“Relief” Over Lack of Subway Fare Hike?

I’m I the only one confused over everyone’s “relief” due to the recent news that the $2.00 fare will not be going up?

The mainstream media makes it out to be a reason for citywide celebration.  What’s the big deal?  The fact is that the other denominations of rides are likely going to go up.  They are going to probably go up even more than was originally intended.

Only 15% of riders actually purchase the single ride cards.  This must consist mostly of people that live outside the city and drive in.  Tourists and workers.  Tourists that only need a ride or two to get around for a weekend visit.  People that work in midtown, and have a random business meeting downtown might grab a quick subway ride.  That’s probably the bulk of your single ride fares.

About 30% of riders get the monthly unlimited (the preferred choice of SUBWAYblogger).  Then there’s the 37% that get the $10 + bonus ride cards.  That’s the buy 5 rides, get one free deal.

I was surprised to see that the bonus ride cards were the most popular, and I couldn’t figure out why.  Then the NY Post explained that the $10 card is the preferred option of lower income residents.  That makes sense because it is hard to shell out $76 in one shot for a 30 day unlimited.

So with the anticipated hike on the unlimited cards, we’re looking at $80.00 cards in our future.  Ehhh…not the end of the world I guess.

What I want to know is how do you just “all of a sudden” discover an extra $220 million laying around in the MTA bank accounts?  Uhhh hellloooooo!  That’s not something that just sneaks up on you.

It’s finance operations like this that make me wonder if the system would be better off it were privatized.  No multi-billion dollar business would ever let $220 million just sneak up on them.  Every minute of every day, there would be a team of accountants tracking every cent that swiped through the turnstiles.  If there were even a hint of a surplus, not only would they know about it immediately, but it would probably have been forecasted in the fist place.

So the fact that the MTA just reforecasted, and discovered the surplus only goes to show that a) People weren’t paying attention, and b) the people that did the last forecast obviously don’t know what they are doing.

3 thoughts on ““Relief” Over Lack of Subway Fare Hike?

  1. I agree with you on many points here, but I want to clear up one major misconception that has been rampant in the media coverage and public response to the latest fare hike news.

    The MTA did not *discover* or magically conjure $220 million out of thin air. In June, when they made the first economic forecast, they didn’t anticipate the surge in ridership or the surge in real estate taxes. Some of it came from underspending due to, in my opinion, late start dates on certain big ticket projects. The rest came from an unexpected decrease in the debt service costs due to our tanking economy.

    All things considered, the MTA has been very transparent in this process. They issued a revised budget estimate and distributed it to the public at the Public Engagement Workshop last weekend with these numbers in it. They recognize — as do any CFOs in any company — that budget forecasting is an inexact science. One quarter, forecasts came in under budget; other times, rising costs can cause a company to miss its targeted budget.

    I think it’s unfair to continue to portray this money as magically under a mattress at MTA HQ. It makes perfect sense when you drill down into the finances, and privatizing public transportation companies has been an unmitigated disaster. Just ask Transport for London.

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  2. plus wasnt our system originally private? it seemed the IRT and BMT companies couldnt afford to run such an expensive venture, although perhaps is becuase they maitained their fare so low for so long.

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  3. Privatization involves a lot more than your belief that private companies are eagle-eyed book-keepers, something that may or may not be so.

    Take, for example, the current mortgage meltdown…you really want your transit system to “work” like that?

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