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.