[sustran] Re: Jain Alok on DETERMINING MRT FARES

[Eric Bruun]

On Wed, 8 Dec 1999, Jain Alok wrote:

> Its quite difficult to define "fairness" and "equity". As soon as any fare
> is charged for any a transport system, it is not affordable to some. And
> then there are diktat's of the free market which are against any
> cross-subsidy. I think the fair system is where similar subsidy is provided
> to all the modes. 

  I disagree, the fair system removes subsidy from those who cause social
bads and uses any charges against them to compensate those who suffer
from these bads. "Subsidy" can often be viewed as a transfer from those
who get the most benefit from the system to those who don't, but help
to pay for it, either indirectly or directly. 

Also, it is very debatable whether "cross-subsidy" really exists in an
integrated network -- not every route serves only the people along the
route, many also serve through trips with high capacity modes. Also
where this capacity is put is somewhat arbitrary if there is more than
one right-of-way available, more than one type of solution, etc. This
is a concept that right-wing economists push who pay no attention to 
network effects. The high ridership loss in the UK after deregulation
was in large part due to eliminating or reducing service on these
so-called "cross-subsidized" routes. (At the same time, other profitable
routes have excess capacity.)  Eric
 
 	In developing world, there are a lot of subsidy provided
> to road based transport system (which eventually benefits car-users) by way
> of free-roads, subsidised fuel and by not recovering the indirect costs
> incurred.
> 
> The proponents of "user-pays" principle who try to justify the high fares of
> mass transit systems (but themselves travel on chauffer driven cars) never
> target road based system for the same principle. Road based systems are also
> disguised as means of basic mobility.
> 
> So much for "free-market economy".
> 
> Alok Jain
> -----Original Message-----
> From: Ramon Fernan III [mailto:heckler at quickweb.com.ph]
> Sent: December 8, 1999 3:40 PM
> To: sustran-discuss at jca.ax.apc.org
> Subject: [sustran] Re: DETERMINING MRT FARES
> 
> 
> Thanks to everyone who's contributed to this discussion. I guess one 
> of the principles we stand by in sustainable transport is that it 
> should be fair and equitable. I think that means both in terms of 
> giving access to the poor and making transport affordable to the 
> poor. If we were to directly address that issue, how should we go 
> about it in this case (of the EDSA MRT and of the Bangkok Skytrain as 
> well)? Would a fare that takes up half of a person's daily wages 
> be fair to that person and to society even if it is supposed to be 
> "fair" to the entity that put up that transport system? Also, aren't 
> the shopping malls being built in major stations compensation in 
> part to the investor and an incentive to keep fares down? The MRTC is 
> assured an income by the government and also gets income from the 
> mall development.
> 
> By the way, the first LRT in Manila, as I've said, is supposed to be 
> subsidized as claimed by the government. The (flat) fare is Php10 and 
> the subsidy per rider is Php60 (as claimed). The fare is slowly 
> being raised to Php15. It is almost always packed. The government 
> built it so it doesn't have to return a profit to an outside 
> investor, only to repay the loan with which it was built.
> 
> 
> Ramon Fernan III
>