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Higher fares for late-night transit discourage ridership

Come spring, Boston's transit system, the Massachusetts Bay Transit Authority (MBTA), will start offering late-night service on all subway and 15 major bus lines. Like Metro, MBTA may charge higher fares for it. Could this discourage transit use?

Photo by Justin Baugh on Flickr.

Currently, the MBTA shuts down shortly after midnight seven days a week, leaving revelers and workers of unusual hours with no recourse but automotive ones. Under the new schedule, which is a one-year pilot program, Boston will match DC's practice of staying open until 3 am on Saturday and Sunday starting this spring.

The announcement was a big deal to native Bostonians like myself, who for years have been frustrated having to choose between staying out late and being able to get home. However, the MBTA is also considering emulating WMATA in another, less desirable way: charging higher fares for late-night service.

The MBTA may consider charging $3 or $3.50 after midnight instead of the usual $2 fare for a train ride. (Boston has a flat fare that does not increase, even during rush hour.) It's not hard to understand why WMATA charges rush hour fares during the wee hours, and why the MBTA might want to follow suit. Late-night public transit is a niche service that only a small subset of the population uses.

Rather than spreading the cost of providing it across the whole transit-using population of greater Washington, late-night riders should have to pay a little more to support their customized service, right? Put another way, if WMATA is expending a constant amount of resources for fewer-than-usual users, each user needs to pay more than usual in order to meet budget.

The problem is that Metro does not apply this logic evenly. If you accept this premise, then fares should actually be lower during rush hour, when huge ridership will never have any problem sustaining even elevated frequency of service.

Instead, the correct pricing principle is one that conforms to supply and demand. Metro rightly charges peak fares during rush hour precisely because that is the busiest time of day; it knows most commuters don't have the choice to be scared away by sticker shock then, and if they are scared away it knows it can absorb the blow.

Higher fares serve to some degree as crowd control; if we have to discourage transit use (which higher fares necessarily do), we ought to do so when transit use least needs to be encouraged. And, most elegantly, people rightly pay higher fares when they are causing the most strain on the system, helping to offset the wear and tear caused by rush-hour crowds.

The flip side of this, of course, is that WMATA, and the MBTA that seeks to emulate it, should charge its lowest fares when the system is least crowded. These are the times when transit use needs more incentives, and of course entrance fees are one of the most surefire ways to manipulate that.

By charging peak fares between midnight and 3 am, Metro is creating a deterrence, even a small one, to people taking public transportation. Crucially, peak fares after midnight also do not come with the benefit of extremely frequent trains that accompany rush-hour peak fares.

Of course, there is always the chance that fare manipulation may not have a huge effect on ridership after midnight. In that case, by charging off-peak fares, WMATA would give up revenue it currently relies on. However, it's dubious to think that the laws of pricing dynamics cease to apply after midnight.

Perhaps Metro volume is fairly inelastic during rush hour, when many people have to commute to work no matter what, and when many people feel that they have no other choice but to take the train because of DC traffic and the cost of car ownership. But people certainly do have a choice about whether and how to travel late at night. Lower fares after midnight would not only result in that many fewer Uber trips, but more importantly, they would entice more people to go out.

The upside-down fare system is unfortunate in DC, but in Boston, it could be fatal to its experiment of late-night service. MBTA officials will only make late-night transit permanent if enough people use the service during the one-year trial period. If higher fares deter people from taking the train, the MBTA may very well determine that there is not as much demand for the service as it thought.

This is a realistic worry; $3.50 doesn't seem like much, but it's a 75% increase on the fare Bostonians are used to paying; and for a group of four friends out at a bar, a taxi ride would only need to cost $14 to be an equal or better deal. Indeed, excessively high fares were one reason Boston's previous foray into late-night service, "Night Owl" buses that cost up to $4 one-way, went under. (The Night Owl's failure to attract riders is more proof that late-night ridership is not inelastic.)

Thankfully, because Boston is just reacquainting itself with late-night service, there is still time to avoid these mistakes. DC has fulfilled an important role by serving as the Boston's likely model for late-night service; a fellow cash-strapped system that needs all the overnight maintenance it can squeeze in, WMATA showed the MBTA that late-night service was still possible.

It's probably no coincidence that Boston is adopting the same weekend schedule, but that doesn't mean it should copy DC's methods wholesale. At least in the way late-night fares are structured, Boston can and should do better.

Nathaniel Rakich, a Massachusetts native, writes about politics and baseball at his blog Baseballot. A veteran of Vice President Bidenís speechwriting office, Nathaniel has also written for The Atlantic, Grantland, and Let's Go Travel Guides. He is a graduate of Harvard College, where he wrote his senior paper on transit expansion, and a current resident of Washington, DC. 


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" for a group of four friends out at a bar, a taxi ride would only need to cost $14 to be an equal or better deal."

That would only be true if the group of four friends shared a house, or at least lived close enough to each other that they could easily share a cab.
I think in a situation like this, you have to look at the total price -- $3.50 -- and say that for most people, that is still a much cheaper way to get home than the alternatives. For that reason too, I think that the demand for late-night service actually is somewhat inelastic, somewhat like rush-hour service -- if people are responsible and don't want to drink and drive, then the only alternative is a taxi, which will cost a lot more. I acknowledge that there is a significant difference from the inelasticity of rush-hour demand, in that while people have to go to work, they don't have to go out partying on Friday and Saturday nights and could decide to just stay home rather than pay the extra transit fare. Still, the cost of round-trip public transit is going to be less than the cost of a drink at most DC and Boston nightspots, so I'm not sure it would really discourage that many people from going out.
The political reality behind this sort of pricing is that transit systems don't want to ask other riders, or the government, to subsidize the lifestyles of young people who like to party late into the night.

by MIke on Dec 11, 2013 1:01 pm • linkreport

late-night riders should have to pay a little more to support their customized service, right?

No. They should pay the same fare as everybody else. A fare is supposed to contribute to the cost of your transportation. That cost is relatively flat because labor is only a small part of the cost. So, everybody should pay the same fare. Every other payment method is just ripping certain people off.

for a group of four friends out at a bar, a taxi ride would only need to cost $14 to be an equal or better deal.

Unless off course, if Boston also has a 'no-shared-rides' policy in their cab world.

by Jasper on Dec 11, 2013 1:04 pm • linkreport

I guess the late night rider argument is the same as the peak hour one. It's a captive audience. The balance is somewhere between using supply and demand to optimize maximum usage and maximum profit. The main advantages of transit are for single riders to keep down cost, keep extra vehicles on the road, and in this particular case to keep drunk people from getting behind the wheel.

On the other hand the argument can be made that with the introduction of a new service it's wiser to subsidize fares to a great degree to grow the market, and consider raising them in the future when needed. Many businesses understand the principle of using such incentives to attract new customers early on and I don't see why transit should be different.

by BTA on Dec 11, 2013 1:15 pm • linkreport

Another possible way of looking at it logically is that Metro is charging the most when its costs are the most.

Rush Hour service requires the stocking of significantly more rolling stock that is only utilized along parts of the day on five days of the week. In addition, staffing Operators on peaks only results in increased pay premiums in spread time penalties.

Extended late night service on just two days only requires that service, particularly that run on Friday vs. a normal weekday (though also from Saturdays vs. Sundays), be accomplished through the same number of Operators and Station Managers, and thus is done mostly through Overtime pay premiums in comparison to the schedule on which it is based.

I certainly agree that the logic presented here has validity and that the pricing is always open to revamping, but I can see where there are other logical ways of viewing it as well.

by A. P. on Dec 11, 2013 1:19 pm • linkreport

for a group of four friends out at a bar, a taxi ride would only need to cost $14 to be an equal or better deal.

Transit usually has a trouble with groups of 4 friends. Driving, cabbing, or otherwise using a car is cheapest when you fill all the seats and it makes for an unrealistic comparison. Similarly one person transit usually wins easily. Two people, a couple, is probably the best way to compare.

by Richard on Dec 11, 2013 1:54 pm • linkreport

@ AP:Another possible way of looking at it logically is that Metro is charging the most when its costs are the most.

But the cost for running a train are always the same.

Rush Hour service requires the stocking of significantly more rolling stock that is only utilized along parts of the day on five days of the week.

True, but once purchased, those trains need to be paid for, whether they move or not.

by Jasper on Dec 11, 2013 2:00 pm • linkreport

You can think of the fare increase at Rush Hour being one to supplement maintinence on / purchase of additional capacity. If the system degrades, rush hour is what is hurt. With half the current fleet metro could run off peak service. The extra $$ helps them run a larger, better maintained stock to serve rush hour.

The fare increase at night is to supplement service. Metro likely loses tons of money after 10pm but needs to stay open to provide the opportunity for people. The increase defrays the loss of money a bit.

by Richard on Dec 11, 2013 3:00 pm • linkreport

Wouldn't the fact that a larger proportion of Boston T users likely use monthly unlimited passes ($70) than WMATA riders and WMATA monthly passes ($230) impact the choice to take the T?

AKA, for a lot of people late night T service is essentially "free" as opposed to a cab. If you have a group of 4 very cheap/price-sensitive people (say...grad students), a cab will probably be cheaper than paying individual $3.50 T fares, but if everyone has passes than it's "free" to take the T.

Obviously, if this nighttime service isn't covered by monthly passes, this wouldn't apply.

by Andrew on Dec 11, 2013 5:17 pm • linkreport

@Andrew I wouldn't be surprised if a much larger proportion of T riders use the monthly pass -- it's what I did in Boston for 4 years. They seemed pretty ubiquitous (for students at least).

by Arthur on Dec 11, 2013 8:36 pm • linkreport

There are basically three types of people on transit overnight:
1. Late night workers: Often lower-income, often lack alternatives, this group tends to use services all nights of the week.
2. Revelers: Often younger, with varying income levels this group tends to ride on Fri and Sat nights.
3. Homeless: Very poor, and use the bus for overnight shelter, this group tends to ride when they are unable to use shelters designed for the homeless for whatever reason.

Revelers often (but of course, not always) tend to be over the drinking limit, and are stuck between choosing whether to ride in the back of a Crown Vic home or to the police station. Given that a taxicab ride home can easily cost $10+, and a DUI can easily run over $10,000, a late night transit option, even if it charged $5 per ride, would be a great alternative.

I don't have any data beyond educated guesses, but it is reasonable to assume that late night workers have a demand profile similar to their daytime counterparts. As nighttime and daytime workers both use the transit system in the same way, it may be rationally argued (and acted upon, through not patronizing the transit system) that either shift should not have to unduly pay more than the other.

Homeless riders are more indicative of the lack of proper social services, with their increased use of the transit system as a hotel a side-effect of failed social services. On one hand, they don't currently have anywhere else to go (especially on cold nights). On the other hand, the transit system isn't a Motel 6, and no other business is likely to tolerate the homeless using their facilities in this manner.

As revelers are basically a captive market, and late night workers may be poor enough to effectively be a captive market, this would suggest some room for a higher farebox recovery ratio (through increasing fares) may be reasonable on overnight routes. As a compromise, perhaps charge ~$3 for one-way trips late at night, while allowing monthly pass riders to ride for no additional charge may balance the competing interests of revenue and social justice.

by Zmapper on Dec 11, 2013 9:16 pm • linkreport

I haven't seen anyone here mention the fact that maybe we should subsidize late-night service to keep drunk drivers off the road, because often the only inexpensive alternative to public transit is driving.

Late-night service is a public good which allows people to live in cities without cars. Without it, I would have to keep a car (and use it, though not to drink and drive) for off-peak times. You can't have a livable car-free experience in a city without late-night transit, especially if it's a disproportionately young city.

by Zbbb22 on Dec 11, 2013 9:22 pm • linkreport

And, most elegantly, people rightly pay higher fares when they are causing the most strain on the system, helping to offset the wear and tear caused by rush-hour crowds.

How do you figure? In what way do larger crowds during particular times (like rush hour) cause more wear and tear to the system?

by Mister Goat on Dec 11, 2013 10:42 pm • linkreport

"The MBTA may consider charging $3 or $3.50 after midnight instead of the usual $2 fare for a train ride."

The MBTA stated that the late-night fares will be the same as the regular fares when they announced the service. But that wouldn't make much of an article, so, sure... beware, because maybe this terrible idea is something that they will consider!

by Straw Man on Dec 12, 2013 9:46 am • linkreport

Heres a question how many trains do WMATA actually use per line on weekends at night or any weekend when there is track work (almost every weekend)

Trains are commonly running every 20 or 24 minutes with that they need not more than 4 or 5 trains per line.

I actually take the train from work on the weekends after midnight and quite frankly it pisses me off that every single week trains come at different times (missing one is a b***h waiting at an outside station for 20 plus minutes)and the fare which is over 5 dollars for horrible service.

Metrobuses that operate after 12am run better than the train most of the time so there is no benefit to taking the train unless there is no going to a station

by kk on Dec 12, 2013 3:20 pm • linkreport

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