MBTA head Michael Mulhern presented his plan to the legislature and, perhaps in a surprise only to me, says the authority plans to use the new fare cards to charge variable fares, higher for rush hour and lower for off-peak transit. From the Globe
‘’I'd like to think our next fare increase isn’t an across-the-board fare hike,” Mulhern said yesterday after briefing members of the Legislature’s Transportation Committee on the MBTA’s budget proposal for next year. ‘’The subway lines are saturated during the peak periods. We need to take better advantage of capacity that’s not used, and most of that capacity is during the off-peak.”
Economists sometimes propose this kind of variable charge as a way of aligning incentives. Drivers can opt for other routes besides overused bridges. London’s recent 5-pound congestion tax encourages alternative transportation into the city. But what’s the incentive here? Mulhern’s comments suggest an opposition between peak and off-peak hours, that if we only charged different fares people would travel less in peak times and more in off-peak times. But rush hours are hard to avoid: a majority of workers have inflexible hours. So to the extent that rush hour transit is price elastic (i.e. that a fare hike or decrease changes rider behavior), riders will opt for non-transit methods to get to work, often the automobile. So the state increases road congestion, environmental problems, and road repair costs. And if rush hour transit is not very price elastic, increased fares will be a revenue source for the MBTA but will not do anything to “take better advantage of capacity that’s not used.”
Lost in this is the sense that the MBTA’s purpose is not merely revenue maximization, but the provision of a public good — decreasing the reliance on the automobile and getting workers to their job to allow a densely populated city to function. I realize Mulhern is trying to square the T’s finances with declining sales tax and ad revenue, but the agency keeps clinging to fare hikes for its salvation, even as these increased fares are decreasing ridership. If you want to see how self-defeating that cycle can become, take a look at Atlanta’s rail system, whose fares have tripled in my memory.
I also wonder where monthly or weekly passes fit into the picture. I don’t have hard numbers, but I imagine a large proportion (the majority?) of rush-hour commuters have a T pass rather than pay single fares. Either the MBTA continues the pass and weakens the effect of the variable fare, or else its new fare scheme means the end of the pass, which would in essence mean that we will be getting pretty close to an across-the-board fare hike.
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