Do metro fare hikes impact ridership?

Do you know that metro rail fare hikes are controversial across the world? In cities with large rail networks, where millions of people use the service, people are bound to resist hikes that burn a sizable hole in their pocket.

How the usage pattern of Delhi Metro changes over the next few months will show the impact of fare hike on the transport choices of people.

Consumer choices are “highly subjective and one person’s long commute may be another person’s chance to catch-up on Netflix,” points out DB Market Research in its report, ‘Mapping the World Prices’.

According to data from Delhi Metro, the number of commuters who accessed two metro stations close to the JLN stadium to watch the FIFA World Cup matches more than doubled in September – they did not find it pricey to shell out a wee bit extra to travel by metro to watch a match.

Many Delhi Metro commuters pay ₹20-30 as parking charges, or even more in the last mile connectivity.

That said, DMRC data also showed a drop in ridership in certain segments, indicating there could be pockets where people find the metro fare hikes sharp enough to limit their metro travel. While announcing the fare hike, DMRC also pointed out that when phase III gets completed, it will bring down the fares paid by commuters.

Some cities such as London have dropped fares. Delhi Metro is no exception – it had dropped fares of airport metro express to increase ridership.

Now, for the non-airport metro network, it has increased prices after a gap of seven years, but it has also widened the off-peak time window, and increased the discount rates to 20 per cent from the earlier 10 per cent. Also, when it was unable to increase fares despite the rise in fuel prices for many years, it resorted to increasing the minimum amount.

Moreover, the Fare Fixation Committee has recommended that from 2019 onwards, the annual fare hike should take care of inflation, but should not exceed seven per cent per annum.

Global scenario Different countries have different methodologies of fare hike. In Hong Kong, the fares of MTR (excluding the Airport Express) have increased under the fare adjustment mechanism annually since 2010, with a cumulative increase of 25.2 per cent until 2016. This was broadly in line with the consumer price index changes over the same period, according to a Hong Kong government report.

Transport for London (TfL) has frozen the maximum amount that commuters have to pay in a day across different modes – ranging from £6.6-28.6. The London Mayor has decided to cap the prices till 2020. In Singapore, a Public Transport Council decides the fare adjustment, after the transport operators seek a fare change based on the principle of balancing the twin objectives of “keeping our public transport fares affordable and ensuring long term viability”.

Taking into account household incomes, Singapore devises mechanisms to meet its principle of keeping fares affordable for lower-income households.

A fare review exercise is ongoing right now, where the fare adjustment quantum to be considered for this year’s exercise is -5.4 per cent, part of which is a carry forward from 2016.

In 2014, when the PTC increased fares, it decided to freeze fares for senior citizens and prices of existing travel concession passes, noting that the government will shield lower-wage workers and persons with disabilities from fare hikes.

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