Abstract:
The Metropolitan Transportation Authority must decide whether to offer new fare options to the five million riders who use New York City's subway and bus system each day. The subway had operated with a "one-ride, one-price, any time of day" pricing structure since it opened in 1904. With a new electronic fare collection system that was being installed, the MTA could offer innovative fare options including monthly passes, off-peak discounts, and free subway-to-bus transfers. A computer model (Microsoft Excel format) allows students to assess the ridership and revenue impacts of each fare option. The model also projects how the benefits of each new fare structure would be distributed across the city's varied racial, ethnic, and income groups. The case encourages students to suggest financing arrangements and consider the policy implications of transit pricing and government subsidies. The US Department of Transportation through the New England University Transportation Center provided financial support for this case. A 16.21-minute video accompanies the case.
