Transport London and its farebox ratio

The BBC ran a story yesterday that Mayor Ken Livingstone promised to drop fares on Transport London by 5 percent by October 2012 if he is elected.

Boris Johnson, by contrast, has said that he will stick to the existing formula for raising fares, which is the retail price index plus 2 percent.

So that formula says it all; it’s a policy-level move to shift more of the burden onto the users themselves.

Sure enough, that’s what the Beeb’s numbers suggest, showing that users are covering about 54 percent of TCL’s costs–certainly not bad by any measure to US operators.

The other part of the story I don’t quite understand–they’re arguing over a surplus, which is not a word I’m used to seeing in transit finance, and I can’t quite figure out if there is an actual surplus or there isn’t–or there was, but central government austerity measures meant the agency used that surplus already.

What do you think of the approach? At least with a formula, transit riders would know what kind of fare increases to budget for, as I think US austerity measures are likely to pull back on federal support for transit very hard.