Wednesday, April 04, 2007

a bus fare too far

misc. musings on small buses, transportation expenditures and bus fares........

Small Buses

I have heard a lot of people that say the Port Authority needs to run more small buses as a means to save money and routes. There is a very insightful article in the Times (as in the St. Cloud Times) by David Tripp of St. Cloud (Minnesota) Metropolitan Transit Commission explaining why small buses don't make economic sense. Whether you agree or not it is certainly worth a read.

Transportation Expenditures:

Not new info, but the census is updating it's consumer expenditure survey soon and put out this PR with the most recent information on consumer expenditures for transportation across 24 metro areas. Pittsburgh comes in high for the percentage of expenditures spent on transportation expenses.:18.7%, which places it higher than 18 of 24 MSA's. That is higher than all nearby regions and much higher than Cleveland for example which comes in at 15%. All of the regions with a higher %'s than Pittsburgh are pretty far away, the closest looks like Houston(19.5%), the others being Phoenix(21.5%), LA(19.7%) and San Diego(18.9%) and Anchorage(21.2%).

Bus Fares:

Which brings me back to a post I started last week. Last week's news on port authority service cuts is half a story. They scaled back the immediate cuts a bit, but really the story is that most of the cuts were postponed a few months, nothing more. They also deferred the decision on whether to raise the base fare and by how much. They have discussed new fares on the order of 2-$2.50. A raise to at least a $2 base fare seems certain. They have signalled that the increase will be at least that much. If for no other reason than the ease of collection for a whole dollar amount makes some sense. I would be a little curious if they have ever generated statistics on the number of riders who actually pay $2.00 anyway just because they don't have exact change.

But what if they really go to $2.50? It's a little hard to imagine they are even considering it when you consider how high that would make local fares compared to anywhere else in the nation. I had a post a while back which listed the highest transit fares in the nation currently.

Here is a thought on comparing bus fares to other regions. Despite their own mischaracterizations, one of the criticisms in the report of the state's Transit Funding and Reform Commission was not that Port Authority operators were paid a lot compared to their peers. They aren't. But to convolute a point they tried to make a case that if you account for different costs of living in different regions local wages were higher than elsewhere. I could quibble with their methodology, but the more interesting question is whether the powers-that-be use that argument consistently. I actually think Ed made this point first in a comment here long ago. If you rely on that cost of living argument, to be fair you have to apply it to comparing bus fares as well don't you? To use it just for the operator wages, but not for analyzing bus fares is just a tad bit hypocritical. Even in nominal terms Port Authority fares are currently one of the highest regular fares in the country. After this hike, local fares will float ever closer to the highest in the nation. But again, this argument about cost of living goes like this: because some costs (note I didn't say all costs.. it's a crucial distinction*) are lower in Pittsburgh, then a given $ amount goes farther here. Thus the already exorbitant bus fare, is even higher when you compare it to local costs. If you adjust for regional differences in the cost of living, the same way the state did for wages, is the Port Authority fare going to become the highest in the nation? If so would that make it the highest in the world, or does it already have that distinction? Somebody ought to calculate a bus-fare to housing cost index for major cities. Or better yet, a bus-fare to rental cost index might be more appropriate. Curious why they would go to the effort of figuring out a cost-of-living adjusted operator wage, but not bother to figure a cost-of-living adjusted base fare. Anyone?

All that aside, there is another aspect to this that gets to the core of the Port Authority's future. Many riders of public transit have no other means of getting around. For them, they will be forced into paying whatever the bus fare is set at. There are a lot of people who are not forced to ride the bus, but choose to do so. Some would argue that this is something we want to encourage. Raising fares to one of the highest in the nations is not exactly a strategy to do encourage higher ridership. One of the 'mysteries' downtown seems to be why port authority ridership has been declining in recent years. Some of that is sheer population shifting within the region as people move out of the city and into suburbs less-served by public transit. But I am sure there was a real impact of the fare hikes that happened in 2001-2002 that pushed fares up by 40%. Even if low, there is an elasticity of demand for many riders: a potential 75 cent hike (what is that: another 43%!) is going to pull people off of the bus and push them into their cars. Even among people who don't have alternative transportation options, that big a fare hike will force some off the bus. A lot of the fare-induced shifting away may not happen immediately, but as ridership erodes in coming years, that will be a big part of the reason.

Elasticity of demand is just another reason I am pretty sure the port authority is undercounting the projected ridership loss.. if not immediately, certainly in the longer term. They now say that they expect only a 4% ridership loss with their interim cuts, but I bet that is based mostly on the route changes and the number of riders who are losing the routes they normally travel on. I bet they are not counting any anticipated ridership decline on other routes that are not cut, but will now be both more expensive and more crowded.

* The state''s report uses the ACCRA cost of living index (COLI). The COLI is valuable tool and I have used it myself. It is important to note, as ACCRA very clearly discloses, that the COLI is targeted for "a professional and/or managerial household". There is no reason to assume that the regional cost of living differences are the same for other workers, an in particular blue collar bus operators. In fact, things that everyone uses like gasoline and food costs show much less variance across regions than say large suburban homes.

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