Four dollars and twenty-three cents.
That amount, give or take, is how much it costs New York’s MTA to transport the average passenger throughout its vast network of subways and buses.
Of course, as any New Yorker will tell you, that’s not what a rider actually pays—currently, a single trip costs just $2.50. And when all of the commuters using weekly, monthly, and reduced-fare passes are taken into account, the actual average fare ends up even lower: about $1.78.
As a result, subway rides are like inkjet printers and iPhones: the seller loses money on each purchase, knowing that the real payoff is in ink cartridges and service contracts. Unlike Hewlett-Packard and AT&T, though, the MTA has no way to make that money back.
Given the constant financial peril of mass transit systems, charging the “true cost” seems like the obvious solution. Yet a low subway fare—even unprofitably low—does far more good than harm. Here’s why:
1. It lets the poor ride the subway—without politics getting in the way
If the MTA charged commuters the “true cost” of a subway ride, the average straphanger would pay about $2.45 more with every swipe. Advocates of such a setup say the MTA could then set up a reduced-price program for the neediest riders.
To be sure, transit passes for the poor are a great idea on paper. But there’s a reason most systems in the United States don’t do this: it would be a political nightmare. Even the most progressive New Yorker, hardened by years of being asked for money on the subway, might hesitate to support a program that would make it easier for the poor to ride.
Luckily, there’s a solution: the system that we already have. Think about it. If a New York subway fare only pays for about 40 percent of a ride, who covers the other 60? New York State, through its wide array of taxpayer-supported transportation funds. It’s not a perfect system by any means, but it does provide a workaround that effectively subsidizes the poor through the state government’s relatively progressive tax system. At any rate, it’s less politically toxic than a program that would explicitly provide low-income transit passes.
Above all, it works. A New Yorker can buy unlimited subway rides for $1,344 per year—about 9 percent of a minimum-wage worker’s annual income. While that’s slightly more than it used to be, it’s still far below the cost of car ownership.
2. It convinces the wealthy to use mass transit
When it comes to commuters who are better off, it actually is wrong to assume that they will pony up simply because they could afford the more expensive $5 subway ride.
Brian Taylor, a professor at UCLA, has spent time researching how fare prices drive ridership. In a 2009 article, he concluded that the relationship is fairly elastic—that is, high fares tend to make wealthier riders find other means of transportation rather than put down the extra cash.
That’s particularly relevant in New York, where the American Community Survey found that a quarter of commuters who use public transit make more than $75,000 per year. Though transit-dependent Manhattanites might prove an exception to the rule, a 138 percent fare hike would still probably make many of them look elsewhere, especially as services like UberX lower their rates below taxicab level.
Not only would this loss in full-fare ridership make a subsidy scheme for low-income riders difficult, it would also create the kind of social stigma around public transit that New York has, more than any other city, managed to avoid. Rather than affecting a wide swath of New Yorkers, problems with the MTA would harm mostly low-income commuters, and that would be a disincentive for policymakers and politicians to advocate for better mass transit.
3. It fights hidden subsidies for drivers
Implicit in proposals to dramatically raise the subway fare is the idea that mass transit is a uniquely government-dependent form of transportation.
In fact, the exact opposite is true. As studies out of Wisconsin and Ohio have shown, “non-users” end up subsidizing drivers—through the construction and maintenance of roads—at rates that range from 40 to 55 percent.
Rohit Aggarwala, a professor at Columbia, noted the issue in a recent op-ed calling for higher transit fares, yet called for reducing the degree of road subsidies relative to transit as “a final task,” evidently assuming that forcing commuters to pay the true cost of transit would alert them to the true cost of driving.
Barring some sea-change in how our government approaches transportation, such a series of events would be incredibly unlikely. Instead, raising transit costs will simply entrench the road subsidies that already exist, as more people would rely on driving than ever before.
It’s easy to point out the virtues of the subway system. Despite its chaos, at the end of the day, it remains an incredibly accessible and massively popular way to move about the city for a wide range of people. What’s more, it creates a greener, smarter city in doing so. Yet a fundamental part of all these benefits is the fact that a subway ride so cheap.
The truth is, a low subway fare helps to make all of this happen. Should it ever go away, we’ll start to realize how it does far more for mass transit than we give it credit for.
And that’s a cost we truly can’t afford to bear.