Fare Hikes

Last week, for the first time since the end of December, I had to buy a new 30-day MetroCard, and although I’ve long known that this card would set me back a triple-digit figure, I wasn’t prepared for the sticker shock. That $104 fee is a steep one. For those still using their stockpiled $89 cards, today is a big day for at 11:59 p.m. tonight, the sun will set on any remaining 30-day cards, and those cards will expire.

To remind customers of this sunset date, the MTA sent out a press release yesterday with information on refunds. The authority says that customers still holding 30-day cards can get a pro-rated refund by mailing cards along with a questionnaire back to New York City Transit. The forms are available at subway station booths — if you can find one with a station agent — and on buses throughout the city. They’re also available as a PDF right here. For those who want to take care of their return in person, head to the MetroCard Customer Service Center at 3 Stone Street in Manhattan. I wonder how many people will find their remaining fare cards inactive tomorrow morning.

In other fare hike-related news, Long Island State Senators are upset with the MTA over its new refund policy. When the fares went up, the MTA changed its refund policy. It now charges a $10 processing fee and offers refunds only within 30 days of purchase. Oftentimes, the fee is more than the price of the ticket.

So State Senator Jack Martins from Mineola has called upon the MTA to end this practice. In his press release, he slammed the MTA for the Senate-approved payroll package as well. Calling it an “injustice,” he said, “This processing fee is yet one more gimmick by the MTA to pass on costs to the customers who have already had to bear the burden of increased tickets prices and service cuts. If that wasn’t enough, local businesses, municipalities and school districts have also been hit with a payroll tax to support the MTA. The MTA has showed that it has no problem taking money but refuses to refund it when the service is not used.”

During a hearing today in front of the Senate Transportation Committee, Walder defended the refund fee. He said that it isn’t free for the MTA to process refunds, but that’s almost besides the point. Martins is yet another Senator who is content to take money from the MTA with one hand while bashing them with the other. He doesn’t explain why the MTA shouldn’t institute a processing fee or why they should even bother to accept returns in the first place. It might be a steep fee, but the state’s inability to find creative funding solutions for transit comes with political repercussions.

The Wall Street Journal's chart shows how our MetroCard fares are going up today. (Via)

By the time you read this post, a 30-day MetroCard, just $63 ten years ago, will now set you back a Benjamin and four Georges. The MTA’s pay-per-ride discount will dip to just seven percent on purchases over $10, and the one- and 14-day unlimited ride cards are going the way of the dodo. The MTA says the average fare hike is in line with promises it made to Albany to raise fares by 7.5 percent and generate nearly $400 million in added revenue, but that’s little consolation for everyone who has to, for the third time in three years, pay more and more just to maintain services constantly under attack.

When I started this site back in 2006, the MTA fares were downright cheap compared to their prices today. A swipe of a pay-per-ride card cost just $2, and the bonus was 20 percent on purchases over $10. Today, that bonus has been reduced to just seven percent, and it’s only a matter of time before the MTA eliminates it entirely. A seven-day card cost $24, and a 30-day card set you back just $76. Today, those cards will cost $29 and $104 respectively, and they are the only remaining unlimited ride offerings available. Even worse, today’s fare hike is the third in three years.

As Andrew Grossman of the Wall Street Journal noted in his brief run-down of the fare hikes, the authority has “tried to limit the increase for their lowest-income customers.” Thus, as those of us who buy the 30-day cards “tend to be wealthier commuters with stable jobs,” we’ll be saddled with a 16.9 percent hike while the seven-day card increase is under 10 percent.

But this fare hike is about more than just the numbers. We will indeed be paying more for our cards, and we’ve now scaled the triple-digit point. But the MTA’s new fare-related policies could be just as important as the higher rates. In a press release yesterday, the Metro-North and Long Island Rail Road Commuter Councils highlighted the hidden aspects of the fare hikes. These two organizations are “strenuously opposed” to the MTA’s new measures and for good reason.

Essentially, the MTA is making it harder not to plan ahead. One-way and round trip commuter rail tickets will be good only for 14 days from the date of purchase instead of six months. Ten-trip tickets will be good for only six months instead of one year. Meanwhile, these tickets will be refundable for only 30 days after purchase and now come with a $10 refund transaction fee. As the Commuter Councils note, “in many cases,” the refund with the transaction fee now “equals or exceeds the cost of a ticket.” On-board ticket sales will now come with a fee of at least $5.75. Public transit should be easy, simple and affordable. With more and more policies and higher fares in place, it’s becoming a burden.

Ultimately, the fare hike represents something of a devil’s choice for the MTA. Without it, the authority would be facing a massive $400 million deficit, and it can’t cut services by that much while still providing adequate public transportation. But as the MTA’s budget documents make exceedingly clear, the authority is not out of the financial woods yet. It projects razor thin surpluses for 2011, and odds are good that state tax revenues will come in below expectations again. In out years, the MTA expects to alternate between deficits and surpluses, but good times are not on the horizon.

For now, the fares go up. The break-even point on the unlimited cards — now set to 50 rides — creeps higher, and the pay-per-ride discount drops lower. Both moves are part of the MTA’s attempt to raise the average fare, which is still lower today in inflation-adjusted dollars than it was in 1996. That’s hardly going to make anyone feel better about the higher prices though.

As the city’s economy is slow to rebound, people — the middle class — will have to find $15 a month more for public transit. Without a better solution, without East River Bridge tolls, congestion pricing or more state subsidies, the MTA can only raise fares to generate revenue. Hopefully, in four more years, we won’t be paying $132 for a 30-day monthly, but at the current rate and without more state assistance, the MTA will continue to put more and more of its revenue burden on the shoulders of its riders. We’ll pay tomorrow. We always do.

For all the details on the MTA’s newest rates, check out the authority’s fare hike page. For more on the new break-even point for 30-day cards, check out this November SAS post.

As the MTA struggles to restore subway service in the wake of a paralyzing blizzard, the authority must also cope with the reality of a fare hike. Tomorrow — Thursday, December 30, 2010 — brings with it new fares. The 30-day card will cost $104 and the seven-day card $29. The 14- and one-day cards will go the way of the dodo, and the pay-per-ride discount will drop to seven percent on purchases above $10. Talk about bad timing.

Today, then, is the last day to stock up on pre-hike cards. For pay-per-ride cards, the sky is the limit. Put as much as you can on as many pay-per-ride cards as you’d like to enjoy cheaper rates. But unlimited riders must be ware the sunset dates. The MTA is allowing a very short grace period on cards bought before the hike that remain unactivated. Essentially, you have to begin using your old cards by January 10 to get full value.

Take a glance at this chart:

Essentially, those who buy a card today but start using it after January 10 will not be able to use their cards until the end. Instead, straphangers will have to mail their cards back to the MTA for a refund. My advice is to start using those cards before January 10 to save the headaches of a refund process.

For the authority, the timing of the fare hike could not be worse. The snow storm has left riders stranded and disgruntled, and the MTA has to repair its public image while upping the fares at the same time. I guess the higher fares are better than crippling service cuts, which are, in essence, the alternative, but that $104 price tag certainly looks steep today.

There are enough words on this sign to make Polonius proud.

In eight days, the MTA is going to raise fares. They’re not eliminated the unlimited cards or capping the number of rides one may take in a seven- or 30-day period, and although you and I know this, not everyone in New York is aware of the impending change.

For a piece in amNew York, Theresa Juva tracked down straphangers who had no idea of the structure of the impending fare hike or, in some cases, that the fares were even going to go up. One person she interviewed still believed the rides would be capped. While it’s likely that Juva interviewed more than a few people who knew about the fare hike, that she found so many uninformed or misinformed New Yorkers speaks volumes. But about what?

On the one hand, it speaks volumes about the attention New Yorkers pay to the subways. By and large, they don’t pay any. They still think the MTA had two sets of books, and they’re largely ignorant and willfully so of the goings-on underground. Even though we all feel the effect of subway cuts and fare hikes, too many people fail to educate themselves. Furthermore, when the MTA tries to use its own signage space to communicate with writers, newspaper editorial boards turn those efforts into absurdly stupid controversies that shouldn’t be controversial at all.

But on the other hand, the failure is one of signage. Look at that fare hike sign. I found that one in Rockefeller Center as thousands of harried commuters rushed past, and it’s enough to make a graphics designer cry. The MTA has hung up signs that are chock full o’ words, and it’s impossible to discern info quickly and easily from the signs. The fare hike might be coming, but the inability to decipher signs on the go is a failure not of the public but of customer service.

What the fare hike means for Unlimited ride MetroCards. (Via Capn Design)

I’ve touched briefly upon the new MetroCard math that will go into effect when the fares go up on December 30, but this chart does the job in an easy-to-understand form. Presented by Matt Jacobs at Capn Design, this chart shows how the change in pay-per-ride discount and the steep increase in the price of a 30-day card should change straphangers’ purchasing and riding patterns.

In essence, the change boils down as thus: Currently, pay-per-ride users enjoy a 15 percent bonus on purchases above $8. This led to a true cost per swipe of $1.96 instead of $2.25. In 2011, the bonus drops to seven percent on purchases above $10, and the cost per swipe rises to $2.10. Under these figures, the 30-day MetroCard currently pays for itself on the 46th swipe, but after the fare hike, riders will have to swipe in an additional four times before the card becomes a good value. On the 50th swipe, the cost-per-ride of a $104 MetroCard drops to $2.08.

Jacobs’ chart, available at this site, is a handy tool to help subway riders navigate this confusing math. The final line allows users to input any number to see the cost savings. For instance, I could easily see that those people who swipe 80 times a month now save $67.80 over a pay-per-ride plan and will still save $64 under the new fare scheme. As always, the 30-day card rewards frequent users even as the break-even point rises.

It’s also worth revisiting briefly a post from October that explores how many riders do not reach the break-even point on their unlimited MetroCards. Based on internal MTA numbers, it appeared as though 25 percent of monthly purchasers do not use their cards 46 times or more. The same chart showed that this figure jumps to 36 if we set the cut-off point at 50 swipes. Thus, as the fares go up, either fewer people will be buying cards or more will be wasting money on unlimited ride cards. I bet the truth will lie somewhere in the middle.

Don’t expect to build up that collection of unused MetroCards in anticipation of the looming fare hike, New York City Transit warned today. When the fares go up on December 30, straphangers will have only a few weeks to activate unused MetroCards, but those who count their days properly could still find enough time to buy an extra $89 30-day cards before the price spikes to $104.

The full grace period will run for nearly six weeks as riders who purchase unlimited ride cards will be able to get the full value out of their cards as long as they are activated — that is swiped — no later than January 10. Pay-per-ride cards will not be impacted, and so in the time-honored tradition of hoarding tokens, riders can still stock up on these cards before the bulk discount shrinks.

As far as sunset dates go, those are staggered. In other words, if you purchase one of the unlimited ride cards before the Dec. 30th hike and use it for the first time after January 10th, you will not get full credit for all of your travel. Instead, riders will have to mail the cards back for pro-rated refunds based upon the day you first use them. Unused cards will be refunded in full. The sunset dates — meaning the last day on which previously purchased cards will be valid for travel — are presented in the table below.

As a side note, two of the unlimited offerings — the 1-day Fun Pass and the 14-day card — will be eliminated entirely on December 30, and in the Daily News article about the sunset period, Gene Russianoff takes a shot at the Fun Pass. At $8.25, the price, like the rent, is “too damn high,” he says.

I respectfully disagree. Without the pay-per-ride bulk discount, the fun pass pays for itself on the fourth ride of the day. But since the discount currently kicks in at $8, we have to calculate that deal with a discount. With the 15 percent discount, the cost of a subway swipe is, in essence, $1.96, and so on the fifth swipe, the one-day Fun Pass pays for itself. For high-volume subway riders and tourists trying to get around town, it is — and always has been — a good deal.

The failure of the one-day card is more a problem of marketing than anything else. Because the MTA doesn’t publicize the break-even points for their unlimited ride cards, straphangers never knew on the fly when it made sense to buy a one-day card. My parents loved the one-day card from the get-go in 1999 when it used to cost $4, but today, most frequent subway riders have a long-term unlimited ride card. Thus, the Fun Pass will go the Great Unknown after December 31.