With the cost of living on the rise and the revenue of transportation companies rapidly decreasing, it is not surprising that many are fearing that subway and bus fares are likely to go up next year. With the rising cost of commodities, wages, and fuel, many bus and subway companies are battling to keep their prices steady. Here, we will discuss why the fares could increase and the implications of such an increase.
Why Subway and Bus Fares Are Likely to Rise
Increased Labour Costs
One main factor behind the likely rise in subway and bus fares is the increase in wages. Higher minimum wage rates mean that bus and subway companies must pay their employees more, resulting in higher payroll costs. This also affects fuel costs, as increased wages mean increased transportation costs for employees.
Rising Fuel Prices
Fuel prices are one of the biggest variables in the transportation industry. With increased demand from passengers, buses and subway cars must continuously travel back and forth, leading to higher fuel costs. On the other hand, transit companies cannot pass those costs onto their customers as they would be classified as price gouging. This leads to them having to take the hit, while compensating with higher fares.
Ongoing Maintenance and Repairs
The maintenance and repair of buses and subway cars is an incredibly expensive process. Even with strict policies in place, buses and trains will break down and need repairing, often leading to higher maintenance costs. This became especially prevalent after the coronavirus pandemic, as many people stopped using public transportation leading to less frequent maintenance and repair costs and the need to spend more when they were needed.
Fee and Tax Changes
Along with wages and fuel, fees and taxes have been on the rise, further complicating transportation companies bottom lines. Transit companies must pay fees to the city and state, for instance, as well as other taxes and permits, many of which have continued to increase. As with wages and fuel, raising fares is often the only way for bus and subway companies to make up for these expenses.
Implications of a Fare Increase
With the rising cost of labour, fuel, taxes, and ongoing repairs, it is easy to see why many are anticipating a fare increase next year. While this might be seen as a necessary move to keep transit companies afloat, it will also have an effect on the people using public transportation.
Lower-Income Passengers
For passengers who rely on public transportation, a fare increase could wreak havoc on their finances. For those who are already struggling to make ends meet, it could be a major setback and make using public transportation a luxury they cannot afford.
Transportation Alternatives
For those who can’t afford to take the subway or the bus, they will be forced to find alternative means of transport. This could mean walking, biking, taking a taxi or ride-sharing services, all of which can be incredibly expensive for some passengers.
Impact on the Economy
A fare increase could also have a large effect on the economy as a whole. With passengers likely to rely more on alternative forms of transport, the total output from the transportation sector could be affected. This could lead to lower tax revenues, higher unemployment, and other economic repercussions.
It is evident from the evidence presented in this article that subway and bus fares could very likely rise in the coming year. With wages and fuel on the rise, fees and taxes increasing, and maintenance costs rising, many transportation companies are finding it difficult to stay profitable. This could have major implications for those who rely on public transportation as well as the economy as a whole. It is important to keep an eye on how fares might be affected in the future to ensure that everyone is able to get where they need to go without breaking the bank.
