Here’s the news release from Metrolink:
LOS ANGELES – After skipping a fare increase last year, the Metrolink Board of Directors approved a seven percent average systemwide fare increase to go into effect on or after July 1, 2012. Funds generated from the increase will be used exclusively to help close a $13 million funding gap for the fiscal year 2012-13 budget.
“This is a last resort to be able to continue to offer the safe transportation options the region needs without cutting service. We’ve streamlined our operations and continue to keep the majority of our costs and headcount flat, despite a nine percent increase in ridership,” said Metrolink Board Chairman Richard Katz. “Last year, we were able to delay an increase to passenger fares and member agency subsidies while increasing train service by 14 percent. This year, despite continued efficient management practices, our costs have increased in large part because of an increase in our operations contracts due to a sweeping nationwide labor negotiation settlement and a 56 percent increase in fuel costs over the past two years.”
Of the $13 million funding gap, the fare increase will only generate $4.5 million dollars. Increased subsidy from Metrolink’s five member agencies will cover the remainder of the funding gap.
Specific cost increases include:
•$4.2 million increase in major contractor costs including but not limited to the rise in Amtrak’s contract to reflect their nationwide labor settlement
•$4 million increase in fuel costs (in the past two years, Metrolink’s fuel costs have increased by 56 percent)
•$1.3 million in connecting transit transfer costs for Metrolink riders
•$2.5 million for post-employment benefits, which weren’t previously budgeted for. (This is not a new cost or an increase in benefits. It’s being included in the budget for the first time this year.)
This proposed fare increase is independent from the 2004 Board adopted policy to restructure fares from zone-based to mileage-based fares over a 10-year period. The phased restructuring is not meant to generate additional revenue for Metrolink, but was implemented to ensure a fair and equitable fare policy. When combined with the 7 percent increase, the Metrolink Monthly Pass will cost approximately $20.00 more beginning on or after July 1, 2012. However, the impact of the fare increase varies depending on the type of ticket, distance traveled and where the trip begins and ends.
As a recipient of Federal Transit Administration (FTA) funding, Metrolink is required to comply with Title VI of the Civil Rights Act of 1964 and to carry out the United States Department of Transportation’s Title VI regulations, in addition to federal and state law that requires a public hearing before fares can be modified. Public comments and suggestions on the proposed fare increase and Title VI Service Delivery Policy were collected beginning April 27, 2012. Metrolink conducted additional public meetings across its five-county service area to allow the public to weigh-in on the board’s pending action. Approximately 159 individuals – about .7 percent of Metrolink’s daily riders – submitted comments regarding the fare increase. Seventeen individuals provided comments on the service delivery policy.
ABOUT METROLINK (www.metrolinktrains.com)
Metrolink is Southern California’s regional commuter rail service in its 19th year of operation. The Southern California Regional Rail Authority (SCRRA), a joint powers authority made up of an 11-member board representing the transportation commissions of Los Angeles, Orange, Riverside, San Bernardino and Ventura counties, governs the service. Metrolink operates over seven routes through a six-county, 512 route-mile network. Metrolink is the third largest commuter rail agency in the United States based on directional route miles and the seventh largest based on annual ridership.
They should lower the fare to attract new customers instead of asking a handout. It is their problem not to do things right at the first place.
No fare hikes,
It’s obviously a very complicated issue that touches on geography, economics and politics, but the very short story is that as long as it remains incredibly cheap to drive in America (by international comparison), it will be difficult for public transit to turn an operating profit. Virtually no transit agency in the U.S. does.
So the way that has largely been addressed in America is to supplement fare revenues with funds from taxes and other sources. Thanks to the bad economy, a lot of those revenue sources based on taxes are taking a hit too, but Metrolink can only spend what money it has in hand to run the trains. No one likes a fare increase, but I think L.A. has actually done a pretty good job at fending off some of the more drastic fare increases that other agencies in the U.S. have proposed or implemented.
Hope that provides some helpful context. Japan certainly has a lot to each American about how to run transit, but the dramatic differences with respect to economics, geography, etc., will mean that many comparisons will be apples-to-oranges — that is, not always applicable.
Carter Rubin
Contributor, The Source
I’d say easily 1/3 of the people riding the trains don’t pay at all. It’s easily a larger group than that. If you simply enforce EVERY rider paying there’d probably be no need for a fare increase. I hear all of the time: I can’t afford to ride the bus, lets meet somewhere the train stops.. ie: I’m going to ride for free. While I don’t do that myself, it’s frustrating to me as a paying rider to see my fares increase to pay for those who ride for free. Why not make the turnstyles official? Make ‘em only turn for people who tap? Make the paper cards actually swipe?
Well, the problem will self correct itself since there are many alternatives to Metrolink – including the new Orange Line Extension, which will be faster for many Metrolink riders going to work in the Wilshire Center and Financial District areas instead of dealing with the crowds at Union Station and having to wait 20 minutes for a train, versus a bus every 8 minutes during rush hour. You have the LADOT, Foothill, OCTA, and Santa Clarita commuter buses which did not experience a fare increase, plus vanpools and carpools, and new travel options like the Express Lanes that will reduce the travel time of people coming from the San Gabriel Valley. For intercounty commuters, you have carpools and vanpools.
Metrolink has a reliable time frame, but often from some of these outlying areas, especially in the morning, taking the bus can be faster. If you read the report they are saying that ridership will only dip slightly as a result of the fare increase. The Metrolink Board will end up reconsidering their ways if ridership plummets by double digits.
“Is there a reason why these three operators that Frank M gave as an example are able to keep fares stabilized for so long and still make profit? Why can we not replicate that here?”
Asian transit operators were given essentially carte blanche in developing the areas next to their stations, the thought being that if transit was going to bring development, then the transit provider should profit from that development (or even build/manage it and collect all profits). Of course the (usually very dense and large) development also adds more riders.
This is completely alien to the American transit experience. American transit systems pre-suburban flight made profits on their own, and thus operators did not pursue development around their stations (i.e. New York or Chicago), letting other develop the land. Modern American transit systems (i.e. Washington) built from the 1970s on were not given the same development rights as the Asian systems (like Hong Kong’s) that being built at the same time, and lost out on the massive development the new systems created. In essence we like to build our transit systems to enable private profits instead of using nearby development to subsidize the transit. Sometimes transit systems are even forced by politicians to give up their assets to other developers at below market rates, as New York’s MTA was forced to do to allow the creation of Brooklyn’s new arena over one of it’s yards.
The best parallel to the Asian experience was probably the New York Central Railroad, which once had a huge, open-air train yard and terminal that also happened to occupy some prime real estate: midtown Manhattan from 42nd Street and 59th Street between Lexington and Madison Avenues. The creation of Grand Central Terminal buried the yard and station and allowed the railroad to use and develop the newly free land, which is now the among the priciest real estate in the world, and created what we now know as Park Avenue.
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Despite the typecast, driving in Japan isn’t necessarily that expensive to drive. If you just look at Tokyo that maybe true, but once you get out of that 30 million plus population metropolis, everything else is quite comparable to the US.
Gas prices in Japan are comparable to those in Canada when considering the more accepted 1 USD = 100 JPY exchange rate, which is quite amazing considering that Japan has no natural resources. Public parking fees outside the Tokyo metropolitan areas are around $4-5 day which is on par with most cities in the US.
Japan’s expressways are ETC toll lanes similar to what LA is implementing and what is the norm on the East Coast. But revenues from these rarely even go into mass transit funding, they are put back into maintaining their expressway systems and other road and bridge projects.
After all, Japan is a major exporter of cars, they can’t make driving that much expensive. The more rural areas of Japan has a need to travel by cars as much as the US does. They may have stricter vehicle registration and taxes, but the introduction and popularity of Kei cars which exempts or reduces such fees and taxes still make car driving affordable in Japan.
The more rational reason why Japan has better mass transit is:
1. Competition.
Japan allowed private transit operators to compete with government transportation agencies. After all, Japan is a capitalist nation just like the US; free enterprise is encouraged.
Go anywhere in Japan, most transportation companies are private companies that aren’t run with taxes and run purely for profit. They buy their own buses, they lay their own tracks, they buy their own trains, they invest in the properties they own to build rail stations, and they are run for profit to pay for transit improvements, labor and overhead costs. Very little, if any, taxes are put into to operations of transit in Japan as majority of them are private enterprise.
2. Privatization.
The old Japan National Railways was notorious for its inefficiencies, bad debts, and high fares when it was government owned. Sounds a lot like Metro today, huh?
It became so bad by the end of 1987 just before privatization to baby JRs, they were spending 140 yen and receiving 100 yen per passenger, a 40 yen deficit and had amassed a debt of over $280 billion yen. It became so bad that the government of Japan decided to privatize the national rail system into multiple private companies, or baby JRs (much like the breakup of AT&T to baby Bells). Private transit companies were in much better shape, offered better service and were much more efficient than the JNR.
After privatization, JR was able to restructure their organization completely. They issued stocks, they greatly invested in better technology to efficiently manage their operations, they capitalized on their existing investments, and by 1997 they were able to repay back all the bad debt and operate at a profit.
It’s also worthy to note that most private transportation operators in Asia are big name retailers and department stores.
Essentially, it’s like Wal-Mart Railways, Costo Bus Company, or Target Transit Corporation. They need customers to come to their stores, so they build railways and bus lines that direct the people into their stores. Of course those ideas are only possible if private transit is legalized, but Asian governments encouraged that to promote economic growth. Since they already own the properties near their stores, they can also start building their properties with leased office spaces and retail spaces.
If that were to happen to in the US, is the time when Wal-mart, Costco, and Target realize they’re not seeing more people driving to their stores due to high gas prices. When that happens and when private mass transit gets legalized, you will get something like Asia.
Wal-Mart, Costco, and Target owns the parking lot to their stores; if private transit gets legalized they can easily convert them to a big rail or bus transit center and develop the excess parking lot spaces to leased office spaces and retail spaces. But legalization of private transit and end to government monopoly of transit has to happen first to get this ball rolling.
Carter,
“Japan certainly has a lot to [t]each American about how to run transit”
I agree. Has Metro looked to sending their best and brightest for a study abroad program to Japan to learn from their mass transit agencies on how they run their operations? Many countries send their best and brightest to learn in the US. Clearly we need to do the other way around for public transit in America.
“will mean that many comparisons will be apples-to-oranges — that is, not always applicable.”
The way things are going with public transit in America, they are rotting apples. If it’s comparing rotting apples to fresh oranges, I’d gladly take the fresh oranges.
If the cost of driving in Japan is not much different from Canada which is only slightly higher than the US, how can they be so successful with transit as well? There has to be more to this. What makes them so better and what can we learn from them?
We shouldn’t be learning from other rotting apples. We should rather, dump the rotting apples and start planting fresh oranges.
I love Japanese railways and I would love to see some of that railway technology brought to California.
However, it’s worth pointing out that JNR built Shinkansen (bullet train) lines from Sendai to Fukuoka while it was still nationalized. Plus quite a few electric commuter train lines. The “baby JRs” stand on the shoulders of giants, at least as far as construction is concerned.
Also, “Target Transit” isn’t quite accurate; Seibu and Kintetsu also own hotels to go along with the railways (including the Miyako Hotel in Los Angeles).