Pros and cons of higher subway fares

On Monday Beijing's economic planning authorities announced two plans for new subway policy - both changing the flat rate of 2 yuan ($0.3) per trip to a distance-based fare structure. The hearing on the fare plans will be held on Oct 28. Either of the plans will no doubt benefit the metro company financially and in terms of urban planning. But then the government cannot go ahead with the plans without considering the social equity factor in its long-term integrated urban transport strategy.

The distance-based fare structure could have two distinct effects. First, higher subway fare would hit the low-income people the hardest because they depend the most on the subway to commute to and from work. Second, high subway fares could encourage excessive car usage, increasing congestion and pollution.

No wonder, there are concerns that after the proposed distance-based fare system is introduced, members of low-income households who cannot afford to pay higher fares will decrease chances of taking the subway. And since low-income people cannot pay higher subway fares, they would end up commuting by slower-paced and more crowded modes of transport.

To ensure that the rights of low-income people to travel by subway are not compromised, local Beijing authorities have to use some of the transport revenue to subsidize this group or provide them with alternate transport services.

There is little doubt that subway fares will play an important role in determining people's commuting choices, although other factors such as the quality of services, fuel taxes and parking charges also matter.