The High Cost of Cheap Bus Fares

By Frank Gruber

Recently an uncle of mine visited from Texas. Since his flight did not arrive at any of the few remaining hours of any given week that I will consider driving to LAX to pick up a visitor, he had to get to Santa Monica on his own.

My uncle is a retired lawyer with a healthy portfolio of investments. You might think he would take a cab. But my uncle is also about to turn 80, which means that he grew up when people didn't willy nilly throw $30 away on taxis.

I told him how to take the Big Blue Bus's Rapid 3 from Lot C.

When my uncle boarded the bus, he asked how much the fare was. Twenty-five cents, the driver told him -- the senior citizen fare. An amusing thing happened. My uncle had a quarter, but another senior citizen insisted on paying for him with her magnetic fare card. I'm figuring that she knew by his Texas drawl that he was a tourist, and in a manner that typifies the best of Southern California hospitality, she wanted to treat him to the bus fare.

Or maybe she was flirting with him. In any case the fare was so cheap she could afford to be generous.

Which brings me to the point of this column. It's great to encourage generosity, but it's absurd to charge my uncle only 25 cents to take a bus from LAX to Santa Monica.

For that matter, when I, not yet a senior, take the Big Blue Bus, it's ridiculous to charge me only 75 cents. Or to charge me only $1.25 when I take, as I often do, the Wilshire Boulevard Metro Rapid to Westwood or to Beverly Hills, or only $1.75 when I take the BBB 10 Express to downtown L.A.

These prices are ridiculous, because both my uncle and I and most other potential customers for the bus can afford to pay more, and the service is worth more than the price. More to the point, we would willingly pay more, as would many others, if we got more for our money -- i.e., if the service were better.

Transit fares are in the news lately. The Santa Monica Big Blue Bus is considering raising some special fares and adding a transfer charge. (see story) Now that the Metropolitan Transportation Authority (Metro) is free from the restrictions of the Bus Riders Union consent decree, Metro is proposing to raise its fares substantially. (see story)

Not surprisingly, low-income people and students who rely on public transportation and their representatives have protested. It's a bitter pill to swallow, obviously, for a poor person to see the cost of an essential like transportation double or triple or even, in the case of Metro's bus passes for seniors, quintuple (as might happen).

But just as the hidden (or not so hidden) cost of giving away free access to roads is traffic congestion, the cost of cheap bus fares is poor service, which is not only the bane of the impoverished, but also the barrier to increasing transit use by the affluent. It's noteworthy, and unfortunate, that neither the BBB nor Metro expects to improve service with the revenues from these higher fares; the purpose of the increases is to maintain current service levels or stave off cuts.

Historical digression. One of the better books I have read about cities is Tunneling to the Future: the Story of the Great Subway Expansion that Saved New York, by Peter Derrick. The book tells the story of the decade-long struggle in the early years of the 20th century to plan and finance the expansion of the New York subway and elevated system out into the Bronx, Queens and Brooklyn.

It was a huge undertaking. In today's dollars, the capital costs were about $22 billion, raised in a public-private partnership. The expansion was a huge success, especially in its major purpose, which was to disperse the working poor of New York out from the slums of the Lower East Side (500,000 people in two square miles) and into solid working and middle-class neighborhoods.

There was one miscalculation, however. In response to populist agitation (led, oddly, by William Randolph Hearst), the nickel fare was written into the financing documents as sacred. At the time, a century ago, no one foresaw this as a problem because -- get this -- there hadn't been inflation for decades.

But then came World War I, which caused worldwide inflation. By the time the system was operating, in the 20s and 30s, and notwithstanding that the system achieved its expectations for ridership, the nickel fare was not sufficient to pay for operating costs, debt service, and maintenance.

You can guess what was shortchanged -- maintenance. The nickel fare was not increased until the late 40s. By then the system was in decline. Even as fares increased over the years, always playing catch up to costs, the pattern could not be reversed. Fares and subsidies kept up with operating costs, but not maintenance and the need for reinvestment.

What was intended to be a public transportation system for everyone -- with beautiful stations and excellent service -- became a system primarily for the poor, and one that increasingly failed them.

Welfare on wheels.

Fortunately New York began reinvesting heavily in the system again in the 80s and the subway has revived some of its allure. Service is better and ridership is up among all economic classes.

Back to my uncle on the Rapid 3. Santa Monica has the lowest transit fares in the region, which is consistent with our progressive politics. Aren't we virtuous for charging a senior citizen only a quarter, or a "regular" passenger 75 cents, for what would be a $30 cab ride?

Cheap fares may be part of a generous social system, but they make for a bad transportation system.
The system is not necessarily bad because the bus takes longer than driving, or, to use the LAX example, longer than a cab. Buses do take longer, but riders expect that, and in fact it doesn't take as much longer as people think. I've made the trip, door in Ocean Park to terminal, in 35 minutes, including the shuttle from Lot C, which is only 10-15 minutes longer than a cab.

No, it's a bad transportation system because those Rapid 3 buses only run every fifteen minutes. Who, with the alternative of driving, wants to risk waiting that long for a bus? Personally, I'd pay -- let's say -- three dollars if the Rapid 3 ran every five minutes. The Metro Rapids on Wilshire run that frequently and I take them whenever I have the chance -- instead of driving.

I'd pay even more -- do I hear five dollars? -- for buses that cut through traffic congestion on bus only lanes. I'd even pay a little more if every bus stop had a nice shelter that made me feel like a customer rather than a piece of meat.

Who knows what I'd be willing pay to ride a subway, but you can get an idea of that by looking at what commuters are willing to pay to ride MetroLink. In the L.A. region public transportation has been designed, built and operated not to move as many people around as quickly and efficiently and as happily as possible, but instead to provide transportation of last resort for poor people. The result is that we have a system that is overwhelmed by private car traffic, and at the same time provides desultory service to the poor.

We have a lot of poor people, and they need transportation. But the solution to that problem is not to starve the transit system to throw the poor some crumbs. The solution is to provide an excellent system, charge whatever you can get from riders who can pay, and then aim your farebox subsidies, which should come from social service budgets, not from transit, directly at those who need them -- not at affluent people like me and my uncle.

This is common practice in Europe, where fares are high; in Berlin recently I struck up a conversation with a U-Bahn rider who told me that because he was unemployed, he had a free pass. It shouldn't be that difficult to sell discounted passes to low-income people.

Metro and the Big Blue Bus -- and the governments that support them -- should take a page from American higher education. The top colleges and universities charge high tuitions, but then give aid to those students who need it.

But investment bankers, lawyers and doctors, who don't qualify for financial aid, are falling over themselves for the privilege of forking over $40,000 a year for their kids' educations. They're willing to pay for excellence.

We should look at transit the same way. Of course, there is still going to be subsidy of transit even if the fare is $3, just as even $40,000 tuition is subsidized: the typical cost to the college or university is about $70,000 per student per year.

But if we make the system excellent, people who can afford higher fares will get out of their cars and use it -- helping to solve other problems along the way. Then when we subsidize the fares of poor people, they will have a system worth using, not a system they want to graduate from as soon as they can buy a car.