Fare Hikes

It was a foregone conclusion that subway fares were going up, but the MTA Board has voted to approve a fare hike that will go into effect on January 1, 2011. The 30-day MetroCard will now cost $104, and while the $2.25 base fare will remain the same, the fare bonus will drop to 7 percent on purchases of $10 or more. For more details on the various changes, check out this post.

Interestingly, while the Board realized it’s choices were limited, the meeting itself grew a bit contentious as public speakers were harsh, and the MTA representatives decided to reply. NY1’s John Mancini reports:

Many MTA Board members echoed the sentiment that the state government cannot be relied on rescue the agency from budget shortfalls, and said the only other alternative would have been further service cuts. “We did everything we could do. We have nothing left to do,” said board member Susan Metzger. “I would rather have expensive fares than no service.”…

However, several public speakers who addressed the board went on long tirades accusing the agency of being more concerned with its Wall Street investments than the concerns of transit riders. Two speakers even referred to board members as “rich scumbags” and demanded that the board members be fired.

Board member Norman Seabrook said he also opposes the fare increases, but he criticized the harsh tone of the public speakers. He said the state Legislature would give more aid to the MTA if it was faced with the possibility of a transit shutdown. “Let the system crash. I bet you dollars to doughnuts that they won’t let that happen,” said Seabrook.

While Seabrook’s suggestion is a risky one, I’ve long wondered what Albany would do if the MTA Board allowed the authority’s system to crash. I believe the Board members could be charged with a breach of their fiduciary duties, but it would force Albany’s hand.

But for now, what’s done is done. Come January 1, 2011, we’ll be paying more to ride the subways. Again.

Higher transit fares are coming soon, and there ain’t nothin’ we can to stop it.

Later this morning, at 9:30 a.m., the MTA Board will hold a special meeting to handle the fare hike. The meeting will be streamed online, but I already know what’s going to happen. The MTA officials and board members will talk about how this 2011 fare hike is both Albany-approved as part of the funding package passed last year and a necessary evil. The MTA, despite over $700 million in internal cost-cutting, still faces a sizable deficit, and the authority doesn’t want to cut service. So we pay more.

As the fare hike proposals made the rounds a few months ago, the MTA unveiled a new approach to capturing revenue. Since introducing the unlimited ride MetroCard in the late 1990s, the MTA has suffered from a revenue gap. While the unlimited cards have spurred higher ridership, their frequent use means that the average fare is today lower in inflation-adjusted dollars than it was in 1996.

So to close this inequality in its monetary stream, the MTA put for two proposal: a capped card and an unlimited card with a higher price. The capped card would have come in two denominations: One would have been valid for 30 days or 90 rides for $99, whichever came first, and the other for 7 days or 23 rides for $28. Beyond the typical snark from New Yorkers — “how could it be unlimited if it has a cap?” was a constant refrain — the response to this proposal was loud and swift. Despite the fact that most New York subway riders do not reach the 90-ride limit in 30 days, the loudest among us seemed to hate this proposal.

The Straphangers Campaign were the most vocal opponents of the capped card. They believed that a capped card would not encourage transit ridership. Instead, potential straphangers would underuse their cards early in the month in an effort to ensure that the countdown of swipes wouldn’t reach zero before the end of the 30 (or seven) days. It was, in other words, a lesson in the psychology of payment plans. Would you rather pay a few dollars more for something that is unlimited or a few dollars less while having a constant reminder that the thing for which you paid could eventually reach zero before time runs out? With reservations, I supported the former.

At the various MTA fare hike hearings, the public came out in favor of the unlimited card. People want options, and later this morning, the MTA will vote for the options. “An overwhelming majority of transit customers told us that keeping 7-Day and 30-Day passes that provide for unlimited travel is preferred to a capped pass,” MTA CEO and Chair Jay Walder said in a letter to his board. “It was clear that the unlimited pass has become a fundamental part of life for many users of the NYC Transit system, encouraging ridership by both offering a steep discount and eliminating the need to worry about monitoring how often one uses the system. We heard that message; and in this proposal the weekly and monthly transit passes remain unlimited.”

So what then will the new fare structure be? According to documents released yesterday by the MTA, the 30-day unlimited ride card will cost $104 up from $89 now, and the seven-day card will cost $29, up from $27. The one-day Fun Pass and the 14-day card will be eliminated, and the MTA is targeted the 30-day card to close that aforementioned revenue gap.

The base fare for the pay-per-ride plans will not increase, but that’s merely incidental. Single-ride tickets will now cost $2.50, and the MTA is significantly altering the pay-per-ride discount. Instead of a 15 percent bonus on all purchases at $8 or more, the new bonus will be just seven percent with a minimum purchase of $10. This new math means that a MetroCard user must swipe his or her unlimited ride card at least 50 times over 30 days for it to be a better deal than the pay-per-ride card. Under the current fare scheme with $89 cards, the tipping point is 46 rides. So the MTA is, in effect, adding four rides to the fare equation.

The final kicker is the MetroCard fee. In an effort to cut back on waste and MetroCard costs, the MTA is instituted a $1 surcharge on all new MetroCards purchased from a booth or a MetroCard Vending Machine. Out-of-system purchases will not be penalized, and I’ve been told that the unlimited cards, which are currently one-and-done, will be refillable now.

But the real story behind the fare hikes — and in a sense, I’m burying the lede here — are the toll proposals that have emerged. Spurred on by outraged Staten Island motorists, the MTA is contemplating a proposal in which they do not raise the E-ZPass fares on all MTA Bridges & Tunnels crossings and instead jack of the cash fares. The full breakdown is available here as a PDF.

In The Times today, Michael Grynbaum tackles this discrepancy, and transit advocates are not happy. Rail supporters believe keeping the E-ZPass fare low discriminates against subway riders and doesn’t capture the full costs of driving while representatives from the Bronx in particular allege class warfare. Those who can afford E-ZPass shouldn’t get a discount over those who can’t. I believe however that anyone who owns a car in New York City can afford the $25 payment for an E-ZPass tag. This proposal is just one of two that the MTA Board will consider.

And so the fares will go up again. On January 1, 2011, we’ll be paying more for the subways, and as NBC New York notes, we won’t be getting more. Instead, we’ll be paying more to ensure that service levels do not dip any lower. In a city that sees over five million subway rides per weekday, that is a sad commentary on the state of political support for New York’s transit system.

Now that the MTA’s fare hike hearings have ended, the waiting game begins. We wait for the MTA Board to meet; we wait them to vote on the fare hike; we wait for the fare hike to go into effect. From the sound of things, New Yorkers will also be waiting not so expectantly for the first triple-digit MetroCard in subway history.

According to MTA CEO and Chairman Jay Walder, public sentiment is firmly behind maintaining the MetroCard status quo albeit with higher prices. As City Room reported, Walder discussed the fare hike hearings earlier this week while speaking with the New York Building Congress. “It’s safe to say there hasn’t been a tremendous amount of enthusiasm for the capped pass,” he said.

As part of its fare hike offerings, the MTA had put forward two proposals — a capped and an uncapped one. Under the capped proposal, the more expensive offering would cost $99 and would be valid for either 30 days or 90 rides, whichever came first. According to the MTA, only a very small percentage of subway riders swipe their cards 90 or more times a month, but the MTA’s justification for the capped proposal, as I explored last week, has seemed sparse.

Under the more traditional fare hike, the MTA would retain the 30-day unlimited card, but the costs would shoot up even higher. The 30-day card could cost $104 while the seven-day card will cost $29. Under both proposals, the little-used one- and 14-day cards will be eliminated entirely.

According to Walder and the MTA’s analysis, the fare hike, which would send the cost of 30-day cards up by nearly 17 percent, impacts those who can better afford to pay. “One of the points about the 30-day pass is that the median household income for the 30-day pass is nearly double the household incomes for some other products,” Walder said.

But many transit advocates dispute the MTA’s assertions on the dueling fare hike proposals. Gene Russianoff of the Straphangers Campaign has been hammering the MTA on its rationale behind the hikes and believes the authority has not answered his questions to the fullest extent possible. “What will it mean to cap the ride? Will it discourage people from buying the pass? Will more people move to pay-per-ride? Will ridership go down? I’d like to know the answers to those questions,” he said to NY1’s John Mancini.

Even MTA Board members, says Mancini, want “to learn more on the fare hike options.” This tidbit about the Board is part of a larger narrative about the MTA’s proposed fare hike. Although Walder continues to insist that the fares must go up because money isn’t flowing in from elsewhere, transit advocates are calling for better solutions. The Straphangers, the Tri-State Transportation Campaign and others have called for tolling solutions, and the Permanent Citizens Advisory Committee to the MTA has done the same.

While PCAC recognizes that the MTA is in dire financial straits, it also objects to “shifting of the burden of support for MTA services increasingly onto the backs of the riders.” The group has called upon the MTA to fight for the restoration of $143 million the state legislature moved from the transit fund to the state’s general fund last year and has asked the MTA to push through East River bridge tolls before trying to raise the fares. These solutions do not appear to be politically palatable right now even as they remain more practical than yet another steep fare hike.

And so we wait. We wait for solutions that do not come. We wait for politicians who do not answer the call. And we wait for the inevitability of higher fares over and over again.

When the MTA issues a fare hike proposal, they usually do so with little to no transparency. The numbers are presented to the public generally as an across-the-board hike put forth to raise revenue by a certain percentage. When the fares went up in 2009, that’s exactly how it played out, and the MTA reached its target of a 7.5-percent revenue increase through a straightforward set of higher fares and a lesser pay-per-ride discount.

This time around, the fare hike proposals are more complicated. The MTA has issued two separate proposals, and each, in addition to including higher rates, has its drawbacks. In one plan, riders would be paying over $100 per month for a 30-day Unlimited ride card. In the other, the 30-day card would no longer be unlimited. Instead, for $99 the card would be capped at 90 rides or three swipes per day.

With these two proposals on hand, many have wondered how the MTA arrived at these two proposals. This week, in a letter, Jay Walder explained his thinking. Generally, he says, the authority is looking for ways to keep the fare increases lower for those lower-income riders while raising the rates for those who can afford to pay. Walder notes that “the median household income for people who buy monthly passes is nearly 75% higher than the median household income for people who pay the base fare of $2.25 [with the pay-per-ride discount] or purchase weekly passes. At the same time, the current fare discounts for the monthly pass users with the highest median income far exceed the discounts offered for the fare products used by lower-income riders.”

To put this in context, the MTA CEO and Chairman offered up some numbers. The average 30-day card user has a household income of $63,000, and if he or she uses the current card 90 times a month — which only seven percent of all 30-day card owners do — the cost per ride is $0.99, a full 56 percent lower than the base fare. If a seven-day card user takes 22 rides — the proposed cap for that card — right now, the price per ride is $1.23. People who can afford to pay more and buy in bulk for a longer period of time benefit under the current scheme, and Walder would prefer to raise those fares to a greater extent.

Under the capped proposal, the fares would begin to reach parity, but those who pay for 30-day cards would still benefit. A seven-day card with a 22-ride cap for $28 would lead to costs per ride as low as $1.27 while a 30-day card with a 90-ride cap for $99 could bottom out at $1.10 per swipe with the uncapped $104 card would offer $1.16 per ride on 90 rides.

With this socioeconomic justification for raising the upper echelons of the time-limited MetroCards more so than the lower, Walder also explains why he is proposing capping rides when no other transit agency does so. Since, he says, only seven percent of 30-day card users exceed 90 rides, the rest of us are subsidizing those riders. A cap would allow the MTA to price the cards $5 lower, and thus, he says, the 93 percent of riders who never reach the cap would save $60 per year.

The final piece of this equation in the debate over a capped vs. a true unlimited card is the impact a capped card would have on ridership. The MTA estimates that the decline in ridership would be negligible as the city’s improving economy will bolster transit ridership anyway, and Walder offers his take on the psychology of a capped card. He believes that if the cap is instituted and “the turnstiles are modified to indicate the number of trips remaining (the exact design is being developed), customers will be more aware of the number of trips they are taking and therefore make informed choices that meet their needs.”

I don’t know if informed choices is the right conclusion to draw here or if we should assume that people would be less willing to use the subway earlier in the 30-day period. If I’m granted a limited number of swipes, will I save them for the latter part of the month to make sure I don’t need to buy a new card before the 30 days are up? Will I simply use all 90 and then purchase another card when I need do? Will a counter telling me how much I’ve used or how much I have left discourage frequent ridership or simply redistribute when we ride based upon how many days and rides are left on my MetroCard? Those are questions I — and seemingly the MTA — can’t answer right now.

So for now, these are the ideas behind the MTA’s proposals. The Board won’t make a decision on which hike to endorse until the public comment period is over, and so we the riding public can still influence the debate. The hike may be a foregone conclusion, but what shape it takes will depend on how we want to ride.

MTA Board members are gearing up for another round of public abuse. (Photo by flickr user azipaybarah)

Whenever the MTA is facing a fare hike, the authority’s board must partake in a charade that most transit advocates consider to be akin to a circus. At public locations throughout the Metropolitan Commuter Transportation District, MTA Board members and agency presidents will subject themselves to countless hours of public abuse as the uninformed masses heap insults upon them. Straphangers, disgruntled workers and grandstanding New York City politicians will take to the mic to gain political points without adding to the discourse, and the MTA is expected to both take it without response and turn public unrest into coherent policy.

This time around, though, the circus has a point for the way we ride rests in the balance. As we learned in July, this year’s fare hike proposal came with a huge hitch: The MTA may very well do away with the Unlimited ride MetroCard. To combat the fact that the average fare today is lower, in inflation-adjusted dollars, than what we paid in 1996, the authority has proposed to cap the unlimited ride cards and eliminate the one- and 14-day cards. The overall proposal looks a little something like this with a $1 surcharge on new cards added as well:

There is, of course, a third proposal that made waves last month. The MTA could institute a scheme where they offer capped and uncapped cards, and the truly unlimited cards could cost around $130 for 30 days. It isn’t a Doomsday scenario, but it’s a big blow to the psyche of New York’s straphangers long used to riding the rails as often as they want for under $100 a month. Even if the $130 scenario doesn’t come to pass — “It’s not going to happen,” Andrew Albert of the NYC Transit Riders Council said — the costs will go up.

Enter the fare hike hearings. In the past, I’ve subjected myself to these hearings, a fate I wouldn’t wish upon anyone, and I’ll likely attend a part of the hearing in Brooklyn next week. They are, to say the least, tedious affairs. They start with the politicians who think they are too important to sit through the hearing and must be heard while people are paying attention. These electeds — the same people who voted to remove $143 million in earmarked money from the MTA’s coffers — will point fingers as “fat cat Board members” and anyone but themselves. It is a lesson in deflecting blame.

Then, the union leaders and disabled riders will bemoan the way the MTA dumps on them. While some of the complaints are valid, the point of the hearings is not to create a free-for-all. The authority is interested in raising the fares by 7.5 percent in a way it and the public think is fair for all. No one likes fare hikes, but they’ve become an evil of the New York City subway system.

Instead of this circus, then, New Yorkers should defend the way we ride. The Unlimited Ride cards ushered in a new golden age of sorts underground. People ride more often than they used to and have come to rely on the subways for shorter rides. It’s easier to justify a two-stop trip when the MetroCard was bought and paid for two weeks ago, and the ride itself actually helps to reduce the average cost of a swipe. To maintain ridership, to maintain the role of the subways as the desired method for travel, Transit should encourage people to ride, and to do that, the Unlimited ride cards should not be cut.

Starting tonight, then, New Yorkers should stand up for their Unlimited ride cards. The MTA Board has to vote on two competing proposals later this month, and they haven’t decided yet which one to implement. If enough people speak up, we’ll keep our unlimited ride cards for a few dollars more. Maybe 90 rides would be enough for everyone, but as soon as straphangers start counting their swipes, the subways seem more like a luxury and less like a vital part of everyday life. Only the circus can save these cards this time around.

After the jump, the full information about the nine upcoming fare hike hearings.