Quote Originally Posted by professorscott View Post
You could do that, but it wouldn't get you very far, for two reasons:

1. Elasticity of demand - if you raise the fares, the number of trips will go down. Not by a huge amount - most people who ride DDOT are transit dependent - but it will go down.

2. Detroit only gets a small fraction of its revenue from the farebox, I think it is something like 16% of the total budget. So if you raise fares from, let's say, $1.50 to $2.00 which is a 33% increase, you only increase the top line by a little over 5%, which brings the system from being one of the most underfunded in the developed world, to still being one of the most underfunded in the developed world. And that 5% increase is based on the false assumption that my first point is incorrect; in reality it will be somewhat less than 5%.
Professor, your points are well taken. I'm aware that a 33% fare increase would only help DDOT's bottom line in a relatively small way. But I also don't think that ridership would be affected more than minimally. The bottom line is that DDOT's farebox recovery rate is nearly the lowest of all major US cities. For the most part, only very small cities, the kind that provide services like free on-call van rides to senior citizens, have lower rates. Detroiters have no reason not to contribute at the farebox like residents residing in peer cities. If we're asking for subsidies from other sources, especially federal and state sources, we should be paying what other folks pay. Even if it only modestly improves the budget numbers.