Archive for Fare Hikes
With the March 3 fare hike rapidly approaching, the MTA today unveiled the mechanics of the fare hike. Can you stock up on unlimited ride cards as my parents used to do with tokens? And just how is that $1 surcharge the MTA has been threatening with since 2010 going to work? All of that – and more! – below.
To recap, the not-so-fun stuff first: With this fare hike, the base fare will jump to $2.50 with a pay-per-ride discount of just 5 percent on all purchases at or above $5. The 7-day unlimited will cost $30, and the 30-day unlimited will set back regular riders by $112. An express bus ride checks in at $6, and the single-ride cards available only through vending machines will clock in at $2.75.
With the fare hike, the $1 “new card” surcharge will be instituted as well. Each card purchased at a MetroCard Vending Machine, a station booth or at commuter rail stations will cost $1. The MTA says that to avoid the fee, riders should keep and refill current cards. Damaged or expired cards may be replaced at no cost, and those of us who receive pre-tax MetroCard in the mail through a transit benefit organization will not be assessed the $1 surcharge. Those who buy combo railroad/MetroCard tickets also will not be charged that dollar. As with any MTA project, it took the authority only three years since initial reports to implement this fee.
Now what of the question of hoarding? The short of it is that straphangers pretty much cannot hoard cards. According to the MTA, all cards purchased before Monday, March 3 must be activated by March 11 for users to receive the full value. So seven-day cards are valid through March 17, 2013, and 30-day cards are valid through April 9, 2013. What happens if you activate your card after the March 11 date? Glad you asked. So says the MTA:
For unused Unlimited Ride MetroCards purchased prior to the March 3, 2013 fare change, refunds will be made at the purchase price. For partially used Unlimited Ride MetroCards purchased prior to the March 3 fare increase, refunds will be made on a pro-rated basis. Ask for a postage-paid envelope from your bus operator, at the station booth, or download the form at mta.info and mail it to us with your card.
That refund process can be a bit of a pain. So I’d say start using that card by or before March 11 or find someone willing to pay you for that unused card you have lying around your house.
And that’s that. The breakeven point for a 7-day card will be 13 rides and for a 30-day card 48 rides. In that inexorable march of time, the fares will go up. They always do. After all, someone has to pay for this whole thing.
It’s been two years since the last MTA fare hike, but the holiday is over. In a unanimous vote this morning, the MTA Board has approved a fare hike bringing the base fare of a subway ride up to $2.50 and the cost of a 30-day unlimited card to $112. Originally scheduled for January 1, the fare hike will instead go into effect on March 1 due to some favorable MTA financial returns from mid-2012.
The details of the fare hike remain as I reported them last Thursday. In addition to the base fare and 30-day increases, the MTA will raise the cost of a seven-day card from $29 to $30, and the pay-per-ride discount level will move to just five percent but will be effective for all purchases of $5 or more. The MTA has also approved a $1 surcharge on new cards purchased in-system. Such a fee is projected to generate $20 million annually.
While realizing annual savings of nearly $1 billion on the operations ledger, this fare hike is expected to generate $450 million in increased revenue for the MTA. Much of that will go toward funding pension obligations. The next MTA fare hike is on the table for early 2015. And so in one of his last actions as MTA Chair, Joe Lhota saw through a fare hike. How’s that for a mayoral platform?
After a series of public hearings last month, MTA Chairman and CEO Joe Lhota has unveiled his recommended fare hike proposal ahead of Wednesday’s board vote. The package of fare hikes across all MTA properties resembles the one discussed Monday and will generate $450 million in additional annual revenue for the agency.
When the dust settled from the public debate, Lhota had determined that across-the-board increases — instead of the usual steep spike in the cost of unlimited ride cards — would be preferable. The base fare will go up to $2.50 with a 5% bonus on all purchase above $5. The 7- and 30-day cards will increase to $30 and $112, a jump of $1 and $8 respectively. “Customers asked us to minimize increases to the passes and maintain some level of bonus,” Lhota explained in a letter to the MTA Board. “They did not want to see another double-digit percentage increase in the 30-day pass.”
In addition to the fare increases, Lhota has also urged the MTA to adopt the $1 surcharge for new MetroCards. The MTA first announced plans to explore such a surcharge back in 2010, but implementation has been delayed due to some technical hurdles. “By encouraging customers to refill their cards,” Lhota wrote, “this fee will realize an estimated $20 million per year, both from savings from card production and new revenue from the fee.” The fee will not apply to out-of-system MetroCard purchases.
Under the new fare structure, the MTA is lowering the break-even point for unlimited ride cards. Currently at 14 rides for a 7-day card and 50 rides fr a 30-day card, the breakeven point will now be at 13 rides and 48 rides, respectively. Even as riders across the board are being asked to shoulder more of the MTA’s fiscal load, unlimited users are not being asked to take on a disproportionate amount of the increase this time around.
The MTA Board will vote on the fare hikes on Wednesday, and we’ll do it all over again in two years when the next schedule rate increases cross our paths.
A fare hike is coming, and there’s nothing we can do to avoid it. When the MTA Board gathers to meet one final time during 2012 next week, it will voice its concern over yet another rate increase and then vote to jump fares anyway. When I started this site, a 30-day MetroCard cost $76; by March, that figure will be over $110. Just how much over we’ll find out soon.
In today’s tabloids, the word on the fare hike seemed rather definitive. Both The Post and The News ran similar stories on the rate increases. According to those two pieces, the base fare will increase to $2.50 with a pay-per-ride bonus that kicks in with any purchase of $5 or more of just 5 percent. The 30-day card will cost $112 up for $104, and the 7-day card will go from $29 to $30. That mirrors Scenario 4 put forward in October.
From what I’ve heard from sources — and also as reported in The Journal — these proposals aren’t quite proposals. They’re not written down yet, and MTA Chairman Joe Lhota is still floating them as ideas. Here’s how Ted Mann reports it:
Lhota has been calling MTA board members since last week to feel them out about the choices to raise fare and toll revenue. The MTA’s budget requires $450 million from increased fares and tolls in 2013, though the agency now plans to raise $382 million, thanks to better-than-anticipated revenues that prompted leaders to push the fare hike back until March…
One board member said Lhota had seemed to agree with one move to protect low-income riders: lowering the cost at which the bonus kicks in to as little as $5.
Still undecided, one person familiar with the discussions said, is the question of how much to raise tolls on the Verrazano Narrows Bridge between Brooklyn and Staten Island. Holding down the increase on that crossing would require the MTA to make up the revenue elsewhere, possibly by raising tolls slightly more than anticipated on other bridges in the regional system.
So we can conclude that it seems likely that the 30-day MetroCard will be $112, up $36 in six years, and that the base fare will go up. We’re not, obviously, seeing the $125 scenario, and I still believe that proposal was put forward to dull the pain of this “smaller” hike. Still, a fare hike is a fare hike is a fare hike, and unlimited ride card users will be paying much more come March. The past five or six years of fare hikes have fallen harder on their shoulders than on anyone else’s.
Lhota’s need to present a fare hike proposal in a week and a half throws an interesting wrench into the discussions surrounding his potential mayoral aspirations. Even though the 2013 fare hike was set long before Lhota took over the reins, he will be the face of the MTA presenting this proposal to the board and will thus have to be responsible for it. I can’t imagine it’s a political selling point to raise transit fares eight months before a general election while also running for a mayor largely due to the successful response of the MTA to Hurricane Sandy. Think of this note as food for political thought.
As the MTA’s public hearings for the looming fare hike move ever closer, the public comments surrounding the price increases start to sound the same. “How can they do this?” “More money for worse service.” “I’m going to stop taking the train and start driving.” We hear this litany of complaints with increasing frequency, and yet, when the MTA raises the fares, ridership numbers do not decrease. In fact, they’ve gone up over the past decade. Why?
To many, the answer is obvious: Even with subway fare increases, transit remains the cheapest way to get around the city by far, and it’s reasonably efficient too. So far all the bluster, straphangers aren’t about to start shelling out thousands for parking just because the cost of a Metrocard goes up. So the MTA can continue to raise prices forever, especially as other costs increase.
Today at Capital New York, Dana Rubinstein explored this phenomenon of pricing:
Logic tells us that at some point such hikes become unsustainable; excessively high prices deter customers and end up hurting the bottom line, as everyone knows. Except not when it comes to transit. “The answer is, that never happens,” said Jeffrey Zupan, a senior fellow at the Regional Plan Association, in response to a question about the point of diminishing returns for fare hikes. “Obviously if you charged $100 a ride for using the subway, no one would use it and you’d have no revenue. There’d be millionaires on it … if they wanted to use the subway.”
“It’s sort of like talking about the far reaches of the solar system,” said Charles Komanoff, a transport economist. “We are not remotely close to that. You could just as easily say, ‘If people had to swim to get down the staircases to the stations, then they’re not going to ride the trains.’ OK, that’s true, but so what?”
These are people, mind you, who are vigorous advocates of publicly subsidized transit. But with one exception (Robert Paaswell, director of the CUNY Institute for Urban Systems, who said that “if you even mentioned $4, people would panic”) none of the transportation experts I spoke to believed fares could ever realistically get high enough to repel riders in big enough numbers to cost the M.T.A. money. That’s actually the problem, politically: other than the complaints of straphanger advocates, there’s nothing to discourage the M.T.A. (or the governor, who controls the authority) from making up revenue shortfalls with fare hikes. In terms of what the market will bear, the price of a ride can always go up.
Rubinstein gets into some of the economic theory behind elastic and inelastic pricing schemes, but it would take a massive shock to the system to get people to change transportation modes. The real question though concerns the subway system as a public good. It’s not an issue for those who begrudgingly accept fare hikes because they can ultimate afford the additional $96 a year. Rather, it’s for those who can’t, and there’s where government support of transit comes into play.
If the role of a subway system is to move people throughout a wide space efficiently and cheaply (thus encouraging economic growth and easy access to job centers), how much money should governments contribute in order to keep the fares artificially low? That seems to be the underlying issue plaguing Albany, transit advocates and the MTA right now.
In announcing plans for a looming fare hike, the MTA unveiled a complicated slate of options that featured a wide array of potential outcomes. Some scenarios saw the monthly card jump to $125; others saw the base fare boosted to $2.50 with an elimination of the pay-per-ride discounts. In a way, though, those were red herrings, and as MTA head Joe Lhota made clear today, the contours of the fare hike may be a preordained conclusion.
In an interview with WOR on Monday morning, Lhota expressed his belief that the base fare would rise to $2.50, that the pay-per-ride bonuses would remain at a reduced rate and that unlimited card riders would largely avoid the same steep increases they saw a few years ago. “The base fare will probably go up,” Lhota said, “because if it doesn’t go up, it will have a huge impact on the people who take the monthly pass and use discounted fares. I think we should focus on the middle class. We need to focus on those folks and minimize the increase. The majority of people either take a seven-day pass, a 30-day pass or use the discount pass, and I think we need to focus on how to keep the cost as low as possible for them.”
As The Times subsequently noted, such an increase may spare the middle class but would hit the city’s poorest subway riders harder. Nearly 40 percent of riders earning under $25,000 a year use pay-per-ride cards while only 20 percent of those earning more than $50,000 do. It’s hard to assess the impact though because the count of people using pay-per-ride cards and earning under $25,000 hasn’t been released publicly.
While the ultimate decision is up to the MTA Board and Lhota is but one voice, his is a powerful one. Still, there’s time to shape the debate, and that’s what Crain’s New York is trying to accomplish through its editorial this week:
The question at hand is whether single-ride, multiride or unlimited-ride MetroCards should be favored in the new pricing scheme. Although public hearings have yet to begin, popular sentiment seems to be with multiride cards. Even MTA Chairman Joseph Lhota, who at a recent Crain’s forum had frowned on the 7% discount on these cards, is now suggesting that it only be trimmed, not eliminated.
The thinking is that multiride cards are the most commonly purchased and thus should keep their discount to benefit the greatest number of straphangers. But perhaps they are popular because of the discount. It’s illogical to discount a product because it is popular. The purpose of a fare discount should be to induce transit riders to make decisions that are best for the system and the city.
That’s why unlimited monthly and weekly MetroCards should get the biggest break. They empower and encourage people not only to commute but to shop, to socialize, to consume entertainment—in general, to make the most of our vast and diverse city without adding automobile traffic. Unlimited cards are good for the city’s economy, environment and quality of life. They increase ridership, and expanding mass transit’s constituency will translate into more political support for the MTA.
I couldn’t have said it better myself. But this is just one piece of the puzzle. The 800-pound gorilla in the room concerns state support for transit. As has been noted repeatedly by advocates and the MTA, riders are being asked to foot the bill for more and more of the MTA’s budget while state and city contributions do not increase in turn. If mass transit is a public good, that equation should change. To that end, Stefanie Gray of Transportation Alternatives is going to try to set the record for riding to every subway stop on Tuesday in an effort to raise awareness for the issues of funding. She has Joe Lhota’s blessing, some detailed maps of the system, and a Twitter account worth following. If Gray’s ambitious stunt can bring attention to the matter of funding, perhaps we’ll be better off in a few weeks. At least we can dream.
Now that we’ve seen the fare hike proposals and know when the public hearings will take place, the looming transit rate increase seems like a fait accompli. All that’s left is for us to find out who gets to shoulder the load this time — unlimited card users or pay-per-ride users. No matter the outcome, we’ll all get to pay that new $1 new card surcharge every time we opt against refilling a scuffed and old card in our wallets.
Meanwhile, as the inevitable approaches, the region’s transit advocates have sounded off on the proposals. While the Straphangers Campaign has issued a handy chart detailing how much each proposal would cost users of particular cards, a common theme units the various statements issued by the leading players around the city. All of it involves Albany. Let’s take a look.
New York City Transit already has the highest fare box operating ratio in the nation at 53%. That is the share of operating costs covered by fares. MTA Chairman Joseph Lhota said in September that “when you compare the public support given to mass transit agencies nationwide on a per customer basis, New York ranks at the very bottom.
In comparison to New York City Transit’s 53% ratio, the average for large systems nation-wide that operate both buses and subways was 38% in 2011. That’s according to the Federal Transit Administration in 2011, its most recent figures. Looking at big cities that run both subways and buses, the farebox operating ratio in Boston was 38%, Chicago 44%, Los Angeles 27%, Philadelphia 37%, and Washington, D.C. 42%.
Blocking or reducing the fare increase is possible, if we get more help from Albany. One promising plan is to generate new revenue by both raising and lowering tolls on city bridges and tunnels in line with where there is the most and least congestion. Under this plan – developed by a former New York City traffic commissioner Sam Schwartz, known as Gridlock Sam – tolls would go down on some facilities (like the Throgs Neck and Verrazano-Narrow Bridges) and be instituted on others (Brooklyn and Manhattan Bridges.) The State would need to authorize some of tolls.
The 7.5 million New Yorkers who use the bus and subway every day need Governor Cuomo to stop this fare hike. While New Yorkers have suffered fare hike after fare hike, our State government raided hundreds of millions of dollars in transit funds. Governor Cuomo can put a stop to this by increasing the State’s investment in public transit. Treating our MetroCards like a credit card is no way for the State to run a railroad.
Tri-State Transportation Campaign:
Transportation funding is a political problem. City and state legislators make the funding decisions that impact our daily commutes, quality of life, and the region’s economic growth. Yet, stagnant funding contributions, sweeps of dedicated transit funds for non-transit use, and threats to dedicated transit taxes, such as the payroll mobility tax, perpetually undermine the financial outlook of the agency. And, very few legislators are standing up for the transit rider.
Our legislators have to find a solution, not contribute to the problem. The pockets of transit riders are not default piggybanks when city and state elected officials fail to adequately support transit. These increases significantly impact low-income transit users; 1/4 of New York City Transit riders making $25,000 or less rely on a 7% bonus on pay-per-ride MetroCards of more than $10 to stretch their travel budget.
With upcoming state elections and fare increase hearings in November, transit riders should call on their elected officials to find a solution. We don’t need more legislative voices denouncing the fare increases. We need more voices working towards a viable, long-term funding solution. It is time for our legislature to revisit new funding ideas, such as variable pricing and more balanced tolling for the five boroughs.
From the advocates, at least, laying the blame on the feet of politicians is a common theme, and as I said on Twitter on Monday, “If you’re angry over the MTA’s fare hike, vote for politicians that aren’t horrible at their jobs.” But what can we do now?
Even if Albany were to allocate more money for the MTA, it’s not guaranteed to get there. Earlier this year, Andrew Cuomo and his allies in Albany once again stripped the lockbox bill of its teeth, and yet again, transit dollars are vulnerable to state poaching. That is, of course, why the MTA is in this mess in the first place. The state won’t promise to leave dedicated dollars in dedicated accounts and has often re-appropriated MTA dollars to cover other budget deficits. The MTA then is left only with fare hikes as ways to generate revenue.
These statements right now are a true sign of a focus on the cause of the problem, but they cannot stop today. The MTA is set to raise fares again 24 months after the 2013 fare hike goes into effect, and these rider advocates have to spend the next two years hammering home this point. Whether it be congestion pricing, East River bridge tolls or other direct subsidies, the state and city must do more for its millions of transit riders. When will the voters wake up to this reality?
As you, my faithful readers, continue to debate the least worse fare hike option, the MTA has announced the looming schedule of fare hike hearings. At this sessions, New Yorkers engage in
a reasonable dialogue on transit funding mechanisms the time-honored tradition to spewing invective at MTA Board Members while politicians go unchallenged on their lack of transit support. The hearings resemble circus sideshows, but this year, the outcome could determine if pay-per-ride users shoulder the fare burden or if unlimited card users again get the shaft.
The hearings all begin at 5 p.m. at their various locations, and there will be overlap. Thus, MTA Board Members won’t hear all testimony. Registration opens at 4 p.m. and closes at 8 p.m. Speakers are limited to three minutes each. Comments can also be submitted online and via video at a few so-called satellite locations. After your jump, the fare hike hearing schedule. Read More→
There’s a fare hike heading our way, and absent a miracle in Albany, there’s nothing anyone can do to stop it. The Straphangers have rightly pleaded with Gov. Andrew Cuomo to do something, and The Times did the same in Saturday’s paper. This growing chorus of voices calling for more state support may be able to avert a steep hike in 2015, but there’s not enough time for the notoriously slow-moving state political machine to kick in gear before the MTA has to start generating more revenue.
So we, the riding public, are left with trying to make the best of a bad situation. On Monday morning, the MTA will officially unveil the various proposals all aimed at generating a few hundred million dollars a year more, and throughout November, the authority will hear public feedback. Oftentimes, those meetings devolve into a mess of public complaints against the MTA and little of substance concerning the fare hike proposals. But there’s a lot riding on this year’s hike. (Ed. Note: The four scenarios outlined below are confirmed as the ones under consideration by the MTA. Public hearings will take place during the second week in November.)
As I’ve mentioned before, how the MTA approaches this hike will tell us a lot about who’s paying more. Will the MTA once again go after unlimited ride card users or try to bump up the pay-per-ride costs? I looked at this issue last week, and it’s not an easy one. The claims that a pay-per-ride bump would negatively impact those who can least afford to pay are partially borne out by demographics numbers, but even that impact may be overstated. Still, it’s a consideration.
As we wait out the official announcement, enough leaked stories — designed to gauge rider feedback — have led us to know something about the looming fare hike. So from information gleaned from various articles, let’s look at the competing proposals:
|Scenario||Base Fare||Bonus||7-Day Card||30-Day Card|
As I’ve mentioned before, I’d prefer scenario 1, but that’s because I’m a 30-day card user who enjoys the benefits of pre-tax Metrocards each month. According to numbers provided to me by the Straphangers, such a scenario results in a $60 annual increase in transit spending for 30-day card users, a $50 bump for 7-day card users and a whopping $208 increase for pay-per-ride users. That’s a disparate impact if ever I saw one.
Scenarios 2 and 3 lead to considerably more spending by everyone. Under 2, 30-day users would be on the hook for over $200 more per year, and the break-even point would jump to 59 rides, an all-time high. With no increase in the base fare and a small decrease in bonus, pay-per-ride users would likely have to spend around $20 more per year. That’s hardly equitable either.
The new proposal — Scenario No. 4 above — comes to us from today’s Daily News. In his piece, Pete Donohue notes that MTA officials are not likely to eliminated the discount, as, per one Transit official, “the reaction [was] very cool.” With a seven percent bonus at $2.50 per swipe, the effective fare would be around $2.32, and thus, under proposal 4, the break-even point for a $112 30-day card would be 49 rides, one less than the current 50-ride mark on the $104 cards. Signs are, as Donohue notes, pointing the way toward such a scenario.
But let’s toss this one wide open. Though no one wants a fare hike, pick your poison. I’ve opened the poll below and am curious to see how SAS readers would go if given the choice. It might not be ideal, but that’s where we are today.
In 1998, when the unlimited monthly MetroCard made its New York City debut, the MTA priced this item at $63. In the intervening 14 years, the price has risen by $41, and today, that same card costs a cool $104. The MTA has been particularly aggressive in rising the prices for these unlimited ride cards in order to combat declining revenue per trip, but these cards increase subway ridership overall. It’s quite the catch-22, and it’s rearing its head once again.
A few weeks ago, as the MTA leaked word of its looming fare hike plan, it seemed as monthly cards would largely be spared while the base fare would see a big jump and all pay-per-ride discounts would be eliminated. Now, in the face of an outcry over that proposal, a second plan has seemingly emerged that would spike unlimited ride cards considerably. The Daily News, proclaiming obviously that a fare hike will “hit riders hard,” has more:
Bus and subway riders would pay as much as $125 for a monthly MetroCard — a $21 increase — under one of four fare-hike schemes the MTA is mulling, the Daily News has learned. This proposal would increase the price of an unlimited-ride weekly MetroCard to $34 — a $5 boost — and reduce the Pay-Per-Ride MetroCard bonus, sources said. But it would leave the base subway and bus fare unchanged at $2.25, sources said…
The MTA has fashioned four fare-hike scenarios in advance of public hearings set for next month. Each scheme would generate $232 million in additional revenue from bus and subway riders. Two of the proposals would keep the base fare at $2.25. One of these would reduce the Pay-Per-Ride MetroCard bonus from 7% to 5%, charge $34 for the weekly unlimited-ride MetroCard and $125 for the monthly travel pass. The second would ax the 7% MetroCard bonus altogether, increase the weekly MetroCard to $32 (up $3) and jack the monthly MetroCard to $119 (up $15).
As The News reported exclusively last month, the MTA also is considering two other proposals that would raise the base fare a quarter to $2.50. These 25-cent hike proposals would trigger additional fare changes to the MetroCard bonus and the time-based MetroCards.
It’s a bit unclear what the other two proposals look like. Last month, the same Daily News reported that one version of the fare hike would eliminate the bonus entirely while the base fare would jump to $2.50 and unlimited 7-day cards would bump up $1 and 30-day cards $5. It seems as though the MTA is now considering a proposal, mentioned above, to keep the fare at $2.25 while putting the revenue onus on unlimited card users instead.
For personal and policy reasons, I hate that idea. For the past few fare hikes, unlimited card users have gotten the shaft. I understand the MTA wants to recapture what they view as lost revenue from unlimited card riders, but the unlimiteds have also contributed to a marked increase in subway usage over the past two decades. Meanwhile, nearly 47 percent of subway riders turn to unlimited cards, and we shouldn’t be asked to foot the bill every time a fare hike comes along while pay-per-ride users get something of a pass.
It seems likely that the ultimate decision will be made during the fare hike hearings, but the trick is going to be weeding out the noise. Already, the Straphangers, for instance, are saying “enough is enough” when it comes to fare hikes, but short of asking Gov. Cuomo for money that doesn’t exist, they’re not pushing for any other revenue solution. Prices are going to go up; it’s a preordained conclusion. But doing so in a way that spreads the pain is key.