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Originally Posted by Truenorth00
This is poor economic analysis. Marginal utility. Econ 101. The pass becomes more valuable because it enables shorter, more discretionary trips. It's not folks who occasionally use transit, taking the LRT two stops or the bus a few blocks. It's people with a monthly pass. Whether you charge and cap (which is done on some GTA systems with Presto) or have a flat pass fare, makes little difference to this behaviour. Indeed, the entire point of charge and cap is to actually encourage transit usage by effectively giving "free" rides beyond normal commuting usage that pays for the pass.
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If I understand you correctly, you're saying that anyone who takes transit frequently will inevitably reach the cap and, knowing this at the start of the month, wouldn't modify their short trip-taking habits.
I actually don't disagree with this. But we're not dealing with the idealized
economic man. A lot of people don't exactly know how many trips they'll make in a month. After all, the breakeven for a $120 transit pass is 17 round trips out of an average 20 work days/month. If there's one long weekend, one sick day, and one day when you take a different mode, you're below your breakeven. If you throw in off-peak pricing, then it's even more likely that you end up spending less than $120 in a month. So for most people, there's a very real possibility they won't get to their cap, and therefore every trip has a marginal added cost.
You'll note that I never claimed that short trips can/should be banned or done away with entirely. The fact that there is that very real possibility of saving a bit of money is likely to cause most people to make smart trip choices. Some people won't, and that's fine as long as that number is low enough to keep the overall system working well. After all, the difference between a busy bus line and a line slowed by overcrowding is a pretty small number since crowding is a non-linear phenomenon.
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What transit has a problem with is not general usage, but usage at specific time periods. The normal solution to this is to charge a premium at peak. But that can only work if you have road tolls as well. Otherwise, you get substitution. Commuters will drive instead of taking the train. Have peak road tolls and transit fares and then your peak demand curve will actually get flattened.
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I totally agree with congestion pricing. I think both should be implemented. However, I'm not sure if peak transit pricing would be enough to get people into their cars. After all, if we don't increase the peak cost and just reduce the off-peak cost, the price of transit at rush hour vs driving hasn't actually changed. So the calculation of "should I drive or take transit to work" hasn't budged.
Even if it were to increase to offset the cost of reducing off-peak fares, it may still be advantageous to ridership overall. Transit pricing is far more elastic in off-peak (-0.39) than at peak (-0.18). That means that a 30% increase in price at peak (to $4.5) will translate into a 5.4% decrease in transit ridership at peak, but a 30% cut in off-peak fares (to $2.45) would result in an 11.7% increase in ridership.
(Keep in mind that not all of that increase/decrease will come from driving - elasticity is likely to be higher for people who can walk/cycle and much lower for people who'd otherwise drive because the cost of driving remains much higher. Moreover, since the fare increase would also come with a fare decrease, a large number of people no longer travelling at peak are likely just taking transit 30 minutes earlier or later.)
Essentially, you're right that higher prices affect modal share. But that's much more the case off-peak than during the peak hours. Congestion pricing is a powerful and effective policy, but it isn't a precondition for peak transit pricing.