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Wednesday, October 20, 2010

Ending 25 Cent Fee for Muni Tickets Costs $2.13 Million Yearly

Inside A Temporary Clipper Pass

Since Friday, October 1st, the SFMTA stopped asking Muni metro patrons to pay a 25 cent surcharge per limited use ticket (LUT) issued by the new metro ticketing machines. This was a bright spot to many people as they complained the 25 cent fee was not fair, but I also argued the plastic Clipper cards issued by the same machines are given out with NO surcharge. To make it even sweeter, I reported the plastic Clipper cards will now be free until June 2011.

But have you ever thought, by Muni waiving the 25 cent fee to offset the re-loadable and reusable paper LUTs, the agency is falling into a deeper financial pit of financial doom?

In item #12 of yesterday's SFMTA Board of Directors meeting, the item is a request to continue the practice to waive the surcharges charged to the customers for the paper LUTs. There's some interesting facts which was discovered in the paperwork:
  1. It was originally conceived that the surcharge would be 25 cents and be raised to 50 cents starting with the 2012 fiscal year.
  2. Each card the SFMTA purchased was originally 35 cents each, however the cost to the agency for each card has dropped to 33 cents.
  3. The revenue generated by forcing passengers to pay the surcharge would be about $1.4 million for charging 25 cents, and $2.8 million by charging 50 cents.
The worst part: If the SFMTA continues the policy to not charge a fee for each LUT issued and if their request to get reimbursed is denied by the Metropolitan Transportation Commission, the agency will have to spend approximately $2.13 million a year on the paper RFID cards.

I'd hate to be devil's advocate, but while the locals are celebrating the waiver of the fee and Muni will go into financial turmoil, why in the hell would people pay a 25 cent surcharge every 90 days for a brand new LUT when Clipper cards are totally free and have much less restrictive policies than the LUTs? Muni could save tons of money if people refused to buy LUTs and just obtained a Clipper card because each card costs $2.11 and comes out of the MTC's budget, not SFMTA/Muni's. Also, by owning a Clipper card for at least 2 years and 3 months, you made up the $2.11 value of the card versus paying a 25 cent surcharge to Muni every 90 days/3 months.

Lastly, here's some fun math to demonstrate how much wasted paper is needed for the vending machines to sell LUTs:
  • Question: If it costs $2.13 million to supply the cards on a yearly basis, and they cost $0.33 each, how many cards does Muni buy per year?
  • Answer: 6,454,545 (or just 6.5 million) cards are issued per year. What a waste of paper!


Anonymous said...

I get what you're saying, but why couldn't Muni just use the same technology as BART as far as the tickets? Wouldn't it have been cheaper and a bit more fair to short-term visitors, not to mention those who don't rely on Muni often enough to justify getting a pass? It would've been easy to do and I don't get why we (Muni riders) were asked to subsidize Muni's lack of foresight in the first place.

Akit said...

You mean magnetic stripe tickets BART uses?

That can't happen for Muni because buses are not equipped to read magnetic stripes. Since they already have Clipper readers, the economical solution was to issue temporary Clipper cards.