Fare hike a billion yuan question

Throughout the world, transport fares are the concern of not only transport operators, but also commuters. A fare policy determines the amount of subsidies a public transport agency needs to cover its operation costs. It also determines which modes of transport people use and how many cars are on the streets.

This means a new fare policy in Beijing could drastically change the ways the surface and underground transport systems functions. So why do authorities want to increase transport fares?

Beijing subway yields relatively low revenue because of the flat fare of 2 yuan ($0.32) for one trip (which could extend from 500 meters to 88 kilometers - not including the airport line), creating a fiscal burden on the subway operators. It also affects the efficient allocation of resources, because without charging the appropriate fees for a service it is difficult to determine its true demand and, hence, the areas in which it needs improvements.