Home Asides With surcharge looming, fare media liability could decline

With surcharge looming, fare media liability could decline

by Benjamin Kabak

Over the past few years, as the MTA’s fiscal outlook has remained bleak, news coverage has often focused on its fare media liability. Each year, the MTA recoups around $50-$60 million in unused fares when riders purchase pay-per-ride cards but fail to zero them out. As the discount math gets tougher, the amount recovered increases.

Amidst last year’s fare hikes, I reported that the MTA still expected to recover $52 million in fare media liability this year, and today, Jim O’Grady at WNYC verifies that figure. Interestingly, though, in his piece, O’Grady talks about the impact of the $1 surcharge.

The MTA hasn’t yet announced when it will implement the $1 surcharge on new MetroCards, but the authority believes the fee will lessen its fare media liability recovery figure. As straphangers have an incentive to zero their MetroCards, the MTA will see that total go down, but on the flip side, the $1 surcharge will generate around $20 million in revenue while reducing the agency’s fare collection costs. The authority currently spends around 15 cents of every $1 in revenue on fare collection costs, and a decrease of even one cent can save the authority hundreds of millions of dollars a year. They’ll forego the unspent rides in exchange for a more efficient collection system.

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limonene April 18, 2011 - 5:09 pm

I know that the MTA is in bad financial shape, but all the same, I’m not looking forward to this surcharge. I tend to re-fill my Metrocards, but I’ve had two go bad on me in the space of a couple of months without doing anything unusual to them. After this takes effect, I’ll have to shell out money for a new card as well as waiting for my refund to be processed.

R. Graham April 18, 2011 - 8:26 pm

All the more reason they need to hurry up with the new payment system.

Alon Levy April 18, 2011 - 5:50 pm

Question: when Walder says the MTA spends 15 cents on the dollar on fare collection, what does he mean? Is this figure true of every agency, or is it an average of very high numbers on commuter rail and lower numbers on the subway? Do the salaries of the ticket punchers and station agents count as collection costs at all?

Bolwerk April 18, 2011 - 7:33 pm

Hopefully this at least does something about littering.

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