City Bus Subsidies Are Not the Problem
posted by August 6 at 13:50 PM
onOver at Crosscut, Matt Rosenberg—senior fellow at the intelligent design-believing Discovery Institute’s Cascadia Center—argues that Metro should completely revamp its bus system, starting by raising bus fares to somewhere between $3.50 and $4.00—or, in reality, probably even higher, as rising fuel prices increase the cost of operating the system. There’s so much wrong with Rosenburg’s argument it’s hard to know where to start, so I’ll just take his points in the order he presents them in.
First, Rosenberg argues that eliminating one-third of all bus routes would be a smart way for Metro to save money. Because on-time performance is low on routes, like his, that are heavily traveled, Rosenberg believes the obvious solution would be to eliminate routes that have fewer passengers.
Cut the lowest-ridership routes, let’s say the lowest one-third, and re-deploy the buses and drivers to the busiest runs, where riders are most often bypassed. Where regulations require that regional sub-areas be apportioned a certain percentage of total Metro bus service, the King County Council should confront those mandates head-on. We could let politics undermine a common-sense re-deployment of limited resources. But let’s not.
First of all, I’m not sure where riders are getting “bypassed”—my experience, in eight years of riding the Metro system all over the city, is that a more common problem is buses that arrive late or, in some cases, early. (Number 9 driver, scheduled departure from Rainier and Graham at 9:07, I’m talking to you!) Although I certainly agree that Metro doesn’t always use its resources efficiently, cutting routes at a time when transit ridership is spiking (and gaining riders who’ve never taken transit before!) nationwide is asinine.
On a less market-driven note, let’s not forget that Metro is part of a government agency. Its mission is to provide transit service throughout King County, including to elderly, low-income, and handicapped riders who have no other way to get around. Eliminating routes in places like Blue Ridge, where ridership is sparse, would leave people without a way to get around—as the recent controversy over Metro’s Route 17 made abundantly clear. Rosenberg may not think those people matter—because they’re preventing him from getting service every five minutes from downtown to West Seattle on his route, Route 21, which already runs every ten minutes at rush hour—but transportation agencies exist to provide a service to everyone, not just selfish Republicans. Moreover, Metro already deploys fewer buses on routes that don’t get as much traffic; ever try catching the bus on Alki?
Second, Rosenberg argues that Metro fares should go up—way up—to reflect the true cost of riding the bus.
Currently, Metro fares pay for between a fifth and a quarter of the cost of running the system. Rosenberg would address this “problem” by raising one-zone fares (the fare you pay, for example, to ride from South Seattle to downtown) to $3.50 or higher, and raising the cost of bus passes by a third. (Rosenberg’s own bus pass, he mentions elsewhere, is provided for free by his employer.) This is foolish not only because it’s a sure recipe for depressing bus ridership, and thus reducing revenues (who’s going to pay $7 to commute to and from work when driving their car costs less?) but because it ignores the fact that fares (or tolls, or gas taxes) never pay for the true cost of any transportation mode. Hidden subsidies for driving are estimated to run between $3 and $7 per gallon of gas; yet raising gas prices to reflect the true cost of all those free roads, sprawling subdivisions, emergency service, highway patrol, and free parking spaces—or charging tolls, or congestion pricing, or any number of fees and taxes to end subsidies for cars—is anathema to conservatives like Rosenberg. They want transit to pay for itself; but they want roads for free.
And those hidden subsidies I listed don’t even begin to get into externalities. For example, carbon emissions from cars in the US cost an estimated $20 billion a year; wasted fuel and lost productivity because of congestion cost an estimated $78 billion a year; and car accidents cost an estimated $220 billion a year, for a whopping total of more than $300 billion. To pay for those externalities, which drivers currently create for free, drivers would have to be taxed at least an additional 10 cents a mile.
Taking transit instead of driving also creates a societal benefit that should be factored against its cost. Riding the bus instead of driving reduces the need for roads, highway patrol officers, and emergency service providers, and all the other subsidies and externalities I listed above. (Conversely, congestion pricing like the congestion charge implemented in London five years ago actually reduces driving.) Rosenberg’s premise that a trip is a trip is a trip (Hummer, bus, Blue Angels jet) simply sweeps all that aside.
Finally, Rosenberg argues that Metro’s bus service should be turned over to more “efficient” private companies—a standard Republican canard that one look at our “efficient” private health-care system should put to rest.
I do agree with Rosenberg that the 40-40-20 split (which allocates just 20 percent of all new bus service to Seattle) has got to be revamped, although probably not in the way he wants. Seattle has the highest transit ridership; it should get the largest share of new bus service. And I agree with him that pre-paid fares are a good idea—although, like everything government does, fare kiosks cost money, something conservatives like Rosenberg are hesitant to admit except when they’re advocating for spending cuts.
Ultimately, unpredictable bus service is an argument for more government funding, not less. Improve the system, and riders will come; make it prohibitively expensive, and they’ll stay in their (far more heavily subsidized) cars. It’s also an argument for fixed rail like Sound Transit’s proposed light-rail expansion, which has the advantage of predictability—something buses can never achieve as long as they’re stuck on same roads as all those heavily subsidized cars
word up
ECB, I believe he's referring to routes that serve places like transit centers and park and rides. I take a bus from the Northgate transit center, not because I drive there but because it is a 10 minute walk from my house, and often I have to wait for 2 buses to pass until one that has any room even to stand on comes. I used to live in Bellevue and this same situation happened at the Eastgate park and ride.
Well-written, well-reasoned post, without patronizing or belittling the opposing point of view. Nicely done.
ECB, just out of curiosity, do you ever talk to "crazy Republicans", or leave Seattle city limits at all to mingle with all those wacky people out there who don't share your worldview? Do you have any friends who don't nod in agreement with every pearl of wisdom you bestow on them?
In addition to the externality arguments, another reason not to raise fares is that the marginal bus rider costs the system almost nothing (except on crowded routes). It's socially optimal to charge the marginal cost (or less, if there are other policy considerations), and on most routes that cost is negligible.
The only problem is that you have to raise revenues somehow, so we end up charging a super-optimal amount. If we charge according to the "true cost" of riding the bus, though, we will charge very little.
You sure do get "predictability" with Sound Transit: the projects will go way over budget, what the voters are promised won't be delivered, and the completion dates never quite arrive . . ..
Give us light rail at the cost the people in other metro areas get it for. The new ST ballot measure doesn't come close to being a good deal for taxpayers.
Nice post.
I do know of one particular instance where riders are being bypassed: the 71/72/73 heading out of downtown between roughly 4:45 and 6:00 PM. The Convention Place tunnel stop often gets skipped because of full buses. But that's a relatively small incidence that could be remedied by adding just a couple more runs during those peak hours. Hardly in line with the magnitude of Rosenberg's freak out.
My girlfriend regularly gets bypassed by the 28 Express in the mornings because it's too full.
Your experience is flawed.
I'm not objecting to your comments, but I'll just say I ride the 15/18, getting on in lower Queen Anne, and I've been bypassed countless times. The bus fills up in Ballard, and the driver just goes right on by with a packed-to-the-gills bus, and I'm left hoping for the next one to be slightly less packed.
Spot on.
Like ECB I've never seen a bus bypass passengers unless it was so far behind that there was a bus in the same route less then 5 minutes behind them. (Of course, I've had drivers say that, and then be stuck waiting another 20 minutes for the imaginary "right behind" bus.)
The problem is more a case of standing. Standing on short trips isn't a huge deal, but standing for the entire length of a 40-minute highway-route commuter bus trip is a pain in the ass (well, more to the point, feet.) (Course, I get that on ST, not Metro.)
How about bus passes that charge you according to what you make each year? I think we could balance the budget that way instead of cutting service to the people who can least afford it, which is the right-wings answer to everything. I think we should charge people's moving violations according to what they make each year as well. That money should subsidize public transit.
You make a ton of good points. Rosenberg does pull the $3.50 figure out of thin air. But what do you propose to fill the hole in Metro's operating budget? I, for one, think that some sort of fare rise (50 cents?) is in order.
One other nit: I'm not here to defend privatization, but I think you misunderstand his argument a bit. He's not talking about privatizing Metro, but having Metro contract the operation of particular routes to companies using some sort of fixed bid. That's probably not a good idea, but let's get our facts straight.
I avoid Metro for two primary reasons. 1.) it's a rolling homeless shelter full of unpleasant people who I would rather avoid and 2.) it's an impractical form of transportation for anyone with any responsibilities. (Who on earth has the time to use it or the inflexibility of schedule to trust it to get you anywhere at a certain time?)
Where it is occasionally useful to go from point A to point B on a single route (if you don't have to be there at any particular time) it's completely useless if you have to change routs. Only the unemployed and the uber-wealthy have schedules flexible enough to rely on Metro.
Get rid of the damn free ride zone and increase the prices and require payment up front and you will remove one of the barriers to my using Metro.
Fix em both and I'll sell (or at least semipermanently park) my SUV... until then I'm going to keep enjoying the open road... which seems to be more open every time gas prices go up... (I'll gladly pay $10 a gallon if it means I don't have to waist my time sitting in traffic...)
But I don't think that Metro can spend is way out of its general fucked-up-ness... Its a cultural problem fostered by the system and its management.
Want to get people to ride bus lines?
Make the cars wait while they speed by.
And have giant signs overhead on SR 520, I-5, I-90, SR-522 that say:
Projected Travel Time
BUS - CAR - HOV
8min 32min 22min
Make it painful.
And clear.
And stop letting rural politicians build bus lines in areas where there really is no ridership beyond the park and ride.
Erica, do you know if KC has any data on how much money the Free Ride Zone costs Metro per fiscal year? Just curious.
ygbkm, SHUT UP! i am neither unemployed nor uber-wealthy and i use metro all the fuckin' time (as i don't own a car and am beyond reproach) and it works great for me. thank GOD you don't ride the bus, because if i had the bad luck to end up next to you, i'd joyfully bitch slap you from here to oblivion. and those who have met me at slog happy know i am all too capable of doing just that. square biz, upper class twit of the year.
There's a lot to process here, but just note on cutting routes/raising prices: Terrible idea. If Metro wants to get out of the red, they'll need to increase long term ridership, not cut expenses to meet short term goals. Eliminating or reducing routes is a recipe to lose ridership - not just on the affected routes, but everywhere - as Metro will be considered not an option to so many more people.
The bus already has the stigma of being "the bus" - the most they could hope for is "not that bad" - making it "the bus that never, ever comes and cost $4" will be its demise.
Of course if oil is the big expense here, the obvious answer is to start investing in rail now, like they should have when the government was giving loans away in the 70's, but that's another story.
@16, yeah, because we want county and state government to concentrate on making our lives even more miserable in order to force us into the "correct" behavior.
#17 - I believe a downtown business association pays Metro for the ride free area, but I'm not positive.
ygbkm, I'm not unemployed, and I'm not uber-wealthy. And yet I use the bus with no difficulty! It's called showing up at the bus stop with enough time so that even if the bus is a bit late you'll still get to work on time. Thousands of people do it every day, it's not hard.
i don't know what everyone has against the ride free zone. I live and work downtown, and run my errands downtown, and I use it a couple times a week. Usually I walk, and even if I'm going up to Belltown, I step off before I have to pay 3.00 (I have a dog = 2 fares) just to not walk 3 blocks. I could walk the whole way, but then I would never try new restaurants or go shopping on my lunch hour. It's good for business, and it's good for tourism, per my anecdotal evidence of hearing tourists say it's a good idea.
Perhaps the fellow from the Discovery Institute can create a new bus system from scratch in six days.
The #8 frequently has to bypass people at Denny and Fairview and Denny and Stewart around 5pm.
@23: but having to go through it is a nightmare. I work in West Seattle and live in Capitol Hill, and trying to push through a crowd to get to the front is ridiculous. Plus, people pile in any which way, so there's no moving to the back like one should do normally. It's a pain.
At the convention center in post 5 oclock the busses that are frequently over crowded and only let on maybe 2-5 people;
10,11,49,43,14
I don't ride the bus that often but there are times when i'd like to and I simply get too impatient waiting for one that doesn't seem like a safety hazard.
Another problem is missed revenue because of over crowded buses and drivers letting people off without paying through the back doors.
So Erica, your idea to meet the massive deficits public transit is running and which will increase as ridership increases is...more government funding? When Rosenberg mentions in his article that Metro now wants to use funds voters approved for augmenting service to cover its current level of service? Don't get me wrong, I'd like to live in that more-funding world. It'd be simpler. I just don't see it happening. Can we not talk about alternatives?
The #8 is getting more and more full in the mornings, enough to start bypassing passengers, especially if a school group or daycare decides to use it for transport to Seattle Center. Metro is not keeping up with demand.
Oh, stop whining about the Seattle bus ridership, ya little bluenoses. Ever been on a bus in San Francisco? Mwahahaha. You'd be in tears.
i've seen buses bypass stops due to overcrowding, but this is an argument for increasing metro resources not redistributing them. if you have increased demand you're supposed to increase supply not move it around.
that being said, as long as buses have to share the roads with single passenger cars they will always be unreliable. it would be nice if there were bus (and bike) only lanes, obviously not in the same place of course. i don't know how feasible that would be, but one can dream. and alternative forms of public transit to take some of the pressure off metro.
Oh, and BTW: this is an ECB post, right? What happened to the condescension, the snide doctrinairism? I'm flummoxed.
FUCK YOU NUMBER 11 METRO BUS. YOU MAKE MY LIFE HELL!
(less dramatically, bus transportation is almost completely impractical. i thought moving to the city would make a better commute. the hill buses take me as long as the 355 express from shoreline.
im getting a bike because 1) bus fair going up would suck even more than it does now and 2) they are constantly overcrowded, late, and they do pass people as the 11 did yesterday morning.
too bad seattle terrain is fucking mountainous and it rains 80% of the year.)
@32 - she's turning a new leaf. Which, even when people like myself attack her over minor quibbles, is much appreciated.
After all, if she was a lousy writer, we wouldn't bother.
Metro needs to:
-ditch the Ride Free Zone. Who are these people riding the bus around downtown and no where else? Plus, it's confusing to people. Do I pay when I get on or when I get off? Do I pay now, or is it free now? The Ride Free Zone is a waste of money and resources.
-LOWER the fares, but keep the fare just-above-free so that Metro doesn't become a roaming homeless shelter.
-keep the bus tunnel open 24/7 and send more of the routes through it to ease downtown congestion. Again, it's confusing to people. Is the tunnel open? Is it not? Where is my bus? On the street? In the tunnel? And getting from Chinatown to the Convention Center through the tunnel takes no time at all. On the street level, it takes for freakin' ever.
-create *actual* zones, not the over simplified "in-city" and "out-of-city" zones that we've got right now. (The fare from downtown to Capitol Hill should be cheaper than the fare from downtown to Rainier Beach. The fare between Capitol Hill and the U-District should be cheaper than the fare from downtown to Northgate.)
-close more downtown streets during rush hour (like 3rd) to encourage commuting via bus/bike/foot.
-incentify businesses to provide their employees with bus passes and to reward the use of public transit. Tax parking garages out of existance.
Oh, and, you know, run more busses more frequently and on time. That would help, too. The fact that the 49 runs once every half-an-hour (and is rarely on time) is insanity.
@22
I sincerely wish that I had an extra hour each day to spend waiting for the bus (I'm figuring a half hour each trip twice a day...)
@17 & @21
It's not the expense of maintaining the free ride zone I object to. It's the bums and winos. Many of which seem to believe that the Free Ride Zone extends all the way down Elliot Ave West and through to Discovery Park. (The few times I have used the bus to get home the fetid air on board has been positively unbreathable from the stench of sweat and piss radiating off of bums and winos.)
Go ahead and keep the free ride zone if it's good for business, but convert it to a single looped route that only serves the Free Ride Zone, and require paid admission prior to boarding all other routes. Maybe then the buses into and out of the city will have fewer psychotic sociopaths on them and people (like me), who avoid Metro now because of that, will start using it (if I ever find that extra hour...).
Uh, that Sierra club figure of $3-$7 does include externalities, and in fact handels them in such a ridiculous way as to make the number completely meaningless.
They say that $3-$7 number includes "road construction and maintenance not covered by gas taxes; police, fire and ambulance services to motorists; taxes lost on land cleared for freeways; free parking; pollution; noise and vibration damage to structures; global warming; protecting the petroleum supply line; production subsidies; sprawl and loss of transportation options; uncompensated auto accidents; and congestion"
This is not an externality calculation that any serious independent economist would endorse. It's just a grab back of any negative thing the authors could think up and attach a price to. They didn't account for any positive externalities at all. And most of the "losses" they list are to systems that only have the value they do because of road infrastructure (e.g. land values, fire and ambulence services, buildings to get vibrated).
Samantha: I agree with you on everything except for lowering fairs (I think they should be moderately increased) and closing downtown streets (that's why the bus tunnel is there).
And by the way, didn't there used to be a hell of a lot more routes that went through the bus tunnel before it was closed and reopened?
As I recall the fucked up mess on Third was supposed to be "temporary" while the tunnel was refitted, and then all those buses were supposed to go back into the tunnel. What happened there?... (what, there's like only (maybe) 10 routes that use the tunnel?... Hell, if the buses aren't going to use it, open it up to cars... (or at least bicycles...)).
1. Well we do need more busses on those crowded routes so how're we gonna pay for them? That's the issue.
2. What's predictable about light rail is it isn't going to go most places and it will take 15 years or to be more realistc, say 20 - 25 years.
So we need something now.
@YGBKM: Maybe you ought to consider moving to a spot (that'd be most places in the city) where bus service isn't half bad and stop acting like 30 minutes waiting for a bus is the norm? Or give your brain a break from vitriol about "bums, winos, and my SUV" and use it for a bit of outside the box thinking.
PS: If your Elliot/Discovery Park references place your huge car in some huge driveway of some huge house in that hugely ridiculous pseudo-neighborhood called Magnolia then start lobbying your NIMBY neighbors to quit bitching about buses on their streets.
@40
Not to sound revolutionary, but here's how to pay for them. Require Metro to be self sufficient (and incent Metro to create an operating profit).
Then Metro might have an actual reason to:
1.)Get their buses where their supposed to be when their supposed to be there
2.) Increase services on profitable routs (where there is unmet demand)
3.) Eliminate service where there is little or no demand. (I see buses running empty (or with one or two people on board) in my neighborhood all the time... And thats not very Green.)
4.) Price their service at a market rate, and stop giving it away for free
Before municipalities involved them selves in providing public transportation there were highly effective private companies that meet that need...
@41
ByBus.org kind of helps with scheduling (changes where you wait for the bus that never comes) but it completely lacks a feature to tell you which buses are psychopath and urine free...
I'll ride Metro as soon as my bus is reliable, convenient & on time and clean & comfortable.
That really doesn't seem like to much to ask for...
Until then, its really not worth my trouble.
(And I don't see that happening by throwing more money at Metro.) We need real change, not just more spending.
From my experience of having my car wrecked on Capitol Hill by a drunk driver last year, these are the bus times I figured out:
40 minutes to get from U-district to Ballard + waiting time.
45-60 minutes to get from U-district to Northgate + waiting time.
30 minutes to get from U-district to Capitol Hill + waiting time.
25 minutes to get to downtown; 45-50 to get to Seattle Center.
These are all 5-15 minutes by car, on most days. The bus more than doubles most travel time, and triples in some cases. There is no quick route to get from U-District to Seattle Center. And, this doesn't count bus interchanges.
This doesn't even mention that I used to live in an area of the U-district where I had to either wait 15 minutes for a different bus to take me to a transfer point or walk 1.5 miles to get to the hub of the area adding that much more time to my trip.
Its nice if you happen to live in a place that is 3 blocks from a variety of bus stops. But, if you happen to live in a place that is miles from anything, you don't get a chance to do anything.
For those who don't acknowledge that there are limitations to the bus service, they really have blinders on, or a lot more free time than most do.
...
And, ECB, while I liked this post because it tended to shy away from the shrill condescending nature you generally have, there are two points I feel weaken your point. 1) Your assertion that riding the bus reduces the need for roads...those things you ride your bikes on. And, 2) You shouldn't quote dubious facts from the Sierra Club. They're a bunch of assholes who make up numbers from thin air then assign values to them. The Sierra Club shouldn't be taken seriously by anybody who considers themselves a free thinker.
I'm a huge fan of the bus, but it's not always the best option.
I love my express bus- I spend the same amount of time commuting to work as if I drove, but I get to read or sleep instead of cursing traffic.
However, my husband drives to class- it takes 2-3 times as long to ride the bus to class, and we calculated that it only cost 50 cents less to ride the bus (and that includes him coming home for lunch, which means he doesn't have to eat out).
It is very unwise to go with what everyone else is saying- people need to closely and honestly examine their own situation to determine the best options for them.
@39: There are fewer routes running in the transit tunnel in anticipation of the light rail service starting next year. These same routes will be combined with trains.
Why not just ditch bus fares altogether? Seriously--no fares to travel between any two points in King County.
If public transit is a public service, why should we be paying fares?
Set it free. Let's see what the real demand is, instead of having this weird U-shaped curve of affluent MSFT folks commuting across the lake, and folks just scraping by who can afford to wait 30 minutes for that bus that might come in 45 minutes.
Make transit accessible to the middle class, and not just the affluent and the poor. Get buy-in from everyone.
Since everyone else is spewing off ideas on how to improve transit ("we should lower fares to just above free", "no we should slightly raise them") I'll tell you best way to get around the city.
Ride a bike.
I moved out here with a car. Completely unnecessary and paying for parking ($130 a month) and riding the old white bus #7 were the final straws. I sold it, bought a bike and some rain gear at REI, signed up for Flexcar, and occasionally rent a car (~$25 a day on the weekends). Personal transportation problems = solved.
The point that these conservatives always, always, always miss is that the reason Metro, and every other transit company in the United States, is run by government, is because THEY COULDN'T MAKE MONEY WHEN THEY WERE PRIVATE COMPANIES!
Amtrak was founded because the private railroads couldn't make money on passenger trains after the post office pulled their subsidy.
The airlines receive huge indirect subsidies (hello, Port of Seattle). The highways are a socialist program. The automobile and oil industries get huge tax breaks. Why should transit be expected to pay their own way?
And most importantly - listen up, conservative pinheads - if we increase the bus fare, how will the maids, waiters and sales clerks get to work? Especially since none of "those people" can afford to live in the city any more.
Cutting routes to save money is like cutting off your toes to lose weight.
For folks like the Discovery Institute, the idea that subsidies (for transit or anything) is bad is very much a matter of faith - because it's certainly not the result of sound economic analysis. There's a topic in microeconomics called "natural monopolies" which concerns itself with the cost and price structures of certain enterprises which, because of high fixed costs, are best undertaken by one entity only. Without going into full econ geek mode (I'm strictly an amateur econ geek anyway), the point is this: for these activities, at the price at which supply and demand are in balance - where you want to be, because there is no unmet demand left in the economy, and no unrealized revenue due to overly low prices - the marginal costs of the activity (say, operating a transit service) are higher than the price. In other words, the activity cannot support itself.
If you raise prices to where all costs are covered, you have enormous unmet demand. This is a problem, because transit is an important part of the economy, and when an economist says "unmet demand for transit" what that really means is "people cannot get to jobs, school, etc." And that is a big hit to the economy.
So, we do the economically sensible things: we award the right to operate these businesses to one private entity or a public entity, we subsidize it, and we make it possible for it to operate at a price point at which the public need for the service or product is met.
Subsidizing public transit is not some socialist scheme, it's good public policy based on economic reality. Now, if your opposition to subsidies is religious - as in the case of the DI people - that's unconvincing. If you live in reality, it's an issue that needs to be dealt with.
Those who oppose subsidies, therefore, need to make a good case for why either the economic analysis is wrong, or that there is an alternate means of satisfying demand. This often can be done; things that were once natural monopolies may cease to be such because of changes in technology, for example. But the case has to start with economic reality.
The privatiziation argument is different (& not terribly strong). I think you can make a reasonable case for privatizing specific functions of a public entity - for example, cleaning of the stations, maintenance, training, HR functions, and so on. Of course, to work properly, such privatization has to be managed very strictly to make sure that the public is getting the same service at a better price, not second-rate service. There really aren't a lot of examples out there of anyone getting anything but tiny marginal benefits out of this - which is not surprising, since the economics of private firms require than their revenue cover not only the cost of providing the service but an acceptable profit margin for the private firm's owners. So privatization starts out a step behind, because there's an additional cost to everything built into it.
And one always must ask, "If a private firm can be more efficient, can't public entities realize the same efficiencies through better management?"
Finally - it perfectly reasonable for a society to decide that other benefits of public provision of these services are worth the cost.
The case against public transit subsidy is usually positioned as a hard-headed economic argument, but it's not; it requires willful ignorance of basic economic principles. Don't be fooled.
Regarding the suggestion of eliminating fares: it's appealing in many ways, especially when you consider that you could eliminate the expense of fare collection systems. (It's also a political bombshell because it eliminated a whole bunch of jobs, too.)
In economic terms, though, it has a big problem - it encourages inefficiency. Human nature being what it is, when the price of something is zero, it gets overused - by which I mean not a value judgment, but an economic judgment - people use the service when they wouldn't with even a minimal fare, because the costs are less than the substitute service (for example, walking, which has costs in terms of time, personal energy expenditure, etc.). So you find demand goes up, the overall costs of the system go up, requiring yet more subsidy (and you will pay for that in your taxes).
In economic terms, you're at maximum efficiency at that price point where supply and demand are in balance. In human terms, of course, you want to accommodate users for whom even a minimal fee is a problem, generally with discount programs for the elderly & disabled, extremely low income, etc.
Transit systems would do well do some serious study of price and demand to figure out what the ideal point is, and using flexible pricing systems that adjust for this (for example rush/non-rush fares), and of course the most efficient fare collection systems they can find. Electronic fare collection can actually be a big boon to a transit system if they do their homework and take advantage of the flexibility it offers.
Uh, John, Metro already does peak/off-peak and a modest degree of distance fares. And fare collection doesn't get much more efficient than having prepaid passes.
There's probably a case to be made for twiddling with the pass share and trying to get it higher. This makes fare collection even more efficient, and stops the long line of people waiting to pay when they get off the bus. Of course, it also opens Metro to charges that they're forking over the poorest of the poor. Can't win 'em all.
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