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?
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.
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