To Lubricate Street Life, Lower the Unlimited Fare

Yesterday around 10 a.m. I got on the number 3 subway line at Bergen Street in Brooklyn, where I easily found a seat. As usual, I noticed that there was space on the baby-blue benches all the way up to 96th Street, where I switched trains to go to Columbia University at 116th Street. Only the last few stops on the 1 train were crowded.

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This almost daily journey of mine up to Columbia, where I’ve been going a lot lately to research a book, was anecdotal confirmation of what any serious study would probably show you: the city’s transit system, while packed at rush hour, has considerable capacity in the off-peak hours.

While I enjoyed my ease in finding a seat, for the city and for its citizens it would be better if the subway lines were more crowded during non-rush hours. The city’s transit lines are one of its more expensive and valuable pieces of infrastructure. Having more riders means that the taxpayers, who, lest we forget, ultimately own the subway, are getting more value out of this publicly owned piece of infrastructure.

There’s an easy way to do this and that’s to substantially lower the cost of an Unlimited Ride MetroCard so that most residents buy them. This is a far more effective way of encouraging off-peak ridership than lower-cost single fares at off-peak hours, which has also been discussed.

Economists talk about the elasticity of purchases, meaning how price sensitive a purchase is. Commuting to work is very inelastic because most people have to get to work and they will pay what they have to to get there. Sure, in the long run they may move to a different neighborhood if commuting costs are too high, but they won’t change habits much on a daily basis.

Not so with more optional trips. If you are thinking of stopping for a book on the way home, or trying out a new place for lunch, or even sunbathing in a park, then an extra $2 or even $1 will be a significant deterrent. This is a very elastic commodity.
If you have an Unlimited Ride MetroCard, then the cost of an additional trip, once you have committed the "sunk cost," is zero. That’s a good thing for citizens’ quality of life, and a good thing for the economic health of the city.

In just a few weeks, on March 2, we will all be paying more for those unlimited ride cards. A monthly pass, for example, will rise to $81, up from $76. The law of supply and demand being what it is, this means that fewer people will buy Unlimited Ride MetroCards than otherwise would have, and thus fewer people will use the subways.

This rise in price came out of the push earlier this year by MTA CEO Elliot Sander to raise base fares, and the campaign ended exactly the wrong way. Under pressure from Governor Spitzer, the MTA ended up keeping the base fare the same and raising the price of the unlimited ride cards. For some reason, this is more politically palatable.

I have an alternate policy suggestion for next year: let’s drop the price of a monthly Unlimited Ride MetroCard to a breathtakingly low $30. Meanwhile, let’s raise the price of an individual fare to $3. This would push most people to buy the unlimited ride cards, leaving the individual tickets for the tourists and out-of-towners, who are less price conscious and whose money we should be seeking to extract anyway.

Someone about now might be asking what all this has to do with street life. A lot, actually. As we walk around our favored part of the city, it’s easy to forget that an essential part of being able to sip a coffee at a café or stroll along a shopping strip is the thundering tracks underneath the sidewalk. They enable people to live densely, without cars and their necessary parking spaces, and so create the possibility of having many people per square foot of sidewalk, which is in the final analysis the essential component of a livable street. The transit system lubricates street life.

Some transit expert could determine how lowering the cost of the unlimited pass while raising the single fare would impact MTA finances. Such a move might increase the gap between revenue and expenses, and thus increase the need for public funding. But even if that were the case, the city and state should fill any gap, and the public should demand they do so. We accept higher fares with a grudging stoicism, not fully realizing that this our transit system, publicly owned, built and now operated. (We can leave for another day the common misperception that the transit system was originally private. It wasn’t. See my essay here for info on this.)

Higher tax revenues from increased business activity might even make up for any additional necessary funding of the MTA. The main point though, is that this is our transit system. We should start acting like it in our policies.

Photo: petra jane/Flickr

  • Marcus

    London has a very similar system. Single fare tube journeys are an astounding £4 ($8!!) one way (in zones 1 and 2), but drop to £2 peak and £1.50 off peak if you use the Oyster card -TfL’s proximity payment card. Buses are £2 cash, but only 80 pence if you use Oyster. Fares drop even lower with the 7 day (£24) and monthly passes (£93).

  • As usual, Alex is right on the money!

    Unlimited ride passes are the quivalent of free transit for those riders who have become subscribers. Last October, MTA reported that 50.5% of bus and subway rides were made using unlimited passes.

    However, only 0.9% used one-day passess. At $7 a pop, these passes are way overpriced. MTA plans to raise the price of all unlimted ride passes next month, further discouraging transit use.

    Clearly, the proceeds from congestion pricing should be used to stabalize and lower transit fares, and the best place to start is by reducing the price of unlimited ride passes.

    Also, the single ride should be considered a two-hour unlimited ride pass. Then transit passengers could chose the best route, even if it involved walking between nearby subway stations, or using a bus at both ends of a trip.

    While transit professionals are understandly concerned about protecting their revenue base, it is elected officials, like the Mayor and the Governor and the state and city legislative bodies, who should set fare levels. Fare innovations have allowed ridership to soar to unprecedented levels. Raisng fares now sends transit riders the wrong message — don’t ride with us — drive!

  • In Philadelphia, seniors ride free off-peak.

  • anonymous

    If you look at the original pricing of the MetroCard, it was $1.50 for a single ride, $4 for a day pass, $17 for a weekly and $63 for a monthly, which are 2.6, 11.3, and 42 times the single fare respectively. When the base fare was raised to $2, the ratios changed a bit. The monthly was dropped to 38 single rides, the weekly raised slightly to 12 rides, and the day pass raised to 3.5 rides. I do think that the single-ride should become a 2 hour unlimited pass, it would make the system that much more convenient. Plus, it would be nice if MNR and LIRR accepted MetroCards in some form, and unlimited cards could be used for travel in the city on the weekends, and express bus unlimited cards could be used on weekdays.

    The huge discount that London gives for the Oyster is just because it makes it that much easier for the government to track your every subway trip.

  • Larry Littlefield

    Political congrats to the MTA on raising the unlimited ride cards while keeping the base fare flat.

    Before they did so, no one admitted that the unlimited ride cards were a bargain, and the Straphangers claimed that increases in pay per ride cards were unfair to the poor because they could only buy two rides at a time. The unlimited ride cars, advocates said, were only used by the rich.

    Now, all of a sudden, nothing is more important than the unlimited ride cards. The pay per ride cards, those same advocates say, are only used by tourists.

    In addition to getting rid of the fare, not implementing CP and cutting tolls, reducing MTA taxes, and allowing transit workers to retire at 55, we should be demand that the MTA subsidize ferries and run rush hour service 24/7! After all, we (or should I say they) got an “everybody wins” deal under Pataki, didn’t they?

    Time to check Bloomberg to see if the United States has gone bankrupt yet.

  • Jonathan

    Alex, if you commute to work daily on transit, the unlimited card is already a better deal than buying the stored-value metrocards. If you don’t commute to work daily on transit, then either you’re not working, or you’re not working enough to save money by buying an unlimited-ride metrocard, or transit doesn’t take you to work.

    Your proposal first and foremost benefits existing unlimited-ride commuters of all income levels, who will see a $51 reduction in the monthly cost of transit for the same all-you-can-eat service. Perhaps in a follow-up comment you could explain why these people in particular deserve this rebate?

  • mjr

    Alex,

    While I strongly agree with your general point that transit should be funded consistently and progressively, there are several large points left out of your analysis. If we wanted to make better off-peak use of the subways, we should just charge less during those times. The unlimited ride card is great for me and for you, but not for everyone.
    It’s obvious that both tourists and the intermittently employed or those paid in cash use the single fare card. (I believe the number 7% was bandied about during the fare hike debate as the number of trips paid by single-ride cards. Half are paid with unlimited cards, as George points out – mostly monthlies. A typical commuter breaks even between monthly and the bulk purchase cards; those making even a few more trips monthly are better off with an unlimited.)
    Raising the base fare would be both a boon from tourist dollars, and a burden on the truly impoverished. It was a bad idea to begin with, and died a rightful death.
    The only good idea raised during the fare hike debate was to increase state funding (i.e. income tax funding) for the MTA. But that runs into another problem. Most state transportation funds come from Federal disbursals, and Federal transit funding is specifically discriminatory toward New York State. In the Trust Fund funding formulae, New York State is punished for low VMT, and punished again for having a large transit network – the FTA’s cap on aid per transit system seems more responsive to the needs of Boston or Denver than New York or Chicago. That’s national problem that has to change, and change soon, if any state including ours is to take transit expansion seriously.

  • @alex

    While I think that this proposal makes a lot of sense, Alex is overlooking the very important political reasons that the MTA find it easier to raise unlimited-ride prices than to increase the base fare. (The comment about “for some reason” simply begs the question.)

    1. While the unlimited-ride prices are difficult to quantify on a per-ride basis, the base fare is very simple and straightforward and easily understood by the “person in the street.” Increasing the base fare creates an immediate (“headline-friendly”) perception (“$3 for a subway ride!”) while increasing unlimited-ride fares is not as visceral (“50% increase in average subway fares”).

    2. For better or worse, many advocates (political or otherwise) will argue that the poorest New Yorkers cannot put together enough cash at one time to buy the discounted unlimited-ride cards (especially the monthly cards) and that as they tend to live in higher-crime areas, the risk of having a monthly card stolen may be an unacceptable risk as they cannot afford the money (or time) to replace them.

    While I think that some of point 2 is a specious argument along the lines of “congestion pricing is a tax on the poor,” it is not entirely without merit. However, reducing the price of one-day passes (which it is hard to argue are unaffordable by anyone who can afford two single-rides) lowers the price for tourists as well as poorer New Yorkers.

    I suspect that the only solution to this Gordian knot would be something along the lines of the following:

    1. Eliminate single-ride and pay-per-ride cards entirely (this prevents any comparison on base-fare, since there no longer is one).

    2. Reduce one-day pass cost to $6

    3. Allow a one-day pass to be “extended” for a second, third, or fourth day for $5. (These extensions could be made at the time of purchase, or within 24 hours of the current expiration.)

    4. Extending the one-day pass a fourth time (for total cost of $26) converts it into a 7-day pass (i.e. you get two days [weekend] “for free”).

    5. Allow 7-day passes to be extended by one day for $5 (same as one-day passes) but on the fourth such extension (total cost $26 + $20 = $46) convert into 14-day pass (3 more days “for free,” not just 2). Also allow a $20 extension to convert into 14-day pass within 72 hours of expiration, not just 24 hours. (After 48 hours you are probably better off getting a new pass anyhow.)

    6. Allow 14-day passes to be extended by one day for $5 (same as one-day passes), but after four such extensions (total cost $46 + $20 = $66) convert into 22-day pass (4 more days “for free” instead of 3). Again, $20 extension available within 72 hours. Similar extensions convert 22-day passes to 30-day passes for total cost of $86.

    7. Extending 30-day (or longer) passes by $20 (or four 1-day extensions of $5 each) gives you alternately 3 or 4 “free days”, so that extending a 30-day pass to a 60-day pass costs an additional $80.

    A simple comparison of prices for unlimited-ride passes gives the following table for the current prices, prices after upcoming increase, and costs under this “extension” pricing proposal for first period and any additional:

    Days Current Increase Extension-1 Extension-*
    1 7 7 6 5
    7 24 25 26 20
    14 48 47 46 40
    30 76 81 86 80

    While this is not as radical an approach as the Kheel plan, I think it might have some merit, and the innovative “pay as you go” approach to longer-period discounts would probably reduce the complaints about the elimination of the pay-per-ride (although it would surely not eliminate them).

  • Responding to Jonathan:

    I’m thinking of folks like me, whose job schedules don’t match with buying a Unlimited Ride MetroCard. I work full time, but I go between offices in Brooklyn and Manhattan. I only commute to Manhattan two to three times a week. So for me, the Unlimited Ride card only makes sense if I travel a lot on the subway beside just going to and from work in Manhattan. I think there are a lot of people who are like me in various ways. New York City has a lot of people who work from home, or who work different combination of jobs. There are people who walk to work, and thus use the subway only for optional trips. People like that would use the subway a lot more if the price of an Unlimited Ride card was low enough for them to want to buy it.

  • Ed

    The idea isn’t to give a discount to daily commuters, but to entice residents who aren’t daily transit commuters to buy unlimited cards rather than pay-per-ride cards, thus encouraging them to use mass transit more often. If the non-transit commuting residents that keep pay-per-ride cards in their pockets just for occasional use started buying unlimited cards because they were cheaper, revenue might actually go up – a basic supply and demand concept (although that point is certainly higher than $31).

    Basically, price points should be determined by economic principles, not by political ones. Remember when unlimited cell phone plans used to be outrageously expensive, before the companies realized that they could make more money by signing people up for long-term contracts? How’s this for an idea – a 2-year unlimited metrocard for NYC residents, billed at $31/month, with a $150 cancellation fee? Each card would be $744 guaranteed income for the MTA – great levrage for financing. Also a really good deal for transit users.

    Is NYC the only city with a large subway system that does not incorporate a (major) benefit for city residents?

  • Tania Katherine

    I’ve been saying for a long while that the MTA could make a killing (monetarily) by having a ‘late night unlimited metrocard’ for the hours between 11pm and 5am–only. I’d buy daily unlimited cards all the time (as would most of the ‘nightlife’ crowd) if the following two factors were true: they didn’t expire at midnight when I still have 5 more hours of parties and bars to go to and if my normal 45 minute commute home from the LES took under three hours in the late night.

    Hence, why most of the nightlife crowd doesn’t use the MTA and yellow cabs make a killing.

  • Mark

    It is unfair and inaccurate to label those of us who don’t buy unlimited fare cards as tourists and out-of-towners. I am a non-driving NYC resident and I rarely use the subway or bus because I work at home and do most of my shopping locally. That makes my carbon footprint smaller than that of someone who uses transit (or a car) every day. Some of us have deliberately built our lives around walking — why single us out for punishment?

  • Jonathan

    Alex, I understand your point full well, and respect it too, because until recently I was in your position, not taking the subway every day. A $30 monthly unlimited-ride card would have been a no-brainer purchase.

    The problem I have with your policy prescription is that it’s too broad, and as your plan makes MetroCards cheaper for users like you, it also makes them cheaper for daily commuters. It’s like saying “Elderly pensioners can’t afford home heating oil, so let’s fix the price for everyone at fifty cents a gallon.” There’s an argument for that as applied to public transit, too, but I don’t think it’s your argument.

  • Mark (#12)

    I am similar to you in that I rarely use mass transit in favor of walking or in most cases cycling. As a result, I choose to pay per ride, because it is cheaper than buying a monthly MetroCard.

    Regardless, I often spend about $40 a month on transit fare because of snow days or weekend rides or any reason why my bike isn’t practical. If I could have a unlimited monthly card for $31, I would get it, even though I don’t use the subway daily, because it would still be cheaper than paying per ride. Lots of other people who normally buy pay-per-ride cards would also do this, thereby increasing ridership and possibly revenue to the MTA.

  • anonymous

    “I think there are a lot of people who are like me in various ways” is really the core of the argument here, and it’s not a sound basis for anything. After all, our good friends in the city council and state legislature also think there are lots of people like them, people who drive to work in Manhattan in huge black SUVs every morning. And while we’d all love for transit to be cheaper, you can’t really use your anecdotal evidence to argue that it would be a net benefit.

    And Konrad: so suppose you do get the $31 card instead of spending the $40 a month on fares. Well, you just lost the MTA $9 in monthly revenue. And since you now have an unlimited card, you’re more likely to take the subway rather than walk, in the marginal case, so you use the transit system more. More ridership and lower revenue is not what the transit system needs. What the MTA needs to do is recognize that the most expensive riders are the ones at rush hour, because rush hour is what determines peak capacity. So at off peak hours, nights, weekends, and so on, the price could be made lower. It partly makes up for the worse service at those times too.

  • Rob

    Don’t forget the price of a slice of pizza, street dog and lots of other things are unofficially tied to the price of a subway ride.

  • Niccolo Machiavelli

    #15 anonymous has my vote in the caucus. The author though with the “I’m thinking of folks like me” has really grasped the core of why good transportation and land use planning is so problematic in our privatist political culture.

    But Mark’s “why single us out for punishment?” also cuts to the quick. I thought that the first guy Marcus pretty much showed how much lower TA fares are than than London’s.

    That said there are lots of good suggestions here, there are many different ways to slice up the market. Believe it or not the MTA has looked at many of these. It is also much easier to propose acceptable fare cuts of any shape and size than it is to propose fare increases of any shape and size.

    The only thing on the table that brings any new revenue to the MTA is congestion pricing. Put it all to fare cuts if you want, run the system for free if you want, still somebody has to pay something sometime.

  • Stuart

    The most effective enticement to off peak transit use is lower off peak transit fares. An unlimited fare card eliminates the difference and, however cheap, will only marginally effect the time people travel.

  • rhubarbpie

    While that 3 train may be empty, NYC Transit has a long way to go before it’s got enough off-peak service. I often see (and have to figure out how to get on) jammed 1- and 2-line trains at odd hours of the day and night (even hours too!), along with crowded trains on other lines during off-peak hours. I’m all for cheap or free transit, but using it as an enticement to fill up trains that are too crowded already may not be the way to go.

  • Rhubarbpie rightly points out the crowding of the 1 at off-peak times. I’ve already written about it on this site. Alex ought to try to go uptown after school lets out, and the train will be packed. Even where I get off (125th), it’s still cheek to jowl. Some nights I am going home at 9 or later, and the trains are ridiculously crowded. I wish there wasn’t such a big disparity between peak and off-peak service.

    I am a current monthly card holder, but much of the year, I am commuting with the bike and take the train only a few times a week, so I buy a $40 card. I have grown to love the unlimited cards, because some days I am taking three or more trips per day. You can’t stereotype who’s taking the train with what fare cards, because of the huge variety of riders and their needs. I still can’t believe there are people who use change to get on the bus, but I see it all the time.

  • simple

    how about 2 types of monthly unlimited cards…”peak” and “off peak”

    with peak being cheaper of course

  • simple

    how about 2 types of monthly unlimited cards…”peak” and “off peak”

    with off peak being cheaper of course

  • lee

    why not have discounted monthly card that will only work during specified off-peak hours?

  • lee

    great minds …

  • Slopion

    I’m one of those “people like Alex,” except I guess I’m not really like him. I telecommute and only go into Manhattan to work two or three times a week. So I buy pay-per-ride cards. If there were $30 unlimited monthly passes, hell yes I’d get one–but I wouldn’t take a single subway or bus ride more than I do already.

    I agree with othhers here that if you want to encourage off-peak riding, cut the off-peak fare. I don’t buy the argument that a $1 fare is as much of a deterrent to riding as a $2 fare.

  • Huh?

    I don’t get the point of this at all. The reason that certain train lines aren’t crowded at certain times is that, well, not a lot of people need to get between those points A and B at those times. It’s pretty hard to see why this a problem that needs to addressed. I really don’t think there are legions of people being deterred from off-peak riding because the fare is too expensive. It’s off peak because, well, it’s OFF PEAK, ya know?

  • Spud Spudly

    Once more, I was able to identify the author before getting to the second graph. The Tom Friedman of Streetsblog strikes again!

  • Josh

    From the original post:
    “There’s an easy way to do this and that’s to substantially lower the cost of an Unlimited Ride MetroCard so that most residents buy them. This is a far more effective way of encouraging off-peak ridership than lower-cost single fares at off-peak hours, which has also been discussed.”

    Intuitively, I guess this makes sense, but I’m not clear on whether there’s any facts to back up the point that cheaper unlimited ride cards would be more effective at increasing off-peak ridership than lower off-peak single fares.

    From the original post:
    “In just a few weeks, on March 2, we will all be paying more for those unlimited ride cards. A monthly pass, for example, will rise to $81, up from $76. The law of supply and demand being what it is, this means that fewer people will buy Unlimited Ride MetroCards than otherwise would have, and thus fewer people will use the subways.”

    Economically, you’re right, but I have a hard time visualizing a hypothetical frequent transit rider who is accustomed to paying $76 for a monthly unlimited ride card and will balk at the small (in comparison to $76) incremental increase to $81. I know I’m certainly not doing so.

    Anonymous at #4 wrote:
    “The huge discount that London gives for the Oyster is just because it makes it that much easier for the government to track your every subway trip.”

    I don’t buy that. You can buy an Oyster card with cash and replenish its value with cash, just like a Metrocard. There doesn’t have to be any identifying information tied to it. I think they give the discount (which gets bigger the more often you ride) because they want to encourage transit ridership and speed passage through the turnstiles.

    @alex at #8 wrote:
    “2. For better or worse, many advocates (political or otherwise) will argue that the poorest New Yorkers cannot put together enough cash at one time to buy the discounted unlimited-ride cards (especially the monthly cards) and that as they tend to live in higher-crime areas, the risk of having a monthly card stolen may be an unacceptable risk as they cannot afford the money (or time) to replace them.”

    If you buy a monthly unlimited ride card with a credit card (yes, I know I’m going against my earlier point about the anonymity afforded by paying with cash), the MTA will refund you the remaining value of a lost or stolen card.

    Tania Katherine at #11 wrote:
    “I’ve been saying for a long while that the MTA could make a killing (monetarily) by having a ‘late night unlimited metrocard’ for the hours between 11pm and 5am–only. I’d buy daily unlimited cards all the time (as would most of the ‘nightlife’ crowd) if the following two factors were true: they didn’t expire at midnight when I still have 5 more hours of parties and bars to go to and if my normal 45 minute commute home from the LES took under three hours in the late night.

    Hence, why most of the nightlife crowd doesn’t use the MTA and yellow cabs make a killing.”

    I don’t buy that. If I spring for a cab late at night it’s because I’m not near the subway or because I don’t feel like waiting for one (since it can be as long as a half hour between trains overnight). Additionally, while this isn’t generally a factor for me, I believe some people feel unsafe either on the subway or walking to/from the subway late at night and feel safer taking a cab. Also, if you’re talking about travel BETWEEN bars during that time window, again I think people spring for cabs because they’re quicker and thus don’t consume as much of your valuable drinking time. Changing the late-night fare structure wouldn’t really address any of these issues.

    Oh, but if you’re routinely out until 5am then I need to hang out with you more often. 😀

  • Ace

    How about making a 30 day card good for 30 days of use? Nothing worse than buying a card and losing out on 7 days because you are on vacation. Or 2 or 3 days because you are home sick. This would encourage all the occasional users to buy them too.

    Oh, and More Trains More Often (esp late at night).

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