Beijing Subway Fare Increase Proposals: Let Us Count the Ways

Steven Schwankert | Dec 19, 2013 1:27 pm | 31 comments | 9400 reads

Looks like the era of the two-kuai subway ride is quickly coming to a close. As we reported Monday, and as headlines in Wednesday’s Beijing News say the relevant authorities are currently weighing five proposals to raise fares on the system which currently charges a meager RMB 2 per trip.

Although officials gave no indication of the size of any future increase, they did say a fare increase is inevitable, as the system is currently being subsidized to the tune of RMB 18 billion this year. The Beijing Subway loses RMB 5 on every ticket sold, according to Gao Yang, a Beijing CPPCC Beijing Municipal Committee member. At the same time the lines are already being used at well beyond capacity at peak times.

Officials made reference to "international norms" of commuting costs absorbing approximately 10 percent of the average annual income of a city resident. Using RMB 5,000 as a base monthly income for Beijing and a 20-day work month, that extrapolates to a daily commuting cost of RMB 25. That would be quite a rise, especially for lower-income commuters, from the current RMB 4 per day, roundtrip.

The five proposals being considered are:

Rush Hour Price Increase: This proposal institutes higher fares during peak travel periods, similar to how London’s Underground currently works.

General Price Increase: An across-the-board increase from the current RMB 2 per trip.

Distance-Based Pricing: Used by the Hong Kong subway system, which has fares that range from HKD 4 to HKD 46 based on how far the person is traveling, excluding the Airport Express.

Price Per Line Used: One price per line, but if switching lines, price increases.

Fluctuating Prices: Fares change based both on distance traveled and on peak/off peak hours.

Statistics cited by the Beijing News indicate that the Beijing Subway could be a victim of its fantastically low pricing and increasingly efficient network.

 

Currently the system is often running above maximum capacity, with the three busiest stations – Tiantongyuan, Tiantongyuan North and Huilongguan stations – servicing over 20,000 passengers during the 120-minute daily rush hour period (which works out to a rate of 167 passengers entering the station every minute).

The low pricing and increased convenience may actually be drawing people away from other forms of public transport: officials say Beijing’s public bus system is currently massively underutilized: the fleet of 22,000 public buses can handle 18 million daily passenger trips, but currently only delivers 13 million trips.

However, a fare rise doesn't solve the problem of congested surface roads, which may be the Beijing Subway's leading attraction. Given the Subway as the only transportation means that allows commuters to arrive at work at an anticipated time, most riders will simply absorb the price increase, rather than roll the dice on similarly crowded, but less predictable, busses.

At the same time as considering fare increases, other measures to ease congestion are being considered, none of which are simple to overcome: due to station design there is limited capacity to add more cars to any train, and more frequent trips also stretch the capacity of the system and could lead to safety issues.

Officials hope the price increase results in lower congestion during peak hours. Passenger stats indicate 40% of rush hour passengers are not regular commuters, and a price increase could push many of those to alter travel plans to travel at off-peak hours.

On the good news front, two extensions of Line 8 are to be ready for testing before the end of this year, adding to the current track length of 465 kilometers.

Photo: Wikipedia

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mtnerror's picture mtnerror Submitted by Guest on Thu, 01/09/2014 - 11:22

Except that they DO have trouble paying the bills. As noted before, subsidies are increasing despite increase in ridership numbers. Read this and open your eyes, Squid: http://beijingtoday.com.cn/2013/12/subway-slash-traffic-price-hike/. It's not a very long article so I trust you should be able to stomach it. Start saving your mao, Squid.

squid's picture squid Submitted by Guest on Mon, 12/30/2013 - 21:14

mtnerror wrote:

(Yawn) "Of course, the system only nets out that way because of low-interest loans from a Japanese development bank, with the remaining favorable financing from the state and national governments. The state supplies electricity for running the Delhi subway."

The state supplies electricity...which the subway systems pays for! At a rate that is higher than neighboring communities no less! That is why power accounts for 40% of the subway systems budget!

Which means they probably pay more for power than Beijing does. Imagine if they had an even lower energy bill.

squid's picture squid Submitted by Guest on Mon, 12/30/2013 - 10:33

mtnerror wrote:

Stop backing your claims with copy/pasting of Wikipedia blurbs, but instead go to the articles which are referenced and get the full picture, by people who write for a living. Once in a while you may run into someone in a forum who actually values journalism, reading more than a paragraph's worth, and putting forth arguments based on sound reason and supported by verifiable sources. It's plain to see you and I do not share this in common, and I would imagine that's why for you it's been much easier in life to smear "you can't read" than attempt objectivity.

Haha, more satirist humor. The copy and paste was from the article WHICH YOU REFERENCED for God's sake. Your own article says that the Delhi system receives ZERO, NADA, NO subsides from the government. All for an average fair less than Beijing's. They do it by managing the business better.

mtnerror's picture mtnerror Submitted by Guest on Sat, 12/28/2013 - 11:50

Stop backing your claims with copy/pasting of Wikipedia blurbs, but instead go to the articles which are referenced and get the full picture, by people who write for a living. Once in a while you may run into someone in a forum who actually values journalism, reading more than a paragraph's worth, and putting forth arguments based on sound reason and supported by verifiable sources. It's plain to see you and I do not share this in common, and I would imagine that's why for you it's been much easier in life to smear "you can't read" than attempt objectivity.

squid's picture squid Submitted by Guest on Mon, 12/23/2013 - 18:01

Whew, what a relief, it really IS BECAUSE YOU CAN"T READ! from the article that you actually linked to-in glaringly obvious words! (Maybe you can ask someone to draw pictures for you):

"It is one of the few subway systems in the world that is operationally profitable without government subsidies, thanks to revenue from advertising, property leases and parking fees, in addition to ticket sales. It racked up revenue of $100 million last fiscal year and profit before taxes of $3.98 million. Also, other Indian cities pay consulting fees to learn how to gain from Delhi Metro’s experience."

And the absolute maximum ticket fare is less than 3 yuan!

You really must be joking. Were you trying to make a point? Do you even know what is was? I wanted to draw big red lines under the sentence, without government subsides, and profitable, but then suddenly your gag hit me, you are a surrealist prankster. Good one!

mtnerror's picture mtnerror Submitted by Guest on Mon, 12/23/2013 - 12:30

@Squid: very much like you to skirt.

These are your words: "I also don't agree with you that the subway is highly subsidized by tax dollars. The government pays for the intial construction of the subways-"

18bil yuan in subsidies/yr for a system that has 10mil riders/day? Are you're still clinging to your argument? Yikes. And paying ¥6-7 for your entire trip to Tongzhou or Changping or wherever you want to go is too much, too unfair, too profiteering of subway operators? Yikes x2.

You're being called out again on your Delhi Metro comparison. Sometimes life is more complicated than what Wikipedia may present. From the 2nd article which on paper backs up the claim you're using from Wiki: "Of course, the system only nets out that way because of low-interest loans from a Japanese development bank, with the remaining favorable financing from the state and national governments. The state supplies electricity for running the Delhi subway." http://www.forbes.com/global/2009/0511/026-india-delhi-subway-builder.html

If you care to dig a bit deeper:

"Delhi Metro Rider Subsidy More than
India Per Capita Income" http://www.publicpurpose.com/ut-delhimetro.htm

In this one, you will see that power accounts for 40% of Delhi Metro's operattional costs (I know you still need some work on figuring out costs): "Traffic jolt may hike Delhi metro fare" http://articles.timesofindia.indiatimes.com/2013-06-05/delhi/39763894_1_fare-hike-delhi-metro-rail-corporation-tariff

"Is the Delhi Metro a costly mistake", from 2006, seems to also refute your "profitable from Day 1" argument. http://www.rediff.com/money/2006/apr/03metro.htm From this article you will read ""In Kolkata, people choose what suits their pocket -- the cheapest, most subsidised means of transport," says Jayesh Desai, head of the infrastructure group at Ernst & Young."

lynxlynx's picture lynxlynx Submitted by Guest on Fri, 12/20/2013 - 22:32

I suggest: people who stand in line, don't push, smile, let the elderly and weak sit, don't spit, don't hide under the seat or harass others, who brush their theeth, maybe even whistle once in a while or tell their neighbour a joke or even do some knitting or... - well, add sth., be creative - they get a ride for free: not only in BJ, but all over China, in Asia, ah, why stop here, all over the world. All others have to pay - maybe 1 percent of their monthly income per ride, or the equal of a BigMac... ah, no, they should push the subway train so the city saves energy cost. Or maybe skip the subway trains, each who is supposed to pay has to carry one who doesn't have to on the back. So both reach their desired destination, one relaxed, one maybe not so. Or, hm, maybe those who... no, maybe not. Difficult.

Should thin people pay the same like fat ones? Little ones as much as tall ones? Track their phone to see how they use the subway system? Flip a coin? Tricky. Or move one district to Inner Mongolia so there is more space for others? But what if they need to... No. How about people stay at home, and their work is sent to them on the subway? Their shopping bags. Maybe confusing: "I didn't order lamb, I'm a vegetarian; and I am a consultant, not a painter. And: why is this sheep pink?". No, I'm afraid I have no answers, no solution, sorry for wasting your time, but thanks for reading anyways. Happy weekend.

squid's picture squid Submitted by Guest on Fri, 12/20/2013 - 18:51

mtnerror,

I finally get it, you can't read. For instance, I never once said the Beijing subway doesn't run without some government subsidies, but in your distance based obsessive mind, you created that. I also pointed out to you exactly how the system can increase revenue without doing ANY fare increases-exactly like the India subway system has done. You also apparently couldn't read that so well, because I explained to you that they were solvent, THE VERY FIRST DAY OF OPERATION! But you were too worried about the cost of hiring people to sell adverstising, haha.

For a city like Beijing, the subway should be cheap. In fact, a great approach would be if its free! Since that is probably unlikely to happen, the next best thing is having it be as cheap as possible, for everyone. Only an across the board straight fee does this. Great solution, but you will never realize this, because you can't read.

I can't get to your whole Mayor of Sim city problem yet, because you won't even address why you don't have anger over everyone paying the same for internet.

mtnerror's picture mtnerror Submitted by Guest on Fri, 12/20/2013 - 18:26

@ Squid: you get to play mayor, or comptroller, or whatever you want for a day:

You are in charge of Sim City. Your city's citizens are taxed at XX rate, providing you with ¥100bil. However, one of the city's services (the subway) is running at a deficit, a deficit which is increasing. The man who served in this position, whom you have replaced, made the decision to keep the subway's fare structure at current levels. However, to remain solvent, stay in good standing with creditors, and continue to provide public services which your citizenry expects as a result of their paying taxes, choose which of the following you would reduce to allow the subway to operate with no changes but also to come in at budget:

A. Current operating budget: ¥20bil -- Water sourcing and treatment -- your townspeople are like all people on earth, in that they need it. Your city has few natural resources so it has devised a way to obtain such resources from nearby and faroff areas -- this comes at a great cost. The city's water supply and quality have already been rated low and population is forecasted to continue to exceed supply for foreseeable future. The public is becoming increasingly discont with the costs they are having to adopt in order to provide clean, potable water to their families.

B. ¥20bil -- Public eduation -- Outdated schools and facilities are impacting the young people (tomorrow's job seekers) of your city. In an ultra competitive global landscape and a soceity where parents value their children's education, your school board must continue to churn out well educated pupils or be left in the dust. Also, as your city continues to increase its standing in the world and attract employers (job provides who in turn pay taxes), a highly-educated workforce is necessary to be competetive for the future. Teachers have argued for higher wages.

C. ¥20bil -- Public health -- Diseases such as diabetes, cancer and dimentia are being deteceted at an alarming rate. Prevention, detection, and management of your citizenry who are afflicted are all necessary to the long-term sustainability of your city. Citizens expect new trends in health care and medicines and operating procedures to be increasingly available to them. As the city's population grows, so too do new hospitals need to be built. Hospital staff, recruitment, and teaching hospitals are searching for the best qualified professionals but low salary pay negatively impacts the ability to attract top top talent. Your citizenry is also aging at an advanced rate and limited number of offspring make any fees passed on to the next generation very hard to deal with and gives immense pressure to your municipal gov't as a whole.

D. ¥20bil -- Environmental protection & food safety-- With so much manufacturing and construction ongoing, your city must invest in substantial environmenal protection forces. Your citizens have expressed discontent in the growing number of food scandals taking place in their city and are worried about the quality of food. Citizens have also expressed discontent over your city's air and water quality, and both are having an impact on tourism and adding to public health costs. The hospitality industry is looking for these problems to be resolved or forced to make changes to their operating models. The tourism industry employs X,XXX,XXX of citizens and provides XX¥ to your tax revenues.

E. ¥20bil -- Law enforcement -- As your population continues to grow, so too do the demands of your police force. The judicial system is also overwhelmed at times. Your fleet of patrol vehicles is also aging and you are enduring disproportionate upkeept costs due to old fleet vehicle maintenance. You must continue to invest in a qualified law enforcement department in order to combat the latest crimes, evolving methodologies, and resolve displayed by those who would do your citizenry harm, especially as your city continues to attract a heterogenus. A recent domestic terrorism event is worrying to some of your citizens and is having an impact on people's psyche, tourism, and general well being.

OK, Squid, show me the money!

mtnerror's picture mtnerror Submitted by Guest on Fri, 12/20/2013 - 17:55

You have been sure of other things that turned out to be completely opposite (remember your staunch denial that the Beijing Subway was operating without subsidies...muahaha), so by you saying "pretty sure" I dare not even consider. With your first question, again, you're playing this all-or-nothing game. By charging distance-based fare the subway cars will not turn into ghost cars, despite your insistence. Why do you think it's so fun for municipalities to run a deficit? Why do you think reasonable people like me are either for virtually "free" (see: putting the charge on someone else's tab) subway transport or for a subway that only totes around the rich? Do you not see a middle ground here, Squid? With the billions in subsidies, the city has what is akin to a white elephant on its hands. There are simply too many monies being sucked up by subway riders. Continue with your way, the deficits will only get bigger and only more money from other worthy causes will be slashed. The article already mentions the overcapcity the trains are running at, the infrastructure limitations which make pursuing other choices very costly or simply nothing more than a Band-aid. I want the subway to be a safe, cheap option for people to move about as they please -- it's why subways are built. But change is very much needed, dear Squid.

squid's picture squid Submitted by Guest on Fri, 12/20/2013 - 15:49

Why do you keep insisting that the money for a mass transit system which decreases traffic congestion and pollution is better spent on other things? Where are you getting this value judgement?

And I am pretty sure there is not another subway system in the world that uses a distance based calculation the way you describe it. Most do as admin described, they divide the system into zones, so that there are many occassions where two people who go different distances still end up paying the same price.

mtnerror's picture mtnerror Submitted by Guest on Fri, 12/20/2013 - 15:14

Dodged question recap: Squid: probably 7 or so. Mtnerror: 0.

Only a moron would pull some number out of thin air. It could be .000001 RMB, it could be 10,000 RMB; what is the difference? The distance-based rate should be one, that when combined with the base rate, which is determined by the subway operators based upon current demand, future demand, current expenses, future expenses (which are growing as the lines become more extensive). I don't have access to those numbers, you don't have access to those numbers, so what is the point? If you insist on a number, I will throw up 0.25. I can also throw up 25. If that is what your brain requires for processing, so be it.. Because you're used to reading a few paragraphs and writing less or equal to such an amount doesn't mean longer responses or in-depth articles are "paint messes." I realize I'm a bafoon for replying to someone like you with such care, but I do it in hopes of getting you to form an argument based upon facts, verifiable articles to back up one's assertions, observations, and the like. But I see you will never come to it.

Let the monies currently going towards subsidizing your rides go towards other things. Let the subway be one which is more self-sustaining. Let the monies go towards other public goods. Stop the shenanigans.

britomart's picture britomart Submitted by Guest on Fri, 12/20/2013 - 15:01

@ Britomart: you're either passionately misread or being cheeky. Trying to lump my posts into the same realm as Squid's is asinine.

Well, I was attempting the latter. Being cheeky, that is. Though there was an element of honest curiosity... I was following the conversation between you two guys, analyzing how many time logical fallacies were used as supporting points.

As to the "passionately misread" comment, I'm not entirely sure if I am or not, since I don't know what that means. Which I suppose is an indication of how "passionately misread" I am...? Or was I passionately misreading? Well, passion was not exactly the emotion that came to mind when reading a discussion of subway fare increases.

And really and truely, please rest assured--I had no intention of lumping your posts with Squid's posts. You guys are clearly nowhere close to being in the same realm.

Yours truly,

Asinine Yet Cheeky

Doubt wisely; in strange way / To stand inquiring right is not to stray; / To sleep, or run wrong, is. (Donne, Satire III)

squid's picture squid Submitted by Guest on Fri, 12/20/2013 - 14:34

mtnerror,

I understand why you want to dodge the question of how much you want to make the increase for each stop-of course it makes your argument so much more difficult to sustain that it already is.

I don't know what you are talking about lack of responses. You throw ten buckets of mixed paint agaist a wall, and then you ask, which do you like. There is no answer to that mess. Your latest incarnation of rounded off to the nearest yuan hodge podge of words with no continuing theme is another of these paint messes. While you are spilling paint everywhere you seem to have thrown logic completely out the window. Britomart didn't lump your posts in with anything, she asked you a simple question. You answered with Jackson Pollack imitations.

Efficiency of words, I think you should practice that art instead.

mtnerror's picture mtnerror Submitted by Guest on Fri, 12/20/2013 - 10:36

Still, with the lack of responses. Comical. And yes, I recall what you told me. But it's too one-sided.

And I told you my concern is for others as well, for the ¥18bil worth of subsidies can be put to use for other public goods such as public education or health. You sure are prejucided against other public goods with your lion's share of love behind this particular public good overs so many others. (Stations traveled x distance-based rate) + base fare. It's not rocket science. For those who purchase a single-journey ticket, their total is rounded up to the nearest yuan (this allows the current machines to remain to be used). The single-ticket is still credited with say ¥5, so in the event the visitor read the map wrong or changed their mind on their route, they're still entitled to the full ¥5. If they get off an the station that takes let's say ¥4.4 to get to, then operations keeps the remaining ¥.60. If someone is not using an IC card, they're either a tourist to this city and the city tries to make money off of them wherever they can (see: Airport Express, ¥25), or they're an infrequent user of the subway and thus they will either forego losing their ¥.60 by instead using their normal mode of transport, or they will decide it's still a good enough bargain overall and proceed with single-journey ticket purchase, or they will buy an IC card. For the regular riders, they use IC cards which do take into account fractions of a yuan -- just like buses -- and there is no change to them or the IC cards or the machines, etc. It would be silly of me to proffer an actual distance-based rate since I don't know the particulars of the operating budget shortfalls.

@ Britomart: you're either passionately misread or being cheeky. Trying to lump my posts into the same realm as Squid's is asinine.

mtnerror's picture mtnerror Submitted by Guest on Thu, 12/19/2013 - 20:51

@ Squid: I will answer your question when you answer my questionS (note: plural). So go ahead, answer my questions.

But actually, you don't need to. You want to try and compare BJ to Delhi subway (with a total of 6 lines...hardly a good comparison) so badly. You have shot yourself in the foot countless times with your ill informed rants, and you are at it again. Delhi Metro charges (you need to sit down for this) distance-based fare! If they're indeed not taking subsidies (I don't care to look it up because you have nailed your own coffin), you can credit the Delhi geniuses who decided to charge distance-based fare because guess what, this formula works for an overwhelming majority of cities around the world! You really crack me up with your supposed analogies which only hurt your argument -- which is nothing more than an illogical tirade. You fail to acknowledge much and are increasingly making desperate, emotional pleas to passers-by. It's over, it's done with.

And I'm sorry yet another article mentions Beijing's ultra-cheap flat fare is due to an ungodly subsidy sum. From the looks of your posts, you're attempting to direct your anger in my direction. If that is what makes you feel better. keep it comin'. If something like ¥7 (what Shanghai Metro charges a rider to ride the entire length of Line 1 -- that is 28 stations!) is too much for your to shoulder, if you think it's too grossly unfair, then you probably have a lot of anger built up inside. Or you should go move to Delhi where the CNY will work in your favor.

squid's picture squid Submitted by Guest on Thu, 12/19/2013 - 18:31

Yes, I am quite aware of this. But apparently mtnerror thinks this is patently unfair, because that means that a person who only goes one stop has to pay as much as someone who goes perhaps three or four stops. He hates this. He despises this. This to him is the height of gross injustice.

He feels this is not making people pay for what they use. I think if he had his way you would pay for every minute or fration thereof that you in are inside the station-because he believes there is a cost involved for this.

squid's picture squid Submitted by Guest on Thu, 12/19/2013 - 18:24

For you information, the subway system in Delhi India is one of only an estimated FIVE subway systems in the entire world that operate with a profit, with no subsidies. You know how much they charge?

The cheapest fare is less than one yuan, the highest fare is about 2.7 yuan. Forget not getting subsidies, they are actually makng a profit.

Since Beijing subways operate at beyond capacity, its likely that the problem isn't too low of fares, but rather poor management and cost controls. And perhaps not very good book keeping.

admin's picture admin Submitted by Guest on Thu, 12/19/2013 - 18:19

Most subway lines don't charge per station. They divide the city into zones, usually small ones downtown but larger tracts as you go towards the suburbs. This can potentially make it so the truly distant are not unduly punished with super-high fares.

 

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mtnerror's picture mtnerror Submitted by Guest on Thu, 12/19/2013 - 13:53

In news that is shocking to no one, today's average subway ride costs WAY more than ¥2 and things are going to change! Those subsidy monies are not sustainable in the long-term, on top of the tremendous costs the building of new lines and expansion of current ones are bringing to the operating budget. Time for the longhaulers to start paying their "fare" share. Distance-based fare is practiced in countless other cities in this country, not only HK. And don't let the article's HK MTR price quote scare you folks: Shanghai Metro's entire Line 1 journey (28 stations in total) costs only ¥7. Charging special rates during rush hour seems to only penalize those who are working and getting to school; people have to arrive at work and school at that which is handed out to them. Charging based upon distance is the most fair way to go!

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