am I personally pleased to be paying $15 more for a monthly? No, but I’d gladly pay that so that significantly less well off New Yorkers can continue to access transit at an affordable price.

Alon Levy December 30, 2010 - 10:31 am

I might applaud the MTA if it didn’t on the one hand complain about its outsized fare collection costs, and on the other hand increase the fare the most on the form of payment that has the lowest collection costs. With large monthly discounts, annual unlimited cards with the fare deducted every month, POP, etc., medium-sized German-speaking cities achieve substantially better farebox recovery than New York, freeing money for social spending.

Al D December 30, 2010 - 10:38 am

I would have preferred the $99 “Limited Unlimited Card” with its proposed cap, something like 90 rides. That $5/month adds up, and as previously disclosed here, the average rider comes no where near the proposed cap.

On another note, Albany needs to actually fund transit and stop stealing money dedicated to transit to pay for who knows what instead. We can only hope that Prince Cuomo will finally be the long awaited Albany reformer.

Charles December 30, 2010 - 10:41 am

his is a perfect opportunity for the MTA to stage an all-out media assault against Albany, pleading Gov-elect Cuomo to start funding transit before they are forced to hike fares even more.

The problem being that the Governor appoints the people you want to have lobby him.

So? Jay Walder has every incentive to be bold, he’s got a multi-year contract. What is Cuomo going to do, fire him? Walder would get his salary without aggravation.

Charles December 30, 2010 - 10:53 am

By the way, even at current fares, a bus/subway ride is still very cheap. In 1995, the fare (token) was $1.50, when the State and City were subsidizing the MTA heavily. Adjusted for inflation in 2009 dollars using the inflation calculator (http://www.westegg.com/inflation/infl.cgi) $1.50 is $2.09. $2.09 is exactly the new fare including bonus $2.25 – 7%. Considering that the users of unlimited cards use them much more than break-even, the average fare paid is more like $1.60 per ride.

That means that the MTA has taken subsidy hits plus has not raised the price of a fare to match inflation. That seems to imply that the organization is being run more efficiently.

Alon Levy December 30, 2010 - 11:06 am

It actually implies that the organization is experiencing 50% more ridership than it did in 1995, with only a small increase in operating hours.

The full story of NYCT fares in recent years is that the introduction of the MetroCard and the pay-per-ride and unlimited monthly discounts caused a large reduction in the real fare, bottoming in 2003. From 2003 onward, the fare has risen much faster than inflation.

Sean December 30, 2010 - 12:23 pm

“Hopefully, in four more years, we won’t be paying $132 for a 30-day monthly, but at the current rate and without more state assistance, the MTA will continue to put more and more of its revenue burden on the shoulders of its riders. We’ll pay tomorrow. We always do.”

I don’t get it. Who else should the revenue burden fall on besides those who use the system?

Brandon December 30, 2010 - 12:46 pm

We can argue the taxation/subsidy/wealth distribution issues until the end of time, but the simple point here is that the downstate counties have a special tax that is supposed to be dedicated to transit, that is being used for other purposes.

Benjamin Kabak December 30, 2010 - 12:48 pm

Mass transit is ineffective if it costs $5-$6 per ride. A proper package of subsidies and tax revenues will lower costs so everyone can use the system while capturing some of the positive externalities that a healthy and vibrant mass transit system generates.

Alon Levy December 30, 2010 - 2:44 pm

The revenue burden should fall on everyone who benefits. The total benefits to drivers coming from the presence of mass transit are enormous – about $7 billion a year regionwide in reduced congestion costs according to the Texas Transportation Institute (link), nearly halving the amount of congestion in the region. There are additional benefits in terms of air quality, GHG emissions, and so on; those could be collected either as externality taxes from all drivers, including a steep congestion fee and a multi-dollar gas tax, or instead given to mass transit as a subsidy.

Chris December 30, 2010 - 11:37 pm

Or instead collected as externality taxes from both drivers and mass transit users, and instead given to those who sit at home, or walk, or bike. Let’s not act as if mass transit use is an environmentally healthy activity.

Alon Levy December 31, 2010 - 11:14 am

Yeah, except there’s an order of magnitude difference between the environmental footprint of a subway rider and that of a driver.


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