Metro is writing a new comprehensive Long Range Transportation Plan (LRTP). Under the existing LRTP from 2009, Metro hopes to increase the farebox recovery rate of its bus and rail systems. Farebox recovery is the percentage of transit operating expenses that are covered by revenues from transit fares. The current rate is 29%. Metro hopes to increase the rate to 33%. Under current circumstances, this probably means raising the price of bus and train tickets. Here I’d like to explain why I think a different goal is more appropriate for the new LRTP: maximizing ridership.
Charge More?
But first, you might ask: “What’s wrong with charging a bit more?” It’s an understandable question. In order to keep things going, Metro has to match expenditure with revenue. Any organization that keeps running deficits eventually becomes insolvent. So farebox recovery would ideally be 100% and Metro would be in the black, right? Under this scenario, the subsidies keeping the buses and trains rolling are the problem. Society may begrudgingly pay out of a sense of moral obligation to the poor, but users should pay more so that we can keep this handout as small as possible.
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