Tuesday, August 11, 2009

How Cheap Should Public Transit Be?

Senior Citizens pay 25 cents to ride the Santa Monica bus. Here is the fare schedule. I was discriminated against and forced to pay 75 whole cents to ride. The Blue Bus claims that 80,000 people ride per day so let's do some arithmetic. Suppose that raise rates by 50 cents per ride. I doubt that anybody would substitute away but suppose that 75,000 people now ride per day. The increase in annual revenue = .5*75000*365 = 13.7 million dollars a year in new revenue.

While I realize that we want to encourage public transit use, do these very low prices encourage too much use? Is this city throwing away revenue?

In New York City, the bus fare is $2.25 , Senior Citizens are charged $1.1 per ride and students are charged $2.

In liberal Berkeley the bus fare to go two miles from my wife's parents home to UC Berkeley is $2.


So, what is Santa Monica thinking?

In Los Angeles , the regular bus fare is $1.25 so this is cheaper than Berkeley and New York but more expensive than Santa Monica.

Some smart student should write a paper on explaining why bus fares differ across cities and what factors predict fare differentials. It appears that Santa Monica and Los Angeles are throwing away revenue during a time of big deficits.

Why am I talking about this? Tonight I took my first bus ride while living in Los Angeles. I enjoyed it and I may do it again some day. I am part of the solution.

Look for me in the New York Times tomorrow. My quote isn't so brilliant but I'm happy to be there. Please send me an email congratulating me. I would be quite grateful.


Piffle Dragon said...

You forget that in Berkeley, Cal students ride for free. We are subsidized nicely by the elderly and working poor.

Peter said...

public transit should be free, and there really should be that much of it, relatively speaking, but what there is of it should be very high quality.

CS Norman said...

Congrats! The Times, so exciting :)

Mary Jones said...

What is the Post editorial board really doing???
First, some background.
As you may or may not know, the TWU (and leader Roger Toussaint) just
received word on their new contract, which was the product of binding
arbitration with the MTA under state law. The Post is of course pissed off
because they hate all working people and think the contract was far too
generous to the scummy union. What's funny is how their editorial and oped
pages have reacted.
Now, of course, the Post is still fuming about the transit strike, which
happened almost four years ago. Back then, they were all about arbitration
In three separate editorials in 2006 they said:

"It's time for binding arbitration."

"In fact, arbitration is the only way to bring this charade to a long-overdue end."

"The MTA says it'll seek binding arbitration, which strikes us as the way to go."

In 2006, they saw arbitration as a punitive end to the strike, and they
wanted to see Toussaint and transit workers punished.
Fast forward to 2009.The TWU and MTA don't come to an agreement. Both sides
agree to go to arbitration. The three-year contract is announced earlier
this week giving workers 4%, 4%, and 3% in the respective years. Now,
this contract is no more generous than recent City contracts, which give
municipal unions 4% each year (despite a $6 billion deficit in the city
budget), but it is fair. Does the Post give kudos to the TA and TWU for
going to binding arbitration? Of course not. Now they think going to
arbitration is bullshit.
Yesterday, Nicole Gelinas, of the always-rational Manhattan Institute (see:
Rudy Giuliani's ideas), wrote a scathing oped about the new contract. The
key graf:
"Arbitration wasn't in the interests of riders or taxpayers: All it did was
put us on the path to these giveaways, in such a way that all the
politicians can avoid the blame. MTA management didn't have to go along with
what Albany and City Hall wanted. It should have just let the union suffer
for a while."
And today, the ever-inconsistent Post editorial board chimed in. And these
guys can't seem to get their story straight. In an editorial claiming that
the arbitration process was somehow fixed, they chided the MTA for letting
the talks go to binding arbitration:
"Then, inexplicably, the MTA let contract talks go to binding arbitration."
So which is it?? Is the Post in favor of arbitration? Or do they abhor it?
Or is the real answer that they have an ideological end that they'll use any
rationale to achieve?? I think we all know the answer.

rafael said...

Here in Brazil, some factors that appear important as defining the level of the tariff are population density and per capita household income.

fpteditors said...

The math means nothing because you have not calculated the cost of NOT using transit. The costs associated with the private auto are astronomical and mostly hidden. It is actually cheaper in the big picture to have free public transport than to pay for all the externalities of the private auto that would have been incurred otherwise.