Metro doesnt understand economics

Monday, December 11, 2006

Metro Considers Increasing Rail Fares - washingtonpost.com

“Because of declining real estate values, we have holes to fill of our own, and now we’re being presented with holes in Metro,” said Kauffman, a member of Fairfax County’s Board of Supervisors. “It’s not like we have a stockpile of green putty to fill the gaps.”

Wonderful. I was just talking to my friend and host in NYC yesterday about how much nicer the subway is in New York than Metro is in DC, and how Metro is expensive here.

I love how they want to combat a slower-than-expected increase in Metro riders by a fare increase. It’s like the pay phones, facing greatly increased competition from cell phones, doubling the cost of a call in a few years. And what happened there? The pay phone has become nearly obsolete. Not that they had much chance of competing, so maybe it’s not a good analogy.

But it’s Econ 101 - the way to fix slow growth is not to raise the price. In fact, they might want to consider lowering rates. And the article mentions discounts for SmartTrip riders (SmartTrip is the permanent card that replaces the paper cards, if you ride Metro more than once every six months it’s worth the SmartTrip). I had no idea there were discounts for SmartTrips. Maybe they should try publicizing this. You can discount all you want, but if people don’t realize it’s cheaper, it doesn’t do you much good.

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