The Chron just wants to cut transit

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Interesting that the Sfgate.com poll running along with the Matier and Ross item on transit agency deficits only cites four possible solutions: Cut service, cut employee pay, raise fares or "get in the bailout line." I realize that the Bay Area's transit agencies don't always work well together and duplicate some service, and that some managers are overpaid, and some money is wasted on consulting contracts. But I also know that in a recession, the price elasticity of demand for transit (warning -- deadly report) is pretty high. That means when you raise prices, fewer people ride -- and at a certain point, you wind up losing money by hiking fares.

And I also know that transit systems are one of those government services that, like schools, almost always get better when you throw more money at them.

We have been systematically underfunding public transit in this state and this country for decades -- and now we're surprised that the agencies are running out of money? Of course, the Sfgate readers all want to cut employee pay -- that's an easy scapegoat -- but I wonder what would happen if the poll included "raise gas taxes and parking fees to fund fast, clean, efficient public transit." I know what I'd vote for.

 

Comments

Tim - Which price elasticity for transit do you consider "pretty high"? The report you linked to has transit price elasticities between -0.27 and -0.46 for smaller cities like San Francisco. Those numbers denote that demand is not very price-sensitive - a 1% price increase causes demand to fall less than one percent.

For comparison, the price elasticity of milk (page 16) has been measured between -0.076 and -0.34.

Transit sounds pretty price-inelastic to me. Based on your economic analysis, fare increases would be the obvious fix to MUNI's problem. Your gas taxes and parking fees fall in the Chronicle's "bailout" category.

Posted by Kupperberg on May. 03, 2010 @ 4:35 pm

I posted that study to give people a sense of what price elasticity of demand means. It's all about options; if you can substitute something else for your product, and the price goes up, you'll stop buying it. In some cities, New York, for example, there's not a lot of choice -- you live at 86th and Lex and you work downtown, and it' s winter, you can take the subway or you can take a cab. Or you can stay home. In San Francisco, where it's mild most of the year, you can walk, you can bike -- or, because it's not as congested as Manhattan, you can drive. Lots of people do. When the cost of Muni -- fare price plus opportunity cost (time wasted, inconvenience) plus unpleasantness of the experience exceeds the cost of taking another mode of transportation, people will switch.

So in fact, in San Francisco, fare increases have a greater impact on ridership than they do in many cities.

And gas taxes and parking fees aren't bailouts, which are one-time solutions; those are steady, ongoing revenue streams to improve public transit. Make it faster, make it cheaper, make it easier and more people will do it -- which is what we all want in a transit-first city.

Posted by Tim Redmond on May. 03, 2010 @ 7:30 pm

The transit death spiral pushes the elasticity envelope by making transit less attractive due to service cuts, crowding, long waits, slow speed, etc.

Posted by Guest on May. 03, 2010 @ 8:20 pm

As a practical matter, yes, there are some reasonable alternatives to Muni. and if people walk or bike to work, that eases congestion and pullution which is a good thing.

I read somewhere earlier today that in the Bay Area as a whole, an extra billion dollars is needed to fully subsidize existing piublic transit routes and schedules. Unless Tim happens to know of a large rock with a billion dollars under it (and no "tax the rich" line, pul-eeze) then we are only debating where to cut and not whether.

Personally I am still struggling to understand why a Muni trip costs the same as a 20 mile subway trip in NYC. Then again, I'm not sure I want to know.

Posted by Tom Foolery on May. 03, 2010 @ 9:29 pm

The solution is easy: stop subsidizing driving. If all of the true costs of gasoline were included in its price, it would cost about $20/gallon. If we even taxed it at $2/gallon, I bet there would easily be enough money to fund all the transit we need and want.

Posted by Jeff Hoffman on May. 03, 2010 @ 11:42 pm

Jeff

There is no nation on the planet where gas costs $20 a gallon. Even in Scandinavia, which never saw a tax it didn't like, it runs out at no more than $10 a gallon.

But your idea is a nice way to kill the U.S. economy stome dead though. I'm sure you feel that is worth it, in order to spare a few fringe bus services that few use anyway, right?

Posted by Tom Foolery on May. 04, 2010 @ 8:02 am

Hoffman is correct, tax the cars, and than tax the business and institutions that rely on the systems we pay for. The problem currently is that Institutions like SFSU-CSU and the upcoming Parkmerced "Vision" project (May 6th 3:30pm hearing at SF Planning) negotiate the transit issues without "fair-share" impacts, or significant study of alternatives that would better serve the riders, and public in routing and linkages to regional transit. Its more important than ever to get transit projects, and NEW transit projects off the ground, prior to allowing development and private interests to incentivize there version of what is best to serve the city. Than we have privitization of the system which is not always in the communities and cities best interests.

Posted by Aaron Goodman on May. 04, 2010 @ 10:31 am

The death spiral is the exact problem here: You keep cutting service and raising fares (and laying off, for example, the people who clean the buses) and Muni becomes far less attractive an option, so fewer people ride, so less money comes in, so more cuts are needed, so service gets worse ... And honestly, the only way to break it at this point is to pump in more money.

The billion-dollar figure is for the entire Bay Area, a large and wealthy region. A modest increase in the gas tax (I'm with Jeff on the impacts, but I think $20 a gallon would hurt too many working-class people), a local version of the state vehicle-license fee that the guv killed, higher parking fees and taxes on development that actually equal the impacts these commercial and residential projects have on transit demand and San Francisco could come very close to making Muni work again. 

Posted by tim on May. 04, 2010 @ 10:45 am

Aaron

You forgot to mention that you'd like to raise taxes.

Because of course nothing matters but your socialist agenda that maybe 11 people in the entire nation support.

I'm curious why you don't move to somewhere such ideas are actually deemed plausible. Like maybe, I don't know, Cuba?

Posted by Tom Foolery on May. 04, 2010 @ 11:32 am

Consolidate all these ridiculous money wasting operations. Instead of two dozen boards of directors made up of Carol Midgen like hacks, one would be fine, we could concentrate the hackery to one board. Then set the routes so that people can get from one place in the bay area to another without going through hell.

Then have a campaign around about transit behavior, so that riding the bus isn't like taking a walk through Somalia or Albania.

Then set budget priorities, are we going to fund mass transit or are we going to hand out money to every little group that goes begging to Chris Daly, David Campos or some other bastion of the spoils system?

Posted by glen matlock on May. 04, 2010 @ 12:12 pm