Tuesday, November 13, 2007

Economic principles

Yesterday, I had a conversation with someone who, in addition to being a very wise man I have always looked up to, is a regular reader of this blog. While he himself probably hasn't been a regular rider of public transportation in Winnipeg since streetcars powered by clean and renewable energy wooshed and clanged down Portage Avenue, he offered some logical insight into today's proposed fare hike of an astonishing 25 cents.

If you want more customers, he said, you lower the price. You don't raise the price. In the private market--which Sam Katz and his grovelling host of sycopants on city council fancy themselves emulating--sharply increasing the price on anything will put you out of business in a hurry. Businesses that offer lower prices stay competitive. Transit can stay competitive, and lure potential part-time riders: citizens who own cars [or are regular cyclists or pedestrians] by lowering the flat fare. [This could be done by subsidizing public transit more, and depending on fare box revenue less. Winnipeg's fare-box revenue is around 52% of it's total operating budget, while in Vancouver, fare box revenue is only 37%] "It's an economic principle," he said.

The Goldeyes' ball park is a prime example of this, he explained. The stands are filled not because Winnipeg is neccessarily a baseball town, but because ticket prices are low: it's good value for your money. Many people who go to Goldeyes don't even know who the visiting team is. They just go because it's a decent little park that can offer a fun night out that won't break the bank. As a baseball club owner, Sam Katz is able to understand this. As a mayor, he doesn't seem to get it.

[If the Goldeyes ball club raised ticket prices by 12.5%, and justified it with vague, unsubstantiated talk about bringing a major league franchise to the city one day, would people believe it enough to pay the higher ticket price?]

The difference between the Goldeyes and transit, I replied, is that Sam Katz actually cares about the Goldeyes. Public transit, meanwhile, is something that is there to be milked to death. The less money the City has to invest in transit, the more it can spend on expanding roads like Chief Peguis Trail and Kenaston Boulevard.

Anyway, for those who are Facebook inclined, I invite you to join the "Stop Winnipeg Transit's Proposed Fare hike" group that was founded today.


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