While people should be encouraged to use SmartTrip cards, this kind of pricing for "casual" use borders on criminal. It prices the subway ride more comparable to a railroad trip.

If the point is not just to generate revenue for the transit system--and I understand WMATA's desperation for revenues--but to reduce automobile trips and congestion within the region, then this pricing system harms the region and in particular DC.

This really becomes an issue with group trips. Depending on the time of day, even groups as small as two people may choose to drive rather than use transit.

Note that no other heavy rail system in the U.S. has a comparable fare structure. Being an outlier is not always a sign of excellence and best practice.

by Richard Layman on Jan 10, 2012 9:02 am • link • report

RL: It will do no good if if Metro collapses because it can not pay its bills -- if it does, the auto traffic will get much worse than the marginal loss of casual riders.

Do you have any substantive ideas how Metro should get its money?

by goldfish on Jan 10, 2012 9:09 am • link • report

I'm also concerned with this new pricing structure. I'll point to Atlanta as an example of a better practice.

While MARTA uses a flat fare (I support a graduated (distance-based) fare system), they also used to have two types of fare media. One (a Breeze Ticket) was a paper RFID card that cost $0.50 and was refillable for a limited amount of time. The other (a Breeze Card) cost $5 and was refillable.

The card was good for 5 years, at which time MARTA would replace it free-of-charge at a Ridestore.

A few months ago, MARTA changed the system to eliminate the short-term Breeze Tickets. Now, the only way to enter the rail system is to purchase a Breeze Card. The cost of Breeze Cards was reduced to $1 at the same time as the elimination of the Ticket. You can still pay cash on the bus, but transfers only work with Breeze Cards.

I think if Metro wants to encourage people to use SmarTrip, the way to do it is to eliminate paper farecards completely. Charge a small one-time purchase fee for the SmarTrip card ($1 or so), and sell the cards from every fare machine (not some special converted parking meter that only takes $10 bills and is only available at suburban stations).

But I'm not going to hold my breath.

by Matt Johnson on Jan 10, 2012 9:11 am • link • report

It strikes me that WMATA fare structure isn't about revenue -- it is about balancing.

You'd have to wonder what an independent group would suggest. GGW is kinda hijcaked by the peak fare (incentives!) and Mperkins worthwhile pass initative. I'd think parking could go up a bit more.

Is there a link to the WMATA budget? Perhaps I missed it. Also, I don't see any discussion on airline buses (or express buses).

Wasn't there an issue last year wiht running out of Smartrip cards? If so, trying to incentive people into buying more of them isn't a good idea until the replacement system is in place.

And why round to the nearest dollar on the bus? The delay isn't cash customers -- it is people trying to reload smartrip on the bus. Horrible idea. I'd penalize that behavior.

by charlie on Jan 10, 2012 9:12 am • link • report

It would be super awesome if we could have different SmartTrip designs, too. Why doesn't WMATA want me to have some transit bling to go with my bedazzled iPhone case? Answer me that, Sarles.

by Ronald on Jan 10, 2012 9:16 am • link • report

I said this at the last fare increase. Just bump the minimum cost of a trip to $2. Quit the nickle and dime-ing game and you'll reduce the overhead and infrastructure costs associated with implementing these short term fixes.

And fire Sarles. The level of management incompetence and employee disservice hasn't changed under his leadership. We need someone who can't reform the culture of WMATA and he is not up to the task.

by Redline SOS on Jan 10, 2012 9:16 am • link • report

I'm kind of disappointed they are dropping peak of the peak, as it was one charge I actually did change my schedule to avoid.

I'm concerned that they're making these proposals before they know the true impact of the drop in transit benefits. I have a gut feeling that the hike in fares in addition to the drop in benefits might actually net a lower revenue for WMATA with reduced demand. I have already changed my schedule due to the drop in transit benefits and will probably make even more drastic changes if and when a fare hike is implemented.

by B on Jan 10, 2012 9:20 am • link • report

@charlie:
WMATA has not released the budget yet. We expect it to be on their website by Wednesday COB.

by Matt Johnson on Jan 10, 2012 9:20 am • link • report

Budget is up: http://wmata.com/about_metro/board_of_directors/board_docs/011212_3ABudget.pdf

by Michael Perkins on Jan 10, 2012 9:21 am • link • report

@charlie, @Michael Perkins:
I stand corrected.

by Matt Johnson on Jan 10, 2012 9:24 am • link • report

Although I liked the peak of the peak as a progressive fee that those who could pay would, with the drop in transit benefits, perhaps it is more reasonable to adjust the fee for commuting riders accordingly (yet I've heard the transit benefit amount may still be restored).
Otherwise, I agree with charlie that it would be wiser to push people to SmarTrip cards after the transition to the new card. The high fees on paper farecards now will just entail more people making the transition to the new card when the new card comes online.
I like that the bus fee would obviate the need for change however.

by DCster on Jan 10, 2012 9:25 am • link • report

@RedlineSOS

Ok, how about this--and work with me here--what if we accept a fare increase, maybe even a larger one. BUT! But we also get to vote one station manager off the Metro/ATU island every two months. Sound good?

by Ronald on Jan 10, 2012 9:26 am • link • report

@Matt, Mperkins; thanks.

To answer my question, the airport bus remain the same. I think they hit the liit there.

Does anyone know why DC and MD together have such a huge chunk of the MetroAccess subsidy?

by charlie on Jan 10, 2012 9:28 am • link • report

@ Matt Johnson I think if Metro wants to encourage people to use SmarTrip, the way to do it is to eliminate paper farecards completely.

Is the goal to encourage usage of Smartrip cards, or to generate a ton of revenue from tourists and visitors? With an increase of that magnitude, I've got to think cash-grab.

As for residents, yuck anyway. Nothing like the now-halved transit benefit becoming even more insufficient to cover a couple weeks of commuting. Ho hum. I have no real constructive suggestions, but the combination of Metro policy and federal policy is going to drive more people back to their cars. I'm also not sure I would have announced this two days after a week-long stretch with 30+ minute headways on the weekend, multiple rush hour delays due to maintenance/track issues, and a suicide-by-train attempt, but Metro's never exactly been strong on the PR game.

by HooShotYa on Jan 10, 2012 9:28 am • link • report

Cool, more reason to drive.

by Martin on Jan 10, 2012 9:34 am • link • report

Whoowee...

I've always wondered when Metro was really going to try to "stick it" to the tourist rider. With those paper fares, they've done just that. On the surface, a dick move but it will work. Tourists won't really change their plans because they now have to spend an extra couple bucks on metro. They will complain and moan but to tourists it is the cost of doing business. Like paying 20 bucks to get into a museum in NYC. Sure you scowl when you do it, but it doens't stop you from going.

Metro has been a "hot mess" of late. The past two days on the yellow line during rush have been atrocious and you can't even plan for them because the sigificant delays (15-20 minutes) weren't listed on WMATA's website.

Last week wasn't any better, or the week before that. Continual service distruptions, 10-15 minute headways during rush, 8 car trains that only have six usable cars.

I don't even bother talking about the escalator/elevator problems anymore because well...it is just expected now.

And Metro wants more money...oh the hilarity of it all.

by freely on Jan 10, 2012 9:35 am • link • report

@goldfish,

Close down outer Metro stations on weekends. That should start saving some money.

by beatbox on Jan 10, 2012 9:37 am • link • report

And if they really want tourists to use Smartrip cards, why don't they make them available at every station?

by blogoo on Jan 10, 2012 9:38 am • link • report

Surely there's a tipping point at which tourists are clued in to the fact that once you are in DC (say they are staying in Vienna, but take the metro into town) there is little reason to use metro for short trips. DC is incredibly walkable, especially in the tourist areas near the Mall and Capitol Hill. My question would be: is raising the fare for paper cards so much going to cause tourists to reconsider using metro at all? Sounds like it could actually lead to lost revenue. I'm a supporter of walking, but from an accounting standpoint that can't be good is tourists are priced out of the transit system.

by MJ on Jan 10, 2012 9:39 am • link • report

@B: I have already changed my schedule due to the drop in transit benefits.
Ditto. 5% reduction in my WMATA ridership.

by Arl Fan on Jan 10, 2012 9:42 am • link • report

"Regular local bus fares will rise from $1.60 to $1.70 for SmarTrip customers, while customers paying in cash will have their fares rounded to the nearest dollar."

I'm pretty sure bus fares are $1.50 now for SmartTrip customers...at least that's what I paid this morning...

by DCNative on Jan 10, 2012 9:46 am • link • report

Also, anyone who hasn't seen the pictures of cracked brake assemblies over at Unsuck's blog really ought to take a look. Apparently a whole batch of bad parts was the cause, but inspections didn't catch it until after the first operational breakdown.

by Arl Fan on Jan 10, 2012 9:49 am • link • report

@charlie: Does anyone know why DC and MD together have such a huge chunk of the MetroAccess subsidy?

At least in Arlington's case, we have a local paratransit system that is funded by the county and is cheaper to operate than Metroaccess. So we have our own paratransit subsidy but it's not reflected in this budget. Don't know about Fairfax and Alexandria, though.

by Michael Perkins on Jan 10, 2012 9:51 am • link • report

How much do you want to be they're going to lose even more ridership over this?

Hell, I already avoid Metro for weekend trips that require transfers if I can...I'm not paying exorbitant money to stand around on a platform for 20 minutes waiting for a train. I don't know that I can pare my own schedule down further, but you can bet I will if at all possible.

by Ser Amantio di Nicolao on Jan 10, 2012 10:04 am • link • report

It's kind of ironic that everyone says we need to increase funding so that we can improve what has become a very bad system but we keep increasing funding every year and things keep getting worse (or at least they have over the last 20 years I've been riding metro). The problem is not funding/revenue. The problem is cost control. We keep sending more money to metro and it and keeps getting absorbed by out of control health care and pensions. That combined with a very inefficient unionized workforce means that it really doesn't matter how much the fares increase, things really aren't going to get better unless someone stands up to the union and says that is enough. That isn't going to happen since we aren't even at the stage of acknowledging the real root problems. We keep trying to address symptoms with more money. It's like giving a cancer patient an aspirin. They will feel alittle better for a couple hours but you haven't fixed anything.

by jim on Jan 10, 2012 10:07 am • link • report

@freely

Hot mess indeed. But you don't see drivers laughing at the mass unwashed waiting around for transit.

http://greatergreaterwashington.org/post/9030/in-sprawling-suburb-car-drive-you/#comment-85963

by TGEOA on Jan 10, 2012 10:24 am • link • report

@jim. Indeed. Labor costs are the single biggest line item increase in Sarles's budget. $66 million for existing employees, plus new hires. Most of the budget increase will go to Metro's bloated and inefficient workforce, not "cracked brakes," aging equipment or broken escalators. Metro needs to present the unions with a stark choice, either wage and benefit concessions commensurate with labor's low productivity, or changes in staffing and service levels that would allow Metro to shed employees, i.e., layoffs. You choose.

From the Post story--

"The biggest increases in costs include $55 million from increased labor and pension expenses; $35 million for some system improvements, including preventive maintenance work on escalators and elevators and more bus security; and $11 million to, in part, hire more people to help curb worker fatigue from excess overtime."

by Paulus on Jan 10, 2012 10:24 am • link • report

hold the phone, if you get a paper card the trip, no matter the length, will cost $6??? That is outrageous.

by Anon on Jan 10, 2012 10:32 am • link • report

WMATA needs a source of dedicated funding for DMV

by Jerome on Jan 10, 2012 10:33 am • link • report

I still don't get the increase in pension benefits. Was there a problem with the stock market this year? I know why in 2008 they had to add more money to kitty, but today?

The $11M to hire more people is also designed to reduce costs by reducing overtime pay.

the end state for metrorail is a system that ferries federal workers to downtown. Is that such a bad thing? The rest of us can walk, bike or take the bus.

by charlie on Jan 10, 2012 10:36 am • link • report

While I support Metro's idea of getting more people to use a SmarTrip card, I think they really need to upgrade the SmarTrip system first to make it as easy and as accessible as possible. I ordered a replacement SmarTrip card over three weeks ago and I have YET to receive a new card with my old funds on it. After Metro sent my new card to the wrong address, and lots of back and forth with a customer service rep, I finally just went out and bought another SmarTrip card from CVS. Now I have to wait ANOTHER five business days to get my old funds on my new card.

In the mean time, I've been stuck using paper farecards and I would be pissed if Metro penalizes me for their incompetence by charging me a ridiculous fare for using a paper farecard!

by aaron4uva on Jan 10, 2012 10:37 am • link • report

Two words: Death spiral.

There is just no way a transit agency can reduce the level and quality of the service, charge more, and think they're going to maintain ridership.

My guess: Metro will be revenue neutral action as the number of people riding the Metro will simply decline.

Also, for anybody (Hogwash) who doesn't think that employee benefits are a large reason why Metro is in this hole, I would direct you to slides 5 and 6. Labor and pension costs are 50% of the increase in this year's operating budget. Metro pays out nearly 200k more per employee in pension benefits than the average of the six jurisdictions listed. Metro tried to soften the blow by including their own pension scheme in the total average, but even then they still pay out 150k more than the average. People who don't understand that this is a problem are just sticking their heads in the sand.

by Adam L on Jan 10, 2012 10:39 am • link • report

Aside from the outrageous jacking up of fares for paper farecards (which still work at station amchiens - there's no need to charge a flat fee, unless you're trying swindle tourists, or drive them into taxis) what stands out is that a parking is going up a "whopping" 5%. Fares for highest-fare off peak? Up 27%. That doesn't make sense on a few different levels.

by Paula Product on Jan 10, 2012 10:44 am • link • report

@Paula

I imagine WMATA has to walk a fine line for parking - too much of an increase and it becomes cheaper to park at your destination. When I owned a car, paying $5 to park at Huntington Station and then subway fare was way more expensive then getting a monthly account and paying $6.50 a day to park in Rosslyn. It wasn't until I decided to get rid of my car that Metro became cheap enough to sustain for me.

by AdaminAlexandria on Jan 10, 2012 10:52 am • link • report

I think the paper fare card price is ridiculous, but I get why metro wnats to reduce people using it. My suggestion, why not just eliminate it all together.

If you do that though you are going to have to make it easier for tourists to buy metro cards becuase buying the card from a machine without anyone explaining what is going on is asking a lot. First off I would make an effort to get hotels to sell them as well as at tourist attractions. Why can't the smithsonian gift shop sell a metro card? I would set up kiosks manned by actually people in the baggage claim areas of Dulles and DCA that would sell the cards.

Also see if they price can be reduced from 5 dollars, even a dollar or two would help.I woudl also make it easy for people to buy a card online before they even stepped into DC

by nathaniel on Jan 10, 2012 11:00 am • link • report

Yeech. This stinks, and there are no good answers.

I'd beg them to reconsider on paper farecards though. That change makes it very unattractive to take visitors on the Metro.

by andrew on Jan 10, 2012 11:04 am • link • report

what stands out is that a parking is going up a "whopping" 5%. Fares for highest-fare off peak? Up 27%. That doesn't make sense on a few different levels.

The 5% parking increase is in line with the weighted average fare increase which is 5%. At least, that's what the WaPo headline says is the avg fare increase.

What makes less sense is that peak smartrip fares will increase less than 5% while offpeak fares will increase more dramatically. Peak riders are much less price sensitive than offpeak riders because there are few viable alternatives to metro during peak times.

As for outrageous paper farecard fees...blame that on the "fare simplification" crowd getting its way.

Finally, what's the plan for WMATA employees to share in the sacrifice? That's what govt employees are having to do at every level of govt throughout the country. I'd love to see an NYC style showdown with the WMATA union.

by Falls Church on Jan 10, 2012 11:08 am • link • report

That change makes it very unattractive to take visitors on the Metro.

I own a backup smartrip I use for visitors. Will probably get a second one.

Also see if they price can be reduced from 5 dollars, even a dollar or two would help

The cost of a smartrip has to be very close to the max fare because you can have a negative balance on your smartrip equal to the amount of your last trip. Eliminating negative balances creates some other problem I can't recall right now.

by Falls Church on Jan 10, 2012 11:15 am • link • report

@Falls Church: what is obviously need is that the fares should be more complicated, not less. Obviously inbound is more dear in the morning; it should cost more. Charge different amounts based on time and direction of movement. Add another fare, off-off peak (i.e., late at night) to off peak, peak, and peak-of-the-peak fares, but with different prices depending on the direction of travel. Oh, and they should charge more to use the inner cars, which tend to be more crowded.

by goldfish on Jan 10, 2012 11:17 am • link • report

@AdamL Also, for anybody (Hogwash) who doesn't think that employee benefits are a large reason why Metro is in this hole, I would direct you to slides 5 and 6. Labor and pension costs are 50% of the increase in this year's operating budget

Well, I never said that employee benefits were not a reason why metro is in a financial hole. What I did say is that off the issues I constantly hear riders complain about, the "union's role" in it's financial mess is minimal at best. This was a response to your suggestion that the "union" is at the root of all metro problems which I haven't seen much evidence to prove such.

Now if you want to argue that metro should alter the pensions of former retired employees, than that's a better argument to make. It should, however, come as no surprise the people affected won't be happy about it. I come from a family of manufacturing workers who were promised pensions that the company ended up not being able to afford. Not just a few of them have basically no pension while those who do were unionized.

So you'll likely never get me to be on the anti-union side.

by HogWash on Jan 10, 2012 11:30 am • link • report

I am not in support of this. TWICE brakes have fallen off trains in the past 2 weeks. I think metro needs to fix its budget shortfall by reducing salaries of its ceo, cfo, etc and then transferring that $ to its capital fund (or whatever the fund is called). metro cuts is telephone hours in dec 2009 from 6am-10:30p to 6-8:30pm, saying this would save $400,000 annually http://www.wmata.com/about_metro/news/PressReleaseDetail.cfm?ReleaseID=4228. So if ceo cfo managers & other execs pay is reduced won't that save$$$?

by lilkunta on Jan 10, 2012 11:40 am • link • report

@ HogWash: Well, I never said that employee benefits were not a reason why metro is in a financial hole. What I did say is that off the issues I constantly hear riders complain about, the "union's role" in it's financial mess is minimal at best.

The extent of most riders' stake in Metro is

-How much does it cost me?
-How long does it take?
-How often do the train runs?
-How often is it delayed, broken, and annoying?

Riders aren't going to complain about the "union's role" because they most likely aren't aware of it, nor are they aware of how the costs it creates and cover-fire it provides to seriously negligent employees can affect the daily commute. I know I wasn't aware of the ridiculous benefits and protections this particular union gets until I became a regular reader at GGW. I'm all for unions and reasonable worker protections as well, but the pension itself is becoming an outdated concept and this particular ATU consistently shows itself to be incredibly overpowered in its current contract with Metro.

by HooShotYa on Jan 10, 2012 11:44 am • link • report

How feasible would it be to get pension costs under control in negotiations with the union? Is the prospect of work stoppages the obstacle? I'm also curious what the 'NYC showdown' involved (@FallsChurch).

by DCster on Jan 10, 2012 12:03 pm • link • report

if you monetize/impute the value of congestion reduction, link to economic functioning of the city, etc., then you provide a justification for increased payments on the part of local jurisdictions.

The real problem is the difference between transit operation planning and transportation planning. As long as WMATA's desperation to pay for its costs on an annual basis drives transportation planning, these no win choices are going to be driving the process.

by Richard Layman on Jan 10, 2012 12:03 pm • link • report

i feel charging $6 for paper farecards is definitly a cash grab. But it is true that tourists may be expecting to pay alot ($5 water) for things in dc.

@michael: The bus rate is going up to $1.60 smarttrip fare
1.80 cash, where did you read it is rounded to the next dollar?

Im here with someone from NY who says we are complaning for no reason because in NY a single way bus/train ride is $2.50, an express bus is $5.50. There too transfers are only for those who pay with a card.... So are we heading to high prices like that of NY? I hope not.

by lilkunta on Jan 10, 2012 12:17 pm • link • report

@HooShotYa "Nothing like the now-halved transit benefit becoming even more insufficient to cover a couple weeks of commuting."

Zero subsidy benefits here, so enjoy it.

by Jack Love on Jan 10, 2012 12:21 pm • link • report

@HootThe extent of most riders' stake in Metro is

-How much does it cost me?
-How long does it take?
-How often do the train runs?
-How often is it delayed, broken, and annoying?

I agree with this and that's my point though. Of the things you mentioned, I only see the "union's role" in one of those..the question about cost.

I'm not convinced at all that the union affects how often trains run, whether they're delayed, or how long it takes to get from points a2b. I keep trying to reiterate this to people who constantly blame the union for everything.

Is management responsible for anything? It's no different than DCPS. Sure, its easy to blame the unions and teachers.

by HogWash on Jan 10, 2012 12:26 pm • link • report

@Jack Love
Zero subsidy benefits here, so enjoy it.

Your employer doesn't offer the option to take money out of your paycheck pre-tax and load it onto smartrip?

by MLD on Jan 10, 2012 12:33 pm • link • report

this particular ATU consistently shows itself to be incredibly overpowered in its current contract with Metro.

This does appear to be the case, but it's not the union's fault. I beieve the compact that creates WMATA specifies arbitration if there isn't agreement on a CBA. The union has been successful in arbitration. Absent changing the compact, the power dynamic will remain the same. Matt/michael, is this correct?

by dcd on Jan 10, 2012 12:44 pm • link • report

Yeah, to clarify--I just get SmartBenefits, not a flat subsidy. I don't think many people in the private sector get that. I thought most companies around here were set up with SmartBenefits by now.

@Hogwash: I'm not convinced at all that the union affects how often trains run, whether they're delayed, or how long it takes to get from points a2b. I keep trying to reiterate this to people who constantly blame the union for everything.

Well, I don't think there are union reps creeping around in their Snidely Whiplash mustaches, pulling wheels off trains and breaking tracks. Maintenance and operations problems within the system need to be fixed, and you fix them with money, and right now fares are about to be raised to pay for...increased labor and pension expenses.

If those come back to reasonable levels, then a fare hike like this could actually contribute to necessary capital and operational improvements. Management is absolutely accountable, but this is one of the harder balls for them to juggle. More money to run trains on the weekends? Fewer 30-minute headways. More money to fix trains and tracks and provide a more frequent maintenance schedule? Fewer rush hour delays. They're all connected.

By no means do I have confidence in WMATA management, but I'd have marginally more were they a smidge less hamstrung.

by HooShotYa on Jan 10, 2012 12:59 pm • link • report

@DCD, Thanks! I've been looking for that online and couldn't find it. I thought I had read that several times before. Most stories I've read always mention arbitration and I wasn't sure how wmata/arbitrator/union all tie in.

by HogWash on Jan 10, 2012 12:59 pm • link • report

I think it's a little early to call it a death spiral. Ridership was flat the most recent year from the prior, and projected to go up in the current year.

» July 1, 2007-June 30, 2008: 215 million trips
» July 1 2008-June 30 2009: 222.9 million trips
» July 1, 2009-June 30, 2010: 217.3 million trips
» July 1, 2010-June 30, 2011: 217.1 million trips
» Projection, July 1, 2011-June 30, 2012: 220.7 million trips
» Projection, July 1, 2012-June 30, 2013: 215.2 million trips

by David C on Jan 10, 2012 1:01 pm • link • report

@Falls Church

What makes less sense is that peak smartrip fares will increase less than 5% while offpeak fares will increase more dramatically. Peak riders are much less price sensitive than offpeak riders because there are few viable alternatives to metro during peak times.

You're right that it doesn't make sense from a revenue maximization standpoint, but they're doing this because they're only allowed to raise peak fares in line with inflation as part of the deal for the last big increase. Apparently there's no such cap on offpeak fares, which is why they're (stupidly) raising them significantly.

by Gray on Jan 10, 2012 1:04 pm • link • report

@HooShotYa

Yeah, to clarify--I just get SmartBenefits, not a flat subsidy.

But you realize that SmartBenefits is a significant subsidy, right?

by Gray on Jan 10, 2012 1:09 pm • link • report

@Gray

No, it is not. It is the ability to put your own money towards your transit use via a pre-tax contribution. It's available to any employer to offer to their employees. The only 'subsidy' involved is forgone federal income tax revenue, and that benefit is available to any employer who wishes to set up such a program for their employees.

by Alex B. on Jan 10, 2012 1:21 pm • link • report

On the bright side, Metro wants to cut the bike locker fee from $200 to $120.

by JimT on Jan 10, 2012 1:21 pm • link • report

@Gray - what Alex B. said. SmartBenefits is really just the "I'm on a train! I'm on a bus!" equivalent of a Flexible Spending Account for healthcare, as far as I can tell.

The punch-up to off-peak costs might finally get me to try out CaBi. Big opportunity for CaBi to pick up some ridership come July, when we're still likely to be looking at stuff like 20-30 minute waits for folks in Woodley Park who just want to get to a movie at E Street.

by HooShotYa on Jan 10, 2012 1:46 pm • link • report

Gray's right. It is a form of subsidy. Even Alex B concedes that

"The only 'subsidy' involved is forgone federal income tax revenue"

Exactly. The federal government is giving up revenue to fund transit use by some workers. That's a subsidy. It's only marginally different than not giving the credit and then sending the same amount out in the form of straight up transit subsidy check.

by David C on Jan 10, 2012 1:50 pm • link • report

@David C

Yes. I think the point is that while a maximum $1,500 deduction can be helpful (especially if it bumps you down a tax bracket), it's not the same as the direct funds that federal employees get to pay for their commute. I think most people think of the latter when describing Metro's federal "subsidy".

by Adam L on Jan 10, 2012 2:04 pm • link • report

It's an indirect subsidy.

Usually, when we say subsidy we mean an employer giving money to an employee for the purposes of commuting (which you can set SmartBenefits up to do, as well). That definition fits much better with the common usage of the word subsidy than the pre-tax employee contribution.

by Alex B. on Jan 10, 2012 2:32 pm • link • report

Exactly how are tourists supposed to get SmartCards?

Oh, now I get the point...

by Dane on Jan 10, 2012 3:09 pm • link • report

Correction to the post: It currently says "Since use of SmarTrip by visitors and non-regular riders is expected to increase, SmarTrip vending machines will be installed at more stations. "

Instead, it's ALL stations.

by MDE on Jan 10, 2012 3:31 pm • link • report

MDE: I've corrected the post.

by David Alpert on Jan 10, 2012 3:33 pm • link • report

I agree, it's an indirect subsidy. Perhaps this is just a limitation of language. Sometimes the word subsidy has a specific meaning and sometimes it has a general meaning. But if we're going to call the fringe benefit for parking a subsidy, we have to call the fringe benefit for transit a subsidy.

by David C on Jan 10, 2012 3:42 pm • link • report

"The fare increase will provide an even bigger incentive for people to obtain a Smartrip card, since all paper farecard trips will cost $6 each way during peak periods and $4 each way during off-peak periods. "

Disagree.

The incentive will be to ride a cab. Most tourists are in group. What kind of family of 4 would pay $24 for a one way trip on metro?

CaBi will also see gains.

by JJJJJ on Jan 10, 2012 4:00 pm • link • report

The provision is a tax expenditure. See 2 USC 622(3):

The term “tax expenditures” means those revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability; and the term “tax expenditures budget” means an enumeration of such tax expenditures.

by WRD on Jan 10, 2012 4:26 pm • link • report

This is terrible news for us drivers and parkers. Fewer people on the metro means more people on the roads and in the garages!

by addun on Jan 10, 2012 5:25 pm • link • report

@DCster

The NYC transit showdown:

The 2005 New York City transit strike was a strike in New York City called by the Transport Workers Union Local 100 (TWU). Negotiations for a new contract with the Metropolitan Transportation Authority (MTA) broke down over retirement, pension, and wage increases.

The strike was illegal under the provisions of an addition to New York State Civil Service Law called the Public Employees Fair Employment Act, more commonly called the Taylor Law, which has been in effect since September 1, 1967. It was passed largely in response to the 1966 transit strike. It prohibits municipal workers from striking and provides alternative means for dispute resolution. The law provides for criminal penalties including imprisonment of union officials, and fines against the union and individual striking workers. On December 20, state Supreme Court Justice Theodore T. Jones ruled that the Transport Workers Union was in contempt of two court injunctions, ordering it not to strike and imposing a US$1 million per day fine against the union.

On April 10, 2006, Justice Theodore T. Jones sentenced Local 100 President Roger Toussaint to ten days in jail and a week later, the union was fined 2.5 million dollars and the automatic deduction of dues from all members was suspended.

http://en.wikipedia.org/wiki/2005_New_York_City_transit_strike

by Falls Church on Jan 10, 2012 6:01 pm • link • report

I'd have to agree generally with the "Death Spiral" comments. Metro just reeks of poor management, incompetence, and lack of foresight.

More declines in ridership are in store -- and Metro will blame "the [strong DC area] economy"

by nativedc on Jan 10, 2012 9:15 pm • link • report

I don't understand the timing of raising the fares. Perhaps wmata has forgotten the fact that last week had serious delays on every line every day makes it hard for me to take this seriously. I realize they don't care what the riders think, it's obvious the people that run wmata do not ride wmata; and not to mention that congress has failed to extend the tax break which allowed up to $320 in wmata funds to be withheld pretax and that has now dropped to $120; the multiple "purse" system they someone thought was brilliant at sometime in the last few years that none of the current employees seem to understand. Wmata is making it easier and more cost effective to drive.

If they want more revenue, lower prices; it is proven in ever economic study that lowering the price of a service or convenience will cause people that normally would not take advantage of a service to do just that.

P.S. I especially loved waiting for 25 minutes for a train on Saturday to finally give up and leave the station to be charged $2.50 for nothing.

by Jack on Jan 10, 2012 10:48 pm • link • report

I don't understand the timing of raising the fares. Perhaps wmata has forgotten the fact that last week had serious delays on every line every day makes it hard for me to take this seriously. I realize they don't care what the riders think

Hmm...Really!? You don't understand why WMATA needs money? This is a failure of education on GGW's part (amongst others).

If anything, it's OBVIOUS that the Transit Authority needs more money and why they need it. How do you propose they get it?

As I understand your theory, you seem to believe WMATA has better options than this, but discarded them because, eh, screw the customers. Do you really think WMATA management is so out of touch they chose to raise fares despite better options out there?

Isn't it much more likely WMATA realizes this looks bad, but simply had no better option?

by WRD on Jan 10, 2012 11:11 pm • link • report

@Alex B:

It's a direct subsidy. My federal taxes are paying part of your transit costs, and your federal taxes are paying part of mine. Yes, plenty of subsidies show up as deductions or exemptions (e.g. mortgage interest deduction, charitable giving deduction), but that doesn't change that they are subsidies. Our federal tax dollars are subsidizing homeownership and charitable giving for the wealthy, and they're subsidizing SmartBenefits.

Yes, it is true that it would be a bigger subsidy if it were in fact bigger, but being able to forgo the marginal tax rate of 25 or 28% (or more, depending on your bracket) on money you spend on transit is still a pretty significant subsidy.

by Gray on Jan 11, 2012 9:25 am • link • report

@Gray

I disagree, but that's fine. The individual still pays the majority of their transit costs out of pocket.

My biggest pet peeve is when people lump pre-tax smartbenefits in with the direct (as opposed to indirect) subsidy that federal employees get. The two are not the same, and this fact is constantly mis-reported.

by Alex B. on Jan 11, 2012 9:36 am • link • report

@Jack

Oh, so many errors in your comment.

...and not to mention that congress has failed to extend the tax break which allowed up to $320 in wmata funds to be withheld pretax and that has now dropped to $120;

It was $230 in funds that could be used for transit, not $320.

the multiple "purse" system they someone thought was brilliant at sometime in the last few years that none of the current employees seem to understand.

The IRS thought this was the good idea, not WMATA.

If they want more revenue, lower prices; it is proven in ever economic study that lowering the price of a service or convenience will cause people that normally would not take advantage of a service to do just that.

This is completely false. Demand curves are just that, curves. At some points, lowering the price brings in more consumers who in total bring in more revenue. (See Metro's bike locker proposal.) However, for rail and bus transit in the region, Metro loses far fewer people by raising fees than it gets back in revenue. Dropping the fare would simply lose money: nearly everyone in the region who would take transit is already taking it. Want another counterexample to your "studies"? Cigarettes. Drop the price and you don't see extra revenue. Smokers will continue to smoke no matter how much you raise the cost/taxes. This concept is called "elasticity".

P.S. I especially loved waiting for 25 minutes for a train on Saturday to finally give up and leave the station to be charged $2.50 for nothing.

Yes, off peak Metro can be a real pain, especially when the PIDs aren't working. Next time, get the station manager to let you out instead of tapping out.

by MDE on Jan 11, 2012 12:13 pm • link • report

@AdaminAlexandria -
I understand what you mean - if WMATA raises parking rates too high, then some people really will opt to drive straight to their destination. But I guess I'm not sure why *WMATA* has to walk that line. If the lots are currently filling up earlier in the am, and rates are going to be raised, then it seems like there's room to increase parking rates (up to the level where the lots are still full, but fill up somewhat later in the day). Sure, some people will drive straight to Rosslyn, or downtown, but others will be able to get parking at the station. And others may decide not to drive to Metro, but to bike, walk, etc. On the other hand, if some lots aren't currently filling up, then I guess raising parking rates for those lots would be more problematic.

I think the small increase in parking looks especially weird when compared to the higher increase in offpeak fares. If higher parking rates mean people will just drive straight downtown instead, then won't an even greater increase in offpeak fares (compared to both parkign and peak fares) have a similar tendency to shift those riders to traveling during the peak? That seems to be a bigger issue for WMATA to worry about -- the parkers who opt to drive difrectly to their destination aren't "lost sales" to WMATA if the parking lots are still filling up, so it's not WMATA's problem. Whereas having riders shift back from offpeak to peak is somethign that taxes WMATA's resources. (And as others have pointed out, peak riders tend to less price sensitive, so if revenue is the issue, it would seem to make sense to substantially increase everyone else's fares while leaving there's relatively unchanged.)

by Paula Product on Jan 11, 2012 1:38 pm • link • report

Paula Product,

I think you're trying to say that WMATA should price parking so that it just barely sells out. And I agree. Another thing to consider when raising prices for parking is that some people who quit parking will not drive straight in. Some will decide that they really can walk to Metro. Or bike. Or take the bus.

So, only some percentage of people - less than 100% - who quit parking will then drive, because they're price sensitive. But the people who are less price sensitive and take their place are more likely to be drivers.

by David C on Jan 11, 2012 2:03 pm • link • report

@Alex B:

One is a subsidy, and another is an employment benefit. A subsidy doesn't have to make something free, it just has to make it cheaper. SmartBenefits lowers your cost of taking transit by something like 20-30%, so yes, that's a subsidy.

To be obnoxious and pull the definition from wikipedia:

"A subsidy (also known as a Render) is an assistance paid to a business or economic sector."

Which is exactly what reducing your transit costs is: an assistance paid to you by the government. It's not really helpful to act like you aren't receiving assistance from the government here.

by Gray on Jan 11, 2012 2:38 pm • link • report

@Gray

We're arguing semantics here. When someone says 'subsidy' in the context of Metro fares, they think of the Feds and their old MetroCheks, not pre-tax contributions. That's my point. There's a difference.

As I said, pre-tax is indirect. That is, it saves you money, but that money is via a forgiven tax (like a pre-tax contribution) rather that something paid directly (like a MetroChek).

The employment benefit is still a subsidy, yes? The contribution to transit is still pre-tax, the only difference is who that tax falls on (employee or employer). The remainder is subsidized by the employer.

It's not really helpful to act like you aren't receiving assistance from the government here.

I'm not sure how you ascribed this motive to me. I'm trying to clarify the language and jargon that so often confuses this issue, all while noting that your usual metro riders don't use that same terminology you'll find in economics textbooks.

by Alex B. on Jan 11, 2012 2:50 pm • link • report

@Alex B:

My point is that you are receiving money from others to pay for transit. I consider that a subsidy, since a subsidy is just a transfer from the government to you--which this is.

Would you like to propose another term to describe this "indirect" money you are given by the government to lower the cost of your transit purchases?

by Gray on Jan 11, 2012 3:34 pm • link • report

I already have: indirect subsidy for pretax contributions, direct subsidy for MetroChek-type benefits.

by Alex B. on Jan 11, 2012 3:36 pm • link • report

DC is incredibly walkable, especially in the tourist areas near the Mall and Capitol Hill.

Unfortunately, most American tourists are incredibly lazy and will whine and bitch about having to walk more than a block or two, so it's doubtful this will be a big selling point to them.

by Juanita de Talmas on Jan 11, 2012 5:02 pm • link • report

Okay, so now you're calling it an indirect subsidy, which you say is definitely not a subsidy.

Glad we cleared that up.

by Gray on Jan 11, 2012 8:26 pm • link • report

The current proposal isn't as bad as the 2010 increases, but it's still being done in spite of the absence of an established funding plan.

My plan is simple. Send a monthly bill to DC, MD, and VA based on the number of bus and rail miles each state has. If MD and VA fail to pay, close their parking lots; if DC fails to pay, charge interest. Also, demand that the Federal Government pay a share of each state's bill.

by The Civic Center on Jan 12, 2012 12:58 pm • link • report

@ The Civic Center--

So you plan a blatantly illegal, unenforceable demand for payment designed to ensure WMATA angers the few supporters it does have?

Really, how do you imagine that as a realistic strategy?

by WRD on Jan 12, 2012 10:22 pm • link • report

Also note WMATA's audited financial statements for the year ending 6/30/2011 were recently made public.

by WRD on Jan 13, 2012 10:39 pm • link • report

It's interesting to see which regular commenters comments on which articles. For example, I wonder if the lack of comments from regulars on stories about WMATA are a sign that they don't use Metro for transportation.

by Geoffrey Hatchard on Jan 15, 2012 9:34 pm • link • report

DC is incredibly walkable, especially in the tourist areas near the Mall and Capitol Hill.

Unfortunately, most American tourists are incredibly lazy and will whine and bitch about having to walk more than a block or two, so it's doubtful this will be a big selling point to them.

Maybe it's the other way around? Americans have become lazy (and fat by all the latest medical reports/comparisons), because for the last 50 years we've been using the automobile and an extensive highway system as our modes of transportation (cars and gas were cheap).

I think if people have to walk, they will (if they can, of course--not talking about disabled or elderly here). Take NYC for example...the average NYC dweller walks 8 miles a day. Why? Cause they have few other options (Subway or Cab or bike) and in some cases it's easier/cheaper to walk.

I agree that DC is an incredibly walkable city. My partner and I walk everywhere..we even walk from CoHe to Georgetown (about 2 miles) to go to the movies and dinner and then walk back. It's flat 99% of the way and great exercise and easier than dealing with traffic/parking/metro/etc...we also notice we could bike now with CaBi (we haven't tried that yet).

I think the "build it and they will come" concept should totally apply to this situation. Make it so that walking (or biking) is the best alternative, and eventually, people will take it--and will hopefully improve their health in the process.

by LuvDusty on Jan 19, 2012 12:58 pm • link • report

I know it will NEVER happen, but you know what? I would like to see Metro adopt a flat fare based system. I don't like having a "distance-based" system or a system based on what time I board a damn train. This whole thing about having to go look up "how much is my fare" every time you go to a Metro station, I think, is absurd. I would rather know that it will cost me, say, $4.00 each way rather than having to do all this "fare checking" every time I board the train. NYC, Atlanta, and others have such a system. You go to the station, and pay the same fare, regardless of the time of day or how far you are going to travel. Why should people be penalized because they work during a certain time of day? Why should people be penalized because they have to travel, say, 5 stops or more, vs. 1 or 2? Just my thoughts. Again, I would like to see Metro adopt a flat fare based system, even though I know it will probably never happen.

by V. Brown on Mar 14, 2012 11:26 am • link • report

V. Brown, just think about it differently. There is one fare for all trips - the maximum rush hour fare. But sometimes, Metro gives you a discount. Problem solved. You're welcome.

by David C on Mar 14, 2012 12:24 pm • link • report

I also question how many people agonize about how much their trip is going to cost every time they get on Metro. What are the alternatives?

You don't have to know or care how much your trip is going to cost. All you have to know is you need to get from point A to point B, and that the relative cost is: BUS

Methinks most people who complain about how complex the fare structure is hardly ride metro, which means they are neither a large revenue source nor someone Metro needs to really be basing their structure around.

by MLD on Mar 14, 2012 12:31 pm • link • report

That cost comparison should be Bus is less than Metro is less than Cab.

by MLD on Mar 14, 2012 12:32 pm • link • report