MTA raises fares 50% and reduces fares to 1975 prices!

It seems the bureaucrats in Albany have decided that the most expedient fix to the MTA’s billion-dollar budget woes is to defer the problem to the future. No surprise there, of course. Even the New York Times is aghast.

crashed-subway In the end, a standard non-reduced fare is likely going up to $2.25, up from $2.00. Plans which Albany scrapped included some which looked for a more substantial fare increase, up to $2.50.

Let’s face it – running one of the largest transit operations is expensive. Is $2.25 too much to pay? How about $2.50? $3.00? What if I told you that the MTA can raise the fare by 50% (to $3.00), and you’ll still be paying no more for a ride on the subway than you did in 1975? Would you believe me?

In historical context, we can look at subway fares in New York City in the past and compare them to today. To make the pennies of 100 years ago equate to dollars today, we have to adjust historical numbers.

YearMTA Single-Fare Ride
(historic amount)
Fare, 2008 dollars
(inflation-adjusted)
1904$0.05$1.18
1948$0.10$0.88
1953$0.15$1.19
1966$0.20$1.31
1970$0.30$1.65
1972$0.35$1.78
1975$0.50$1.98
1980$0.60$1.55
1981$0.75$1.75
1984$0.90$1.84
1986$1.00$1.94
1990$1.15$1.87
1992$1.25$1.90
1995$1.50$2.10
2003$2.00$2.34

It’s pretty clear that there’s a trend: public transportation is becoming more expensive: the proposed fare of $2.25  is quite a bit higher than the inflation-adjusted fare of old.

However, this analysis skips one important fact: Today, most riders do not pay the full fare. Thanks to bulk pricing and the unlimited-ride MetroCard, only 2.1% of riders pay the full fare. In fact, according to the Independent Budget Office (New York City’s internal watchdog), the average fair paid on MTA transit systems which run at the $2.00 single-ride far is about $1.30.

The $2.00 fare – or $2.25, or $2.50 – is a false reality, much like the sticker price on a new car. The actual fare is much lower, thanks to the discounts that most people get. A $3.00 fare today would result in an effective cost of about $1.95 per ride – the same price you paid in 1975, when factoring in the discounts and inflation.

Oh, and at $3.00 (er, $1.95) per ride, you would also eliminate a new payroll tax and new fees on driver’s licenses and taxi fares. Sign me up for higher fares!

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