Lowering Transit Fares and Raising Revenue

Unlike the public transit systems of many other cities, Rochester, New York, recently lowered its fares -- and they've got a budget surplus to boot. But to maintain this economic rarity, service has been reduced.

"At a time when public transportation systems around the country are struggling with soaring fuel costs and pinched budgets, the bus system in Rochester has done something that few others would contemplate: This month, it lowered its single-ride fare.

Rochester's Regional Transit Service is no behemoth. It carries 15 million riders a year, as many as the New York City transit system carries in two days. But as economic hard times have reduced tax revenues and increased demand for government transit subsidies, its experiences may provide valuable lessons for larger cities that are planning fare increases, like New York, Minneapolis and Cleveland.

The Rochester system, which expects to run a surplus for the third year in a row, has been able to reduce its one-ride fare in part by eliminating some low-trafficked routes, avoiding debt and aggressively raising revenues from other sources. The fare fell to $1 from $1.25 on Sept. 1."



Next logical step

Now, to maximize your investment, take the user fee off entirely. Unit costs plummet and the wheels of commerce are better lubricated.


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