Is eliminating (transit) passes a good idea?

Transit passes, you. Get your mind out of the gutter.

I got into a Twitter discussion with the LA Times excellent* Laura Nelson (@laura_nelson ) and Twitter smarty Jordan Fraade (@schadenfraade) about the $100 bus pass at Metro, and that at today’s base fare, one needs 55 rides a month to pay off the $100 pass. Fellow Twitter smarty Henry Fung (@calwatch) noted that pass holders on average take 70, the implication for Metro being, I suppose that by allowing passes, they leave money on the table in terms of farebox recovery than if they eliminated passes. Several smarties chimed in to say there is support for getting rid of passes at Metro.

I just don’t know. If all y’all want too lecture me on the The Right Way To Charge, feel free. I think I’ve heard just about all the arguments before–I am Brian Taylor’s student, after all–and I’ve never really bought any of the arguments, even the good ones made by very smart people. But hey, maybe you’ll say the right thing in the right way and all the lights in the Schweitzer brain will finally turn on.

Farebox recovery for transit is a fraught number. I begin my class on public transit with the basic management problem: what if mc > p, or using normal people language, what if your cost to provide an additional unit of service is greater than the price you can charge your consumers to buy it? In the private sector, the answer is easy: either stop producing the good in favor of something more lucrative; or find a way to lower mc or raise p (by raising status, marketing, etc). That could be an answer for public management as well, but in goods like transit, it’s much, much harder to do those than privatization cheerleaders seem to think it is.

The question becomes: if you are losing money anyway, then how much is an acceptable amount to lose every time you send a bus out? It is a tough question to answer because transit is also widely considered a merit good. It cleans up air quality. Reduces traffic (a bit) and potential traffic mortalities. It can unify regions. Lots of lovely things. So on the one hand, it would be great if users covered the costs of their service. On the other hand, the rest of us are very, very keen that people use transit, so much so it seems unrealistic to be all like “hey, pay for all that yourself and in so doing, accomplish a bunch of social good for us while you are at it, mkayyyy?”

Then there’s “Merit goods are a liberal myth, and a service is worth supplying in the market, it will pay for itself.” I have colleagues who say this.

Moreover, failing to recover costs well enough might also be a sign of poor management, but it can also be a sign of a no-win public management situation, such as trying to run a transit agencies in a country with an anti-urban pro-individual consumption policy bias in its political economy, instead of robust concept of municipal socialism that fits policy to context.

While lots of people have lectures to hand out to one and all about how management and fare structures should happen, trying to figure out how much grace to allow management in a tough situation, how much public support ought to go to merit good consumption, and how much the users ideally ought to support their own service strikes me as very tough series of empirical and normative questions that I simply do not know how to answer.

Mixed in all that “I dunno” resides the question about the pass. It is an open question to me about whether pass holders will take those 70 trips a months if they are charged per trip. It’s a reverse causation question: do they take 70 trips a month because transit is just that useful to them, or because once they have purchased a pass, the marginal cost of an additional trip is zero–zippo–nada to them? It matters quite a bit because if it is the first instance, then pass holders–who are likely wealthier than those who pay fare-by-fare–are getting a discount that can and probably should go to putting revenues back into the system. If it is the latter, and people just purchase the option value of the pass and then go on to realize that option value more and less throughout their months, we may be losing rides and riders by trying to chase down every nickel and dime we can. Riders matter to us, politically and socially, and pricing even well-to-do people off the system is costly.

I don’t know which is which. And people who tell you they know based on surveys do not really know because surveys and people who claim they know how people will respond to price charges…



I do know that systems with expensive monthly passes and distance-based fares have better cost recovery than those who do not. But that’s another reverse causation problem. Do they have higher cost recovery because those are better management practices and like magic! Yay! They get to reap the rewards of managerial virtue, or do they get to engage in better management practices because they are in a better transit market/environment/political economy in the first place, with high demand and lots of employers who support transit commuting, etc?

I have been chastened by my own reaction to the Uber-Transit-Expensive-Pass thing. Prior to two years ago, I had been a pass holder in LA for 10 years. I routinely bought the monthly pass–the regional pass, when they had it–even though I never really used it to its full extent or got the full value. But I figured I was supporting metro, and I did like having the option value.

Then Metro raised its pass prices to $100, and USC decided to be antisocial and eliminate its support for alternative commuting (I’m reassured by People Who Know that absolutely NOBODY EVER used that program, and that it was VASTLY, VASTLY, HORRIFICALLY EXPENSIVE even though NOBODY USED IT (you know, like all subsidy programs that nobody uses).

I gave up on the pass then and it did affect my riding behavior, a lot. I’m shocked at how much. I still ride the train or the bus to work. That gets metro about $20 a month in fares during the school year, and during the summer…about $8. I used to buy the pass all summer. I just don’t use my office to write in the way some of my colleagues do; I work at home.

I used to go out with friends and just have one of them drop me at a Metro station–after all, I had the pass–but now I just fire up Lyft, or accept the ride home I’m always offered. I’m not that social any more, so my nights out can be counted on one hand. Even during the teaching portion of the year, I’m way ahead not buying passes at all.

Maybe Metro is better off not having to serve me, but I don’t think so.

And maybe I’m just weird. Maybe everybody else just pays the $100 and hasn’t changed at all.

Or not.

*I can never apply the adjective “excellent” without thinking of Barbara Pym’s Excellent Women, which is an excellent (see what I did there?) novel about the way society uses virtue to exploit women, which once prompted me to block somebody on Facebook for whining “That book is stupid. Why aren’t there any books about Excellent Men, huh? HUH? HUH? Social media is exhausting (and often tedious) enough without having to know that people you know have the same lack of self-awareness and capacity for critical thought as those who brought you Heterosexual Pride Day. That said, Laura Nelson is excellent and not in any pallid Barbara Pym sort of way, but in the badass Barbara Pym who wrote such clever satire sort of way.

One thought on “Is eliminating (transit) passes a good idea?

  1. As to pass usage, the experience of NYMTA is instructive. After introduction of both bulk pricing (x rides for x-n ride prices), and several day , weekly, and monthly, passes, non rush hour usage surged. This is significant because off hour runs are already operated, thus incremental costs of more riders is de facto zero. Having more riders in the stations/on the buses, increases the feeling of security (as opposed to the lonely off hour wait for an empty train depicted in movies such as Deathwish) Equally important is the general rise in transit use for non-work trips–reinforcing the idea that transit is useful for many trips/errands.

    The issue of farebox recovery is a different beast. First, one should remember that operating a political entity–city, county, state, nation, empire, is not exactly an enterprise undertaken to provide profit from all endeavors. We don’t expect the police (other than the egregiously unjust examples such as Ferguson) to generate profits for the government. Fire departments the same. Garbage collection,potable water, etc are not designed as “profit centers”, they are sine qua non aspects of civilization. In this context, expecting transit to show a profit, or merely break even from fares is silly–IIRC Joel Garreau (in Edge Cities) pointed out exactly one system worldwide which did, and it owns many acres of prime real estate adjacent the stations which generate the funds to supplement the farebox revenues. This mirrors the PANJNY having bought what became PATH in order to grab the real estate where they built the World Trade Center.

    In my own view, once one accepts that fares alone will not support the service, the question of fare design becomes more one of encouraging or discouraging ridership. The economic benefits of being able to travel within a region for work, medical, educational, shopping, recreation should be obvious–thus lower fares, more generous transfer policies, and greater frequency/span of service should be the goals.

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