The Citizens Budget Commission believes a high cap on unlimited MetroCards could alleviate some of the MTA’s budgetary woes. (Source: CBC)
I love my Unlimited MetroCard. I’ve been using one for years, and it makes using the subway essentially free. I pay once per month — in my case, on a pre-tax basis — and get a card that simply tells me to “Go.” I can swipe in at Grand Army Plaza and take a 2 or 3 to Franklin Ave. without thinking about the cost or a subsequent card purchase. I can hop on a bus without a thought, and in fact, the more I ride, the better a deal I get from my unlimited card.
In a very real sense, as I wrote half a decade ago, the Unlimited MetroCards ushered in a revolution in New York City transit history. As then-Gov. George Pataki noted in the late 1990s, ”The goal” with these MetroCards “was very simply to empower the rider. Empower the person who takes the subway and the person who takes the bus by giving them the broadest possible range of options as to how they want to choose to use the mass transit system.”
And it worked. The average cost per ride a subway rider must pay declined precipitously, and only recently, through aggressive fare hikes, has the MTA clawed back revenue it lost to these unlimited cards. Still, the MTA drew in more in inflation-adjusted dollars in 1996 before unlimited ride cards were introduced than it does today. Furthermore, ridership has spiked — to over 6 million per day at times during peak ridership seasons last fall — and the MTA’s fare discounts push ridership.
But has the unlimited ride card outlived its useful life? That’s the question New York City’s Citizens Budget Commission posed recently. The independent group argues that, with ridership up and demand greater than subway supply, the MTA could incrementally rollback the incentives from the unlimited ride cards. After all, in the 1990s, the agency had to incentivize riders to return to a restored system, but today, the system sells itself. By capping unlimited ride cards at levels beyond the reach of all but the power users, the MTA could, they argue, draw in an additional $93 million a year.
Here’s their take:
The need for increased fare revenue need not be met exclusively through current practices of raising base fares and adjusting discounted prices. The MTA can generate revenue by capping the number of rides permitted on the 7-day and 30-day passes. Unlike recent fare increases hitting nearly every straphanger, the caps would provide needed revenue while affecting fewer riders, many who now enjoy very deep discounts, and would still retain heavily discounted fares.
Based on data provided by the MTA for October 2013, riders used 7-day passes for 45 million rides per month and 30-day passes for 66 million rides per month. These rides can be attributed to an estimated 2.8 million 7-day passes and 1.1 million 30-day passes. At a price of $30 the break-even number of rides for a 7-day pass was 13; for a 30-day pass at $112 the number was 48 rides. (Both calculations use the $2.38 fare available with a volume discount.) Rides above these numbers are effectively “free” for the pass holder.
Each “free” ride represented $2.38 in foregone revenue assuming the unlimited passes were eliminated and passengers purchased volume discount rides instead. The monthly number of “free” rides on the unlimited passes is estimated at 28.4 million. This equals about $67 million in foregone revenue monthly, or $807 million annually. Since a significant share of unlimited pass purchasers does not actually use the cards enough to reach the break-even point, these “unused” rides are extra revenue for the MTA. If this extra revenue was also foregone, the net gain from eliminating the unlimited passes would be $619 million annually. But eliminating unlimited passes would be a radical change, causing hardship for many straphangers and undermining the sense of convenient mobility the passes are intended to promote. A fairer strategy is to cap the number of rides on these passes at a number above the break-even point.
The CBC acknowledges that the MTA hasn’t made enough information available to assess the proper cut-off for unlimited ride cards, but they assume a hair over three swipes per day, an exceedingly high volume of rides. Limiting pay-per-rides to 22 swipes per 7 days or 92 per 30 days could lead to eliminating nearly 4 million rides that are free — that is, they are taken after the breakeven point on MetroCards. The unlimited ride cards would still be a great deal, but the MTA would capitalize on very high volume users (and those who try to defraud the system by selling swipes) to the tune of $7.8 million a month.
Part of me hates this idea. The psychological benefits of a true unlimited ride card encourage transit use at a time when New York City’s transit advocates should do all they can to keep residents out of private automobiles. It cuts against the grain of environmental advocacy, congestion pricing proponents and Vision Zero efforts to add any new psychological barrier, albeit a small one, to transit use.
But on the other hand, it’s hard to deny that revenue is revenue. The CBC estimates that only 60,000 30-day card users and around 415,000 7-day card users would exceed their lofty cap, and those figures are only 15 percent of all 7-day card users and 5 percent of 30-day users, relatively small percentages overall. It’s an idea that warrants some debate and discussion. As the CBC says, “Unlike general fare increases affecting nearly every straphanger, the caps would provide financial benefits while affecting only the relatively few riders who use their 7-day and 30-day passes most heavily and would still benefit from discounted fares.”
44 comments
There is an economic concept of elasticity:
Some demand is very sensitive to the price – we call this elasticity
Some demand is fairly incentive to the price – this demand is said to be inelastic.
When the weather is freezing, a doubling in the price of heating oil will deter few people from heating their homes, while a doubling in the price of tickets to London or the price of a particular wine will have a much more profound impact on how much of that wine/flights to London will be purchased.
Ideally mass transit should be free – it would be good for the users, good for the economy as people’s mobility would not be limited by transit costs and the roads would be less congested, and good for drivers as many people would not be driving. Consider what portion of the fares paid go toward fare collection. Years ago many roads were “turnpikes” where all users were charged. We now recognize that providing road usage for but an annual vehicle registration fee benefits the public while eliminating the drain/cost of toll collection. The non-collection of fares on the SIRR for all but those headed to the ferry terminal is a positive example of encouraging mass transit use and saving on fare collection.
While free mass transit is not feasible at this time as revenue is needed, one must look at the balance to be struck. The question is how to charge users without discouraging use. People are going to have to go to work, so the demand for transit for commuting is very inelastic. The demand/usage for other purposes is elastic. By setting the unlimited metro card at the price of the of the commute, one is capturing the inelastic part of the demand while not discouraging the inelastic (discretionary part).
Consider:
a person swiping a metrocard 22x per week is not:
*riding exclusively during rush hour when the system is at its limits
*is not taking advantage of free transfers as they would if they needed transfer
They are hopping on and off mass transit as car users do with their cars as they run errands without a $2.50/charge per stop. These users have either parked or abandoned their cars to be able to accumulate so many swipes – isn’t this what we want?
a person travels to work, makes a round trip errand during lunch and makes a stop on the way home. that could be 5*5= 25 swipes plus weekend usage. Give then a medal – not a penalty.
I feel that doing away with unlimited metro cards is not consistent with the goals that the city wants to achieve.
Moreover, taxes on income discourage work. Taxes on sales discourage shopping, which the economy needs. Taxes on property discourage its upkeep. And tolls discourage travel.
How about we only have those public services that can be financed by gambling and taxes on cigarettes?
Everyone wants to get, and no one wants to pay. To the extent that Generation Greed managed to move things in that direction to benefit itself, the generations to follow will be worse off for their entire lives.
In 2015, the costs of fare collection in developed countries are very low. Roads can be electronically tolled at high speed: in Singapore the congestion pricing system is entirely electronic and does not require cars to slow down, using a system similar to but more advanced than EZ-Pass called the CashCard.
Trains and buses can have proof of payment, with fare inspectors working on consignment. Of course part of the latter system in the German-speaking world is steep discounts for unlimited season passes in order to discourage small transactions. Alternatively, on very busy subway systems such as those of Tokyo, Hong Kong, Singapore, etc., smartcards with on/off tagging can effectively reduce fare collection costs as well; to avoid long lines at TVMs, people can be billed automatically using a smartcard-phone or reload at home over the Internet using a $50 card reader plugged in to their computer.
Now, compare this to the US. Roads are mostly untolled, leading to very high motorization and congestion levels. The fuel tax is supposed to be a substitute, so people balk at fuel taxes that do not get spent on transportation slush funds; that’s why the US fuel tax is so low Americans have even higher motorization levels, driving gas guzzlers. When tolls do exist, there’s manual collection, even in urban areas. Buses require the rider to pay the driver, leading to long dwell times at stops. Commuter trains have multiple conductors. Monthly passes exist, but don’t offer enough of an incentive, so instead a lot of people just buy tickets a few at a time, requiring more TVMs and station agents. POP exists on light rail, but not on subways, because defense contractor Cubic lobbies for faregates.
This doesn’t just make transit more expensive to run – it makes it worse. On commuter rail, the operating costs are so high that trains don’t run frequently off-peak. The aversion to POP is leading Boston to require people to board only from the front door on some light rail lines, slowing them down. The faregates are an especial problem on new systems: in Vancouver, Cubic lobbied for faregates and a new smartcard, both of which have been botched, and this is causing people to sour on the otherwise-competent transit operator in advance of a referendum on a new tax to fund system expansion; thanks to Cubic, Vancouver may not be able to tax itself to pay for a subway to replace North America’s busiest bus corridor.
Have they calculated how much FREE revenue they get from all the people who reflexively purchase unlimited cards but don’t use the minimum number of rides required to make it worth it?
Due to, among other things, the weather, I spent most of January and February telecommuting – with an underutilized unlimited card in my wallet. If I bring it to an agent, will they refund the unused portion of my card?
It’s a rhetorical question. Of course they won’t. They seem to prefer discouraging ridership, and making people’s commuting time longer by cuing us up at MetroCard dispensing machines. How ironic that after years of trying to encourage ridership, now that so many trains are running so close to capacity, they’re effectively trying to discourage it.
Idiots.
You seem to be conflating the MTA and CBC. Neither is affiliated with the other, and only one is advocating for this plan. If you read the full CBC post, you may find this idea not as bad as you think. Still, it’s practically a political non-starter, and as Ben said, at odds with long-term goals.
Point taken. Mea culpa.
I thought the CBC was the Canadian broadcasting company & not this lame excuse for transit policy making. LOL
No, but you can report it lost if you paid for it with a credit card, and the prorated value will be reimbursed. I think only once per year though.
That’s a great point.
Also it seems penny wise, pound foolish, to in anyway reduce ridership. We should be focused on increasing the transit system’s value to as many people as possible. The broader and deeper the support, the more likely it will get the political support needed to improve.
I don’t see why pissing off the people that are committed to the system the most makes any sense.
Seems “cap” and “unlimited” are terms that contradict. Average is 57.5 rides per month. That’s commuting plus a handful of additional trips. Does the average user truly benefit from the “unlimited” price? Seems no. The so called “power user” does. Why not convert the unlimited program to the EasyPay Express plan. There will be impacts on power users – messengers, businesses with delivery – yet a new industrial program could be developed for those whose business leverages our transit system.
This plan would be terrible for:
Commuters who take three buses to work (or bus-subway-bus).
Commuters who drop off and pick up children at school or day care along the way to work.
Nannies who are given an unlimited metrocard by their employer and expected to take the children around during the day.
Commuters who attend school, then go to work after school.
Commuters with two jobs daily who take the subway from one to the other.
List is not exhaustive.
It seems the CBC is looking at cell phone carriers and their idea of ‘unlimited’ plans. We all know how well that worked out too.
“The average cost per ride a subway rider must pay declined precipitously, and only recently, through aggressive fare hikes, has the MTA clawed back revenue it lost to these unlimited cards. Still, the MTA drew in more in inflation-adjusted dollars in 1996 before unlimited ride cards were introduced than it does today.”
So the question is how should younger generations be worse off, and in what way, to pay for all the money that wasn’t collected over 15 years?
How should people be made worse off to pay for the tax dollars diverted away from the MTA starting in the early 1990s?
How should people be worse off to pay for the 2000 pension increase?
How should people be worse off to pay for all the years no one was made worse off, and the meter kept running on these deals?
That is the question.
As much as I like the idea of a “Citizen’s Budget Commission” making recommendations on these matters as an independent, unbiased body, their transit ideas as of late have been poor. Remember they released that PATH study last year that basically just recommended fares be doubled so that farebox revenue is brought up to 50% of costs. PATH’s operating costs are sky high and they basically just think riders should be the ones paying for the incompetence at the PA?
It’s not exactly innovative thinking to advocate for closing budget deficits by forcing riders to pay more to ride transit. The CBC should be the kind of organization that can look at the other end of the balance sheet and delve into how the money’s being spent without worrying about angering a constituency. Instead we just get recommendations that stick riders with paying more for less? Nonsense.
Also, it seems that the crux of their estimate here on unlimited cards is based on “anecdotal” evidence?
Anecdotal evidence suggests abuses among unlimited card purchasers such as selling swipes and sharing passes among family members or employees may account for a meaningful share of the high-volume rides.
I think that the amount of new revenue raised by closing these “loopholes” would be relatively low. What capping unlimited cards would certainly do however would be to drive ridership down for discretionary trips on evenings and weekends, which is something I don’t think any transit advocate should support.
There is a problem – once hey get rid of affordable unlimited rides, people will go back to using their cars. I once had a girlfriend in a remote part of NYC, and never would have dated her if I had to pay much extra for my transit. (I traded time for money.) Do we want to risk having people go back on the streets with their cars? It’s not worth it.
Hopefully, the MTA will forgo the revenue, and recognize that it makes more sense to keep power riders in the subway, instead of non power riders in their cars….
“Once hey get rid of affordable unlimited rides, people will go back to using their cars.”
How many people do you believe really trade off between using cars and using transit based on the price of a ride?
Most of the cost of an automobile is fixed – purchase, financing, insurance. Once that money is spent, a car will be used unless parking is prohibitively difficult or expensive (Manhattan). Most transit riders have no car, or have one car that is being used by a spouse, or are going to Manhattan.
I’ve heard a number of people say the rising cost of the MTA was a primary reason they moved out of the city– moving somewhere where they bought a car and of course spent far more money on that than a 30-day unlimited. People aren’t good at comparing costs for these things.
For a more logical comparison though, you also often hear people in Manhattan who don’t have unlimiteds say “we might as well split a cab” because there’s no cost difference between 3 or 4 people in a taxi and 3 or 4 Metrocard swipes for some shorter trips within Manhattan. These kinds of trips may very well shift to taxis, increasing congestion, if unlimiteds are capped.
People lie about things like that all the time. To you about why they moved to themselves about how much it costs to own a car.
If time is money, walking 9 minutes to the bus, waiting 20 minutes for the bus, riding the bus for 20 minutes, waiting 8 minutes for the subway, riding the subway for 40 minutes, waiting 15 minutes for the bus, riding the bus for 10 minutes….. Youve gotta be kidding me, 2 hours to get from Queens to Queens, when it is 20 minutes by car? Only people legally prohibited from driving would use public transit.
You’re right, but the math could change with a price signal (e.g., MoveNY).
It is more about what I said: how many more cars can be squeezed into NYC? We’re at the point where there are too many for them to work very well.
We’re at that point with the transit system too, the MTA claims.
With some kind of dynamic carpooling, it may be possible to squeeze more people into the existing cars. Not sure about the existing trains.
I live in Manhattan, but there are times when I use services like Zipcar to go to places like southern Brooklyn or the outer reaches of Queens. It’s not feasible – or enjoyable – to use public transportation to go to these places. The cost of an automobile for someone like me, therefore, is not fixed.
“There are times when I use services like Zipcar to go to places like southern Brooklyn or the outer reaches of Queens.”
So do I. It appears the free marginal fare with the unlimited ride card doesn’t seem to be attracting you to make these trips by transit.
And knowing what Zipcar charges, and the fact that you have to be conservative with how many hours you reserve for to avoid late payments, it would take a heck of a fare increase for a short and reliable trip for Zipcar to be cheaper.
I really doubt a car comeback is possible. In the 1970s, car infrastructure was relatively new. Since then we’ve probably been at the limit to just how many cars can be supported here. That fact was hidden for a while by lingering perceptions of urban decline, and continued (foolish) investment in car infrastructure that continued into the 2000s and to a great extent still continues.
Of the past 20+ years of growth (500,000 to 1.5 million people, depending waht you believe about Census under/overcounts), probably only Staten Island has meaningfully been driven by car culture.
agreed. Plus what happens once gas prices rise again & flirt with previous levels? The answer is obvious.
Only in NYC will an organization advocate for the sticking it to the transit rider rather than supporting the expanding needs of transit users.
This is kind of similar to the AirTrain JFK’s 10-ride card for $25, which lasts for 6 months. You offer a steep discount on a bundle of rides within a set amount of time. (AirTrain JFK also offers a 30-day unlimited for $40.)
That said, marketing it as a “92 rides in 30 days for $x” package could encourage under-users of their unlimited cards to switch to pay-per-ride, which would be worse for the MTA — and I suspect there are a lot of under-users out there. Particularly because some workplace pre-tax transit programs issue only 30-day unlimited cards, so for those people the breakeven point on an unlimited card is much lower (since they can either buy an unlimited card tax-free, or pay-per-rides with tax).
I realize this idea is most likely a non-starter, so I’m not going to get too worked up, but there HAVE to be other ways besides this.
Personally, I’d love to brainstorm some way to fine door-holders and get that money to the MTA (probably also a non-starter, but idiots who hold doors are the biggest source of train delays and the MTA needs money, so that would solve two problems at once).
The 3 train car I was in this morning had THREE different Poetry in Motion poems and the ENTIRE advertising panel above the seats was dedicated to the MTA’s courtesy campaign. Nothing against poetry, but why isn’t more advertising space on the trains being dedicated to paid ads that bring in revenue?
You assume the demand for subway advertising is being unmet because the supply is used up by essentially house ads. I would propose instead that it’s possible these house ads are there because there is unused supply.
I doubt the MTA controls their advertising inventory with 100% efficiency, but I also doubt that people are banging down the door to pay top dollar for subway advertisements.
Myself and many others depend on the unlimited metro cards. I work at one of the airports and have a lengthy commute involving 2 subways and a bus. Many poorer/”working” class (or whatever it’s called) are already faced with rent as a huge % of our income plus very long commutes. I don’t really care if our subway seems cheap compared to London or DC or if the unlimited cards are cheap for wealthier people. My wife and I will now pay $232 to get around the city on mass transit. We also both have time sensitive jobs which inevitably means another $100 min. collectively we end up paying ea. month for car transport when the MTA treats us to one of their ever-increasing TARFUN days and we won’t make work unless we ditch the subway (or bus) and take a car. It’s hard enough grinding by in this city.
Let the MTA and the region’s planners figure out creative ways to increase revenue. Or take the public’s ideas. And while they’re at, maybe they can learn how to scrub just ONE single subway tile. Or paint something by first REMOVING the existing paint instead of just globbing more layers of paint like idiots. And just how many decades will it take to install subway countdown clocks. In the last 8 years Beijing has already added more track than the entire NYC subway and constructed about 200 new stations. It’d be funnier if it wasn’t so sad.
Leslie Mann to Cameron Diaz in “the Other Woman” – “I went to China! Do you know how far away China is? And it isn’t all Hong kong either.”
It’s a lot easier to build a totally new system that it is to retro fit / refurb an existing one – especially if you still have to operate a service on it.
Plus in China they have particular ways of dealing with NIMBYs that somehow I think won’t be acceptable to most Americans.
Re paint – stripping old paint off costs money. Plus if it’s lead based it’s even more costly and complex to remove.
Let’s talk about the paint. Why do I see what must amount to hundreds of thousands of square feet of paint across the system (in all areas of stations) heavily flaking and peeling to the point of looking like a desolate barn or some blighted house abandoned decades years ago – Then I see, seemingly randomly, certain parts of the stations coated 10 layers deep in paint, with big globs of the paint visible. Often the paint is so thick, the bolts are rendered useless and not able to even be secured. Is this really a lead paint issue?
I am a mechanic by profession and this never ceases to blow my mind. I personally know a handful of MTA rail inspectors and have a little bit of insight into track maintenance, but no insight into what goes on with the painting. I’m not passing judgment on MTA salaries as I don’t anything about that. I’m simply dumbfounded why something would be painted like that.
And building a new system is so much easier? I’m kind of skeptical. How long does it take to build just one new station extension in this city!
If there is lead based paint & it isn’t flaking or airborn, there’s no requirement to have it removed as I understand. That’s why so many older residential buildings throughout the city have such an issue with lead paint.
Okay, then forget China. Paris is adding 200 kilometers of new rapid transit in the next 15 years, mostly underground. The projected cost: $35 billion.
What you are saying, if you think about it, is that transit workers are doing too little work for too much money relative to the among of work you do and the amount of money they receive.
Thus making whatever you provide to them in your job cheaper and better, and making whatever they provide to you in their job worse and more expensive.
“Or paint something by first REMOVING the existing paint instead of just globbing more layers of paint like idiots.”
Don’t complain about fares when you just demanded a lead paint containment area, and the contractor’s environmental engineer, the city’s environmental engineer and an independent environmental consultant to oversee every painter. As I joked when at worked at NYCT capital budget — gee couldn’t we just get the mafia to do this for us?
Don’t complain about fares when you just demanded a lead paint containment area, and the contractor’s environmental engineer, the city’s environmental engineer and an independent environmental consultant to oversee every painter.
Don’t forget all the equipment required such as resporators, decontamination showers, the disposing of of all the contaminated body suits & on & on.
But it is perfectly legal when the paint falls the the ground from the ceiling and is crushed into a million pieces by foot heels.
This is a bad idea. Best way to avoid swipe selling is probably to require unlimiteds be registered by name when they’re bought so inspectors can check if someone’s not the registered owner.
I do think the mta should consider peak/off-peak fares to manage demand, though, and increase the price of unlimiteds. A packed train should pay for itself, and people who don’t need to travel in rush hour should be encouraged to switch to other times.
Who won the Cold War, again?
I’m not sure about other cities this side of the Pond, including embarrassingly the one I live in (I live within working distance of work and have a pay-per-ride), but the practice in Paris and in Zurich they offer both anonymous monthly passes and passes with a photo ID. In Zurich, anonymous cards are anonymous; cards with ID are useful because if you forget your card at home and get nabbed by a ticket inspector, you can later prove that you had a personal monthly pass and not have to pay the fine. Swipe-selling is irrelevant because all of Switzerland operates on POP anyway. Paris has faregates, and such a plague of turnstile jumpers that nobody has to buy a swipe, but it also has inspectors roving in the Metro hallways.
Putting a limit on unlimited cards is like “jumbo shrimp”. They would no longer be “unlimited”. So we are really taliking about eliminating unlimited cards. Let’s call a spade a spade. This would be just like adding a toll to a free bridge. Once it is no longer free, the toll will continually rise. Once the MTA caps these cards, every fare increase will lower the cap until the point when it won’t make sense for anyone to buy one. Once the sales are too low, they will be discontinued.
I’m confused.
Does their revenue assumption calculate that anyone taking more than the proposed cap of rides will continue to do so once there is an extra charge? And then assume that extra charge is revenue for the MTA?
Because that’s not how economics work. All those optional trips don’t continue to happen, they shift to other modes (Citibike, cab, walk), or disappear(one can always stay home).
If I can take 50 “free” trips a month, and anything above that is $2.33, I’m going to be pretty damn careful not to exceed that amount. Sucks for those businesses not within walking distance of home or work I guess.
It would be a safe bet that the CBC is not representative of the riding public.
The MTA New York City Transit budget is $10.1 Billion dollars a year, while this plan would increase revenues by $93 million a year, a mere 0.9% of the budget. In the process it would significantly decrease goodwill (both by users of unlimited passes and people who already have a cynical view of the MTA).
Maybe if this plan would increase revenues significantly (say, 10%) it would be worth considering, but the amounts we are discussing are a rounding error. This clearly isn’t worth it.
Source: http://web.mta.info/mta/network.htm