Sep
12

Fare Hike ’13: An end to the discounts?

By

Let me pose a question: Why does the MTA hand out discounts on its pay-per-ride cards? Is it to reward transit riders? To encourage riders to stock up on rides to cut down on potentially long lines at the vending machines? Is it a relic of another era in which the MTA had to encourage its customers to switch from tokens to MetroCards? Mediate on that as we ponder a world without discounts.

Earlier this morning, in front of a crowd of high-rollers at a Crain’s New York breakfast, MTA Chairman and CEO asked and answered his own question about the upcoming March 2013 fare hike. While the authority will release the details next month, Lhota’s comments suggested the days for discounts — steep or otherwise — are nearly over. After internal debate about the topic, the MTA is likely going to ask the public to discuss ending fare discounts for pay-per-ride swipes.

According to Lhota, the MTA captures on average $1.63 per swipe in revenue from all riders who pay while the base fare is $2.25. With a meager seven-percent discount and a need to find $450 million, the MTA may wipe out bulk discounts entirely. Such a move, Lhota said, will go “a long way toward capturing revenue.” Plus, he asked of the current percentage, “do we really need to go to that level of a discount?” It’s unclear what such a move would mean for unlimited card users.

Once upon a time, the discount meant two free rides for every 10 purchased, but these days, we’re down to seven percent. Is it low enough for the MTA to eliminate entirely? The Straphangers Campaign, for one, isn’t too sure. Nothing that “eliminating the discount is no different than a fare hike” — which, of course, is the point — the Straphangers worried that doing away with the discount would penalize low-income riders. “The 7% discount on $10 purchases is more accessible to low-income riders,” they said in a statement, “while the seven-day ($29) or 30-day ($104) are a lot of money to have to put up front.”

Of course, the MTA wouldn’t be doing away with pay-per-ride options entirely; they’d just be doing away with the savings of about 15 cents per ride. Unfortunately, low-income riders aren’t in a position to seek out alternate transportation modes over 15 cents per swipe anyway, but yes, as with any fare hike, they’ll bear a heavier burden.

The Straphangers also say that “providing incentives to make bulk purchases of transit encourages greater subway and bus ridership.” That’s long been the party line from anyone regarding MetroCard discounts, but Lhota said he felt subway riders would buy in bulk anyway. Buying 17.75 rides just to get the 18th and 19th for free isn’t incentivizing too many straphangers, and the system’s heaviest users from just about any income bracket will continue to look to unlimited ride cards.

Ultimately, though, a fare hike is a fare hike is a fare hike, and to generate the revenue the MTA is going to look to raise what we pay for the cost of a subway ride. The full proposals will be available in October, and the public hearings will take place in November. Only then we will learn just what that seven percent discount means to New Yorkers.



Categories : Fare Hikes

14 Responses to “Fare Hike ’13: An end to the discounts?”

  1. John-2 says:

    One of the reasons the discounts showed up in the first place was to persuade riders to switch from tokens/cash to Metrocards. I wouldn’t be shocked if the discounts vanish next year, they resurface a short time later as part of an MTA effort to get riders to abandon Metrocards for the planned ‘smart card’ fare payment system.

  2. Brian says:

    Regarding the oft-quoted $1.63 average per swipe: Does that take into account what would be a free transfer if using a pay-per-ride card, instead of an unlimited?

  3. Larry Littlefield says:

    They should replace the discount with a surcharge. The surcharge would reflect how much of what we are paying is going to the past, and has nothing to do with today’s transportation. The face fare could thus be lower.

    You pay in $30. The machine says “you now have a $24 Metrocard. Your sins of the past surcharge is $6.”

  4. Bolwerk says:

    I really suspect The Straphangers are about as likely to be straphangers as the Republikans are to be republicans. :-\

    That said, getting rid of discounts is a little bit dumb. They should feel free to adjust their price point accordingly, but the major benefit to discounts is that they encourage people to make larger transactions, and fewer/larger transactions saves them time, money, effort, and possibly farebeating.

    A surcharge, as Larry suggests (for wildly different reasons), would make sense too, but it’s a bit harder to play up as doing anyone a favor.

    • Larry Littlefield says:

      Sure it is.

      “The bad news is, anyone who will be living here in the future is getting screwed. The good news is that those who were around from 1995 to 2002, when the real fare plunged relative to inflation, got a really sweet deal.”

      Lots of politicians will have to make that argument, lest they be blamed for government that increasingly seems like a worse and worse deal.

  5. Anon says:

    i wouldn’t discount the possibility

  6. Wakefield 1-2-3 says:

    It’s a bum deal for the pay-per-ride users, but after the walloping the unlimited-ride users got last time around, it’s about time the MTA picked out another group of riders to share the burden this time.

  7. Bushwicked says:

    Encouraging people to use transit over a private car or taxi is better for the city, traffic congestion, and the environment. But most people cannot afford to drive and park or pay for a taxi everyday, so maybe a discount isn’t truly necessary given the fiscal realities the MTA faces.
    Unlike other transit systems that charge by distance, you could argue that there already is a discount for those who can only afford to live farther out from Manhattan’s high rent.
    While I always support poorer people over the entitled rich, those who throw money away on lotto tickets and casinos are typically not millionaires. For too many people, getting to work should be a priority over throwing money away on what really is just entertainment. As with all things, it’s really just about priorities.

  8. Michael says:

    The MTA should only use the discounts to promote less costly and labor saving payment methods.

    Since the Metrocards are widely established, the pay per ride discount should be eliminated. To encourage reuse of Metrocards and reduce the use of Metrocard vending machines, the MTA should provide a discount to riders who use the Easy Pay Express cards that automatically refill from a linked credit card. These cards save the MTA money by require fewer ticket machines and purchase transaction fees.

    Also there should be a higher fare for paying cash on a bus. Cash payments are slow and delay bus boarding.

    Also, the MTA should also provide a refillable discount ride card for people with low incomes that could be refilled with cash at any vending machine. Hopefully this would eliminate the need for the disposable single ride tickets while still providing an affordable payment option for those without credit cards.

  9. Alon Levy says:

    I’m annoyed by how the MTA is trying to sell a policy change as a necessary revenue-raising measure. In reality, nothing prevents the MTA from charging $3 for a single-ride but maintaining a large bulk discount and a larger unlimited monthly discount. The same amount of revenue can be generated by a variety of discount ratios as long as the base fare is flexible.

Trackbacks/Pingbacks

  1. [...] MTA Chairman Joseph Lhota let slip yesterday the discussions surrounding the end of the pay-per-ride discount, New Yorkers engaged in a favorite pastime: hand-wringing. The Straphangers Campaign led the charge [...]

  2. [...] so, Lhota last week mentioned that the MTA is considering doing away with the pay-per-ride bonus as part of the March 2013 fare hike. After a few years of sticking it to unlimited ride users, [...]

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