Monday, January 5, 2009

Will Fare Hikes Burst Transit's Bubble?

Buoyed by rising gasoline prices, traffic congestion and heightened environmental consciousness, perhaps as a response to global warming, transit ridership has been enjoying robust growth in recent years. However, rising expenses coupled with a weakened economy and cash-strapped state and local governments, are forcing transit agencies around the country to hike fares at a critical time.

As these increases take effect, we will be watching to see what happens to ridership and how price elastic is demand for transit services. Here is a round-up on where things stand with major systems around the country.

Atlanta
Thanks to the weakened economy and reduced sales tax revenue, MARTA is facing a $57 million deficit in 2009. It has proposed a 25 cent fare hike to $2, increased parking fees and service cuts to cover the gap.

California
Patrons of the Caltrain commuter rail line between San Francisco, San Jose and Gilroy are paying 25 cents more for a one-way ticket. The increase is "needed to offset volatile fuel prices and increasing costs."

New York

The state legislature reconvenes this week and one of the top issues on its agenda will be finding a way to reduce fare hikes on buses, subways and commuter train proposed by the Metropolitan Transportation Authority. If the legislature fails to act by March 25, the base subway fare could rise a whopping 50 percent to $3 from $2, according to commuter advocate Gene Russianoff. Fares for Access-a-Ride van service for persons with disabilities could reach $5.

St. Louis
MetroLink fares rose by 25 cents January 1 to $2 on buses and $2.25 on light rail trains. Deep cuts in service are to take effect March 31, and about 600 of the agency's 2,365 employees will lose their jobs.

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