Metra fare increase

[Phoebe Vet]

Falcon:

Politicians make that mistake regularly.  Government employees get small salary increases annually or every couple of years while political appointees and elected officials brag to voters about not increasing their own.  Then every ten years or so they pass a huge increase for themselves and anger the very voters to whom they have been pandering.

Transit agencies do the same thing.  Instead of raising fares 10 cents a year, they raise them a dollar every ten years.  Which one is harder to sell to the commuters?

[Falcon48]

CSSHEGEWISCH

Part of the problem is that there are less and less people around who can remember when mass transit, from bus to commuter rail, was privately operated.  Few are aware that mass transit became a government operation because the private sector could no longer make a profit on the operation.

  I certainly agree that mass transit can't be expected to make a "profit" in today's transportation environment.  The point of my note, however, was that a transit agency should still try to operate like a business and maximize the amount of money it recovers from the farebox.   The METRA strategy of holding fares constant for many years and then taking a whopping fare increase when they run out of money is, simply, dumb.  They forego all of the revenue they could have collected over the years if they had increased their fares gradually, and which may have made a huge "budget busting" increase unnecessary.  Then, when they take a huge increase (like the present one), it's partially offset by loss of ridership (although the big tollway increases being taken at the same time may save their bacon his time around).  The correct strategy is to take small increases more frequently, so as to maintain or even improve their fare recovery ratio, rather than lurch from crisis/huge fare increase to crisis/huge fare increase every 10 years or so.  The "small but frequent increase" approach was the strategy CNW used to employ when it ran its own commuter service.  They may not have made a true profit (although they claimed they did), but they had the the best (or least worst) commuter financial performance in the industry. 

[blue streak 1]

CSSHEGEWISCH

Part of the problem is that there are less and less people around who can remember when mass transit, from bus to commuter rail, was privately operated.  Few are aware that mass transit became a government operation because the private sector could no longer make a profit on the operation.

CSSHEGWISCH: To expand many people forget that political pressures kept fares unreasonably low when they were privately owned. Remember Charlie on the MTA? That caused many private companys to go out of business.  Then some of the mass transit operations were taken over by government and were subsidized by the government to keep low fares.  Atlanta in 1971 (?) had the lowest fare in the country at that time of 15 cents.

[CSSHEGEWISCH]

Part of the problem is that there are less and less people around who can remember when mass transit, from bus to commuter rail, was privately operated.  Few are aware that mass transit became a government operation because the private sector could no longer make a profit on the operation.

[Phoebe Vet]

For the benefit of all the fools who think that mass transit is some kind of socialist plot I suggest that they shut Metra down for 30 days and then ask the tax payers what it is worth to them to start it back up.

It would clearly demonstrate how much the community benefits by it's existence.

[Falcon48]

schlimm

http://www.chicagotribune.com/news/local/breaking/chi-metra-considers-scaling-back-consultant-contract-defends-fare-hikes-20111003,0,3760985.story

Interesting that a very conservative GOP Senator (Kirk) thinks the fare increase (28%) may be excessive.

  The real problem here is that METRA thinks it has a mission to avoid fare increases as long as possible. That message clearly comes across if you've read their newsletters over the years - they're proud of the fact that they've avoided fare increases for many years. As a result, when they get into trouble and have to take one, it's a whopper and a big budget-buster for their customers, as this one is.  I'm not sure how long the present fares have been in place, but (except for some increases in non-mulitple ride tickets a year or so ago) I think it's been more than 10 years since the last general fare increase (which, as I dimly recall, was also a whopper).  A well run business wouldn't do this.  They would take small increases more frequently (whether they "needed" them or not).  That is, in fact, what C&NW used to do when it ran its own commuter service.  This strategy might also help METRA get a little ahead of the curve on its finances.

The only saving grace for METRA on this fare increase is that it will  occur at the same time that the Illinois tollways are also taking a whopping increase in their tolls, so there shouldn't be much of a passenger loss.  The tollway authority, needless to say, has followed the same pricing strategy as METRA - holding its tolls at the same level for many years and then taking a whopping increase.  Their officials must have gone to the same business school as Metra's people.   

[schlimm]

http://www.chicagotribune.com/news/local/breaking/chi-metra-considers-scaling-back-consultant-contract-defends-fare-hikes-20111003,0,3760985.story

Interesting that a very conservative GOP Senator (Kirk) thinks the fare increase (28%) may be excessive.