Wednesday, 19 September 2012

The Economics of Public Transport

Last Sunday my relatives invited me to a party at their place to celebrate the birthday of one of my Aunts and the life of her friend Caroline John (Who played Elizabeth Shaw in Doctor Who. That's rather awesome in my opinion). I only had to show up at Feltham train station before noon and everything else would be shorted out. Easy enough. I would wake up around 9:00, plan a route and leave by 11:00. Jet lag had other plans for me.

The U.K. is five hours ahead of the U.S.A. and for the first couple of days my body was telling me that bed time was around 4:00 in the morning. I got out of bed at 6:00 ... at least is was 6:00 in the United States. It was 11:00 in Great Britain. I'd never make it in time, but I wasn't going to pass up the opportunity for Bollinger Champagne and Doctor Who. Nevertheless, I now only had a few minutes to figure out how to get to Waterloo Station and then find the train to Staines before it was too late. A tall order considering the fact I only moved in the day before.

I figured out a route involving a walk through London's labyrinth of streets, a bus (which I missed) and 12:30 train (which I also missed). I got lost for about five minutes and then found my way using a map at a city bicycle stop (Like DC's bike scheme but bigger, better, and with Barclay's written on all of the bikes). Though I missed my first bus and train, this only delayed me for twelve minutes. The trip itself proved surprisingly straightforward with the buses and trains following a pretty tight schedule. I guess the dark days of British Rail my parents endured are over. I arrived, rather late, but still managed to drink my arm's weight in champagne and whiskey. Only two things frustrated me about the journey itself. 1) I had been in such a rush that I brought nothing to read with me, making the journey a bit boring and 2) the cost. Still, at least the gives an economics major something to blog about.

Public transport normally will not be profitable even though a lot of people need it. But budget deficits and high debt make that increasingly unsustainable in a lot of the world. So how do city majors and governments increase the profitability of public transport systems without penalising residents too severely. The solution that many cities are adopting involves special fare cards like the DC Smartrip or the London Oyster card. By raising the price of fares paid in cash and keeping card prices down, city councils can milk tourists and other nonresidents for all their worth whilst keeping the transport system relatively inexpensive for those who need to use it most.

My bus and train tickets cost £2.30 ($3.73) and £9.30 ($15.07) respectively using cash. With an oyster card, the prices would only have amounted to £1.35 (2.19) and £5.50 ($8.91) at most. Another nice feature is that you can only be charged up to £4.20 (6.80) in a single day for taking the buses so any more than three bus rides with an oyster cost less then paying with cash. This works by charging an initial fee for a card to discourage tourists who may not make their money back (or think they won't). The result is a much less unprofitable business, so that the taxpayer doesn't have to subsidies it by paying more tax.

So all I have to do now is buy an oyster card and walk a lot more than I had hoped to.

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