Transit Prices Increase 50%

[Stunt]

Since I've started my career and live relatively far from home, I typically talk to my parents on the weekend; keeping each other's lives in the know.

My parents live in a small town of 9,000 people ~45mins away from Ottawa (fairly big city). My mom is an insurance broker in Ottawa and to save money she takes the bus to work instead of driving alone everyday. Which I 100% support, carpooling is a great way to save money, reduce traffic and smog.

Recently the bus she takes raised prices from $50 to $75 a week for round trip 5 days a week. My mom is somewhat stingy and has complained the company, she has pointed out that it is cutting into people's grocery bills and the like (kinda ironic given she makes ~$60k and my dad makes ~$120k). So now she has the transit authority involved, has created a committee to lobby municipal government to help subsidize the price increase.

I asked her the last time there was a price increase, and she said 4 years ago! 4 years?! In that time fuel costs have gone up 40%, inflation and labour costs have gone up at least 3% a year. If you consider the opportunity costs of insurance, gas, maintenance, over the same 4 year period, this increase is not unreasonable.

I hope my mom loses this battle, what are your thoughts on this?

 

[Aisengard]

I think you're a terrible son if you're rooting against your mother on something you don't really care about.

 

[Rainsford]

You're making the assumption that $50 was a reasonable price 4 years ago and that there is no benefit to subsidizing public transit. I don't know enough about costs in Canada to guess whether or not $50 was a reasonable price in 2002, but you might want to look into that before hoping your mom loses the battle.

But as for the other point, I think you are way off base. Looking at things from a strictly present point of view, subsidies don't make too much sense except to help people who can't afford public transit to be able to make use of it (something I imagine you as a "free marketer" are dead set against). But in the longer term, subsidizing the costs of public transit is an EXCELLENT way to encourage use and eventually drop costs. As I'm sure you know, a lot of the costs of public transit are fixed, so low usage means a lot of lost money and higher prices. But since the variable costs are lower, if ridership of public transit gets high enough, the system will eventually be able to pay for itself with the new lower costs WITHOUT subsidies. While eventually the free market should pushing things that way as well, this would be a great way to jumpstart the process.

 

[dmcowen674]

Originally posted by: Stunt

I hope my mom loses this battle, what are your thoughts on this?

What people want to ride the bus and eat???

What's the matter with them?

 

[Stunt]

Originally posted by: Aisengard
I think you're a terrible son if you're rooting against your mother on something you don't really care about.

Yeah...my parents are going to go hungry :roll:

 

[Rainsford]

Also, to be a bit more accurate, the thread title should be "Transit Prices Increase 50%". Prices do not always reflect true costs, this isn't the perfect word of an economics classroom.

 

[Stunt]

To put costs in perspective...
In a Pontiac Grand Prix (standard car) it takes 10L/100km. The drive is 70-80km or ~150km round trip.

This equals 15L a day in gas, times 5 days a week and times $0.85/L...

That's $64 a week in gas. That puts the price in perspective for those who cannot.

Also, remember this is a small town and they aren't filling the bus; you don't get typical volumes mass transit would get.

 

[dmcowen674]

Originally posted by: Stunt
To put costs in perspective...
In a Pontiac Grand Prix (standard car) it takes 10L/100km. The drive is 70-80km or ~150km round trip.

This equals 15L a day in gas, times 5 days a week and times $0.85/L...

That's $64 a week in gas. That puts the price in perspective for those who cannot.

Also, remember this is a small town and they aren't filling the bus; you don't get typical volumes mass transit would get.

That puts it an even bigger burden on those that need it the most.

If they can't run it without high prices then they should shut it down altogether.

 

[Horus]

75 bucks a week is too much. Even a round-trip ticket to Toronto from where I am in Burlington (About 70KM, 45 minute drive) it's 11 bucks on GO Transit.

 

[NTB]

my thoughts: $75 a week? lol In St. Louis, had I gotten one of the jobs I interviewed for, I could have taken the bus to and from work for $50 a month. So I agree - those prices are rediculous.

Nathan

 

[Craig234]

I don't have a clear opinion, in part for a lack of facts on the costs of the service - but even if I had those, there are difference answers you can choose depending how many costs you want to take into account.

For example, is the government building roads for large numbers cars and dealing with smog a 'subsidy' for the auto industry, but not called that?

If you weigh a lot of factors in the cost to society of cars versus busses and such, who knows how the math works out.


Yet another factor is that the busses are a basic part of the infrastructure for people to be productive. You have to consider the benefits there as well.

In general, I'd have little problem with subsidies for busses to get the benefits and let the poorer people afford them better, but the answer could come out different ways depending how you view these many issues.

However, I do agree with you that your mother sounds off-base in whining about not being able to afford the cost as the reason.

 

[Stunt]

Originally posted by: Horus
75 bucks a week is too much. Even a round-trip ticket to Toronto from where I am in Burlington (About 70KM, 45 minute drive) it's 11 bucks on GO Transit.

GO Transit is a mass transit system; notice how many people are travelling with you.

This is similar to a greyhound bus as it's for rural customers.
Ever take a look at costs to fly to rural areas vs. same distance on more common routes? It's called economies of scale.

Even with Toronto mass transit you are looking at $55 a week. Tell me what a reasonable price is for this service. Dave has already said it's not a viable business.

 

[Stunt]

Originally posted by: dmcowen674

Originally posted by: Stunt
To put costs in perspective...
In a Pontiac Grand Prix (standard car) it takes 10L/100km. The drive is 70-80km or ~150km round trip.

This equals 15L a day in gas, times 5 days a week and times $0.85/L...

That's $64 a week in gas. That puts the price in perspective for those who cannot.

Also, remember this is a small town and they aren't filling the bus; you don't get typical volumes mass transit would get.

That puts it an even bigger burden on those that need it the most.

If they can't run it without high prices then they should shut it down altogether.

So you are saying offer super cheap prices or don't run it at all?
Obviously there's a market at $75, why would the company shut down. You think people DON'T want to pay those prices?

 

[dmcowen674]

Originally posted by: Stunt

Originally posted by: dmcowen674

Originally posted by: Stunt
To put costs in perspective...
In a Pontiac Grand Prix (standard car) it takes 10L/100km. The drive is 70-80km or ~150km round trip.

This equals 15L a day in gas, times 5 days a week and times $0.85/L...

That's $64 a week in gas. That puts the price in perspective for those who cannot.

Also, remember this is a small town and they aren't filling the bus; you don't get typical volumes mass transit would get.

That puts it an even bigger burden on those that need it the most.

If they can't run it without high prices then they should shut it down altogether.

So you are saying offer super cheap prices or don't run it at all?
Obviously there's a market at $75, why would the company shut down. You think people DON'T want to pay those prices?

You've heard the consensus, shut it down, it's an obvious scam anyway.

 

[Stunt]

Originally posted by: dmcowen674

Originally posted by: Stunt

Originally posted by: dmcowen674

Originally posted by: Stunt
To put costs in perspective...
In a Pontiac Grand Prix (standard car) it takes 10L/100km. The drive is 70-80km or ~150km round trip.

This equals 15L a day in gas, times 5 days a week and times $0.85/L...

That's $64 a week in gas. That puts the price in perspective for those who cannot.

Also, remember this is a small town and they aren't filling the bus; you don't get typical volumes mass transit would get.

That puts it an even bigger burden on those that need it the most.

If they can't run it without high prices then they should shut it down altogether.

So you are saying offer super cheap prices or don't run it at all?
Obviously there's a market at $75, why would the company shut down. You think people DON'T want to pay those prices?

You've heard the consensus, shut it down, it's an obvious scam anyway.

What?
If people are willing to pay a fee for a service, that's their choice. If they refuse to take the bus, the company will go out of business. There is no scam, besides if a similar service could be offered for cheaper...a competitor would start up to take advantage of the unfair price.

 

[alent1234]

$75 a week is crazy

NYC for $76 a month i get unlimited subway and bus rides. Express buses are $120 a month. If you live in the suburbs, the commuter railroad is $200 - $350 per month depending on where you live

 

[Stunt]

Originally posted by: alent1234
$75 a week is crazy

NYC for $76 a month i get unlimited subway and bus rides. Express buses are $120 a month. If you live in the suburbs, the commuter railroad is $200 - $350 per month depending on where you live

Again, you are not considering mass transit vs. rural transit.

 

[BoberFett]

$75 a week is pretty damn expensive. I think that's about the price of a one month pass here in Minneapolis.

 

[ntdz]

I hope she loses too.

 

[dmcowen674]

Originally posted by: Stunt

Originally posted by: alent1234
$75 a week is crazy

NYC for $76 a month i get unlimited subway and bus rides. Express buses are $120 a month. If you live in the suburbs, the commuter railroad is $200 - $350 per month depending on where you live

Again, you are not considering mass transit vs. rural transit.

Wow, thanks for showing how out of control the Government scamming is up there in canada.

Please keep that crap to yourselves. Thank you.

 

[Stunt]

Originally posted by: dmcowen674

Originally posted by: Stunt

Originally posted by: alent1234
$75 a week is crazy

NYC for $76 a month i get unlimited subway and bus rides. Express buses are $120 a month. If you live in the suburbs, the commuter railroad is $200 - $350 per month depending on where you live

Again, you are not considering mass transit vs. rural transit.

Wow, thanks for showing how out of control the Government scamming is up there in canada.

Please keep that crap to yourselves. Thank you.

What's your problem now?

 

[ntdz]

Originally posted by: Stunt

Originally posted by: dmcowen674

Originally posted by: Stunt

Originally posted by: alent1234
$75 a week is crazy

NYC for $76 a month i get unlimited subway and bus rides. Express buses are $120 a month. If you live in the suburbs, the commuter railroad is $200 - $350 per month depending on where you live

Again, you are not considering mass transit vs. rural transit.

Wow, thanks for showing how out of control the Government scamming is up there in canada.

Please keep that crap to yourselves. Thank you.

What's your problem now?

He's distressed about the economic disaster we've been experiencing for the last few years.

 

[dmcowen674]

Originally posted by: ntdz

Originally posted by: Stunt

Originally posted by: dmcowen674

Originally posted by: Stunt

Originally posted by: alent1234
$75 a week is crazy

NYC for $76 a month i get unlimited subway and bus rides. Express buses are $120 a month. If you live in the suburbs, the commuter railroad is $200 - $350 per month depending on where you live

Again, you are not considering mass transit vs. rural transit.

Wow, thanks for showing how out of control the Government scamming is up there in canada.

Please keep that crap to yourselves. Thank you.

What's your problem now?

He's distressed about the economic disaster we've been experiencing for the last few years.

Now you admit it

 

[sandorski]

$5/day vs $7.50/day. That's what it boils down to. Sure, it's a hefty increase, but as Stunt points out, it's pretty much in line with fuel Cost increases. Not only that, but try to fuel a personal vehicle and Park it for less, it'll easily cost twice that amount unless you buy a Motorcycle. I agree with Stunt, his Mom is wrong on this.

That said, you just know that if the cost of fuell plummets that the fee won't follow suit.

 

[RichardE]

Originally posted by: Stunt
Since I've started my career and live relatively far from home, I typically talk to my parents on the weekend; keeping each other's lives in the know.

My parents live in a small town of 9,000 people ~45mins away from Ottawa (fairly big city). My mom is an insurance broker in Ottawa and to save money she takes the bus to work instead of driving alone everyday. Which I 100% support, carpooling is a great way to save money, reduce traffic and smog.

Recently the bus she takes raised prices from $50 to $75 a week for round trip 5 days a week. My mom is somewhat stingy and has complained the company, she has pointed out that it is cutting into people's grocery bills and the like (kinda ironic given she makes ~$60k and my dad makes ~$120k). So now she has the transit authority involved, has created a committee to lobby municipal government to help subsidize the price increase.

I asked her the last time there was a price increase, and she said 4 years ago! 4 years?! In that time fuel costs have gone up 40%, inflation and labour costs have gone up at least 3% a year. If you consider the opportunity costs of insurance, gas, maintenance, over the same 4 year period, this increase is not unreasonable.

I hope my mom loses this battle, what are your thoughts on this?

Canadian bus companies get subsidize already. You were around Toronto enough, you should know this. A 25$ increase for the bus is huge. People who are in the income bracket your parents are in typically do not take the bus. The people who typically do take the bus are students and people on or below the poverty line. Students get there passes for free from most universities. People on the poverty line will be hurt immensely, as that is 200$ a month extra. People on welfar get there bus passes as a condition of Ontario works. So in the end, you will end up paying for the increase, either through higher taxes, or through your kids tuition if they go to that school.

So as someone who complains about taxes already, you should hope your mom wins, as you will subsidize any increase in bus prices when Ontario works suddenly has to pay 200$ more to every person on welfare a month for there bus pass in that region.