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.”
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