Metro General Manager John B. Catoe, Jr.'s plan to increase fares in order to cover a projected budet revenue shortfall has hit a snag. Oppostion to the plan has forced him to reconsider the plan.
Please read the article and commment (from the perspective of Metro managment) on the issue, impacts, stakeholders and actions that could be taken to align Metro's behavior with stakeholders' expectations.
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/22/AR2007092201344.html
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11 comments:
As a loyal metro rider, I of course oppose a price increase. I've been following this since it was first brought up, and I was wondering why such a big increase. The board members are justifiably concerned with why such a drastic change is necessary. Riding the metro has been an alternative to driving in and around DC, and an attractive alternative because it is cheaper than the constantly changing gas prices, avoiding the traffic, and cutting back on car fumes in the air. Well, already the metro trains are constantly clogged with people, so you make your own decisions if that is better than braving the traffic in DC. Well, if you drive an environmentally friendly car (which I don't), then you aren't concerned so much about that, thus leaving the price. If the price continues to increase, eventually, I will pay more in metro fares getting to and from work/to and from class than I would paying for gas were I to drive to work every day. And that is just the eventual effects for me. Or, someone like me. Perhaps I went a little soapbox there. Needless to say, the delay is needed not only for the price hike to be justified to the board, but justified to the masses.
The metro management and Catoe have a difficult situation on their hands. As he attempts to offset a projected shortfall of $140 million, Catoe may find the actual money to be the least of his worries. There are many stakeholders involved: 1)board members, 2) public, 3)metro employees, 4) government officials, 5)alternative providers of transportation (taxis, private buses), 6) and tourism officials. The 12 officials from three different jurisdictions bring very different priorities to the table. Board members are appointed by elected officials or elected in their home jurisdictions, so political ties are often involved and so our one's responsibilities to the constituent base.
You have two distinct audiences (metro riders and non-metro riders) that have different transportation styles (long distance, short distance, bus/rail, etc.) The non-metro riders weren't mentioned in the article, but are definitely key players because they're affected by an influx of commuters.
I would recommend several action items for Catoe:
1) He needs to provide a situation analysis and effectively explain the revenue shortfall--what snag occurred? When will it hit? How will it affect metro operations?
2) He needs to thoroughly weigh all options and present them to the board members. They must reach a consensus.
3) Depending on what option is chosen, Catoe needs to develop messaging for EACH audience and present Metro's bill of rights for the customers.
As the article points out, lumping all Metro customers together as a single category of stakeholders is a serious misjudgment. In Catoe's assessment of the situation, he made this critical error. He either did not realize the implications of proposing an across-the-board increase or the politics involved in getting such an increase approved by the Board. The local politics of the Metro Board take into account urban residents of the District, suburbs of Maryland and Virginia and tourists. Although all these stakeholders can be classified as "Metro customers," their interests and priorities (not to mention socioeconomic status) are very different.
Beyond the practical implications of a fare hike, Catoe also should have had a better understanding of the internal deliberation process of the Metro Board. He obviously was not prepared for the backlash he received, but this could have been avoided if he talked to former Board members or other stakeholders who had a better sense of how the Board handles these sort of proposals and makes decisions.
Moving forward, Catoe should work with the Board to come to a compromise that not only solves the budgeting crisis, but equitably and fairly distributes the cost to all stakeholders involved (including state and federal government).
Somehow Catoe believed that logic would overpower politics and public perception. The budget shortfall of metro (which in itself seems odd when you consider how many tourists lose money buying tickets) needs to be resolved. At first glance raising prices is probably the most logical option and the fastest option to fix this problem. Unfortunately, Catoe didn't seem to take into account that a price increase was going to ripple through commuters and governments the way it did. Commuters don't want to pay more money to use a system that is seeing increasing delays and constant mechanical problems. Catoe needs to look at why people ride metro. One of the biggest reasons is the price especially when compared to the alternative of gas prices. If his solution is to raise prices everytime the budget is off then he'll quickly find that people are opting for their cars instead thus leaving those who remain to fit a bill that will continue to see budget short falls. Catoe needs to look at options that don't include a large price jump. If a large price increase is needed then it's probably best not to announce it right after so much negative publicity for metro. A gradual or spread out price increase might be an easier sell. Also I've seen reports that metro is considering placing more advertisements in metro stations to help with the cost. Personally I'd rather see more advertisements than a price increase but then I'm not really paying attention to advertisements
I agree with the idea the manager should have looked at the situation differently. He made the correct move of identifying the shortfall, and probably the correct choice of raising fairs but it was done so with seemingly no consultation with the stakeholders (employees, his own board, the public, etc.) and rather decided to bring it up at a board meeting. As one of the board members said, this issue has to be brought up in public so the board can criticize it and can at least look like it cares about the cost to the riders. The same thing would happen in any legislative body. If there was a massive budget shortfall, the legislature would convene and spend ample amounts of time discussing how this happened, where cuts can be made, what the long term goal is, and then maybe arrive at the solution of raising taxes. Catoe acted like a Senator walking into the chamber, declaring that taxes needed to be raised, and expecting 74 yea votes. In reality, the issue was raising the price on a service that people useprimarily to save money because they don't have a car, don't want to pay a price for gas, or don't want to pay for parking. Not only that, but their were geopolitical issues at hand, and that was dealing with not only district residents but Maryland and Virginia riders as well. This created another distinction: those who ride the metro short distances and those who ride it for long distances. So what can Metro management do next time? Act like it cares about its stakeholders. I would recommend starting out with at least acting like they care about the people who are going to have to pay a higher fare. This may include holding community forums where management listens to how the public depends on the metro, and what a price increase may mean to their lives. This is inevitably going to be have to be coupled with listening to the concerns of the board members because some of them are elected officials, if not then appointees. Bottom line, Metro management has to taken into account the concerns of the stakeholders of whom the fare increase will surely affect.
It is difficult to take a stance supporting the Metro Management when this issue is placed in the larger environment that Metro operates in. This is a problem that has been gestating for years. Metro is attempting to raise rates when the quality of the products has dropped astronomically over the past year. This year there have been several major "incidents" that brought the system to a crawl. Then there are the deaths of two women crossing the street from being hit by an out of control Metro Bus, and two workers on the yellow line near Eisenhower. Metro has been doing just enough work each year to just get by, but it finally caught up to them this year. Metro has not practiced any sort of plan to ensure that its customers know that they at least being considered. Every time an "incident" occurs the management behaves in a way that is frustrating. Lack of clear instructions, no warning to not enter the station to avoid being charged a fair and so on. People would be less concerned with the cost of the fare if the dependability was far higher.
Metro, however, is at the mercy of poor planning when the system was designed. There was no strategic planning. The revenue source is laughable, that there is no dedicated system for the nation's capital public transportation. It should be expected that the national government contribute vastly more, especially with the amount of tourists who use it. The system was originally designed only for the suburbanites, a group never expected to get as big as it is today. They installed carpet specifically to give the appearance that the metro could be as comfortable as driving into the city. Its goal of getting a few hundred thousand people into the city at rush hour has drastically changed. This may excuse Metro from part of its problems. It does not, however, excuse them from not paying any attention to the environment that they operate in.
The mistake made here is that John B. Catoe Jr. failed to understand that his job is to identify the problem, not provide a political course of action. That is the responsibility of the political appointees of the board. Catoe causes further damage by not seeking input or engaging in serious consultation before making his proposal at the last minute.
The lack of political skill on Catoe Jr.'s part does not lessen the urgency of the revenue shortfall. There is a course of action to deal with this.
First is to reach out to all stakeholders, the general public, customers and local officials. Make certain that any fare increase is neceassry and that revenues from this increase will go to operations and not frills or fluff.
Second is aggressive communications. Hold town hall meetings, information sessions. Seek input from all stakeholders on how to make the Metro system better. Give all stakeholders a feeling of ownership, that they need to be part of the solution.
Bad news is always better dealt with when people have all the facts and information available to them. Education and communication are the key components in this case.
New study finds public transportation use can substantially reduce greenhouse gases
If you really want to combat global climate change, take Metro. A new study released today by the American Public Transportation Association (APTA) finds that taking public transportation can be more than 10 times greater in reducing carbon dioxide than other household actions that limit the harmful greenhouse gas.
The study, Public Transportation’s Contribution to U.S. Greenhouse Gas Reduction, finds if one member of a household completely switches from driving to using public transportation, he or she can reduce their household carbon footprint by up to 30 percent. Commuting to work by bus or train reduces emissions by 10 percent.
“Metro buses and trains take 580,000 cars off the road each weekday and eliminate more than 10,000 tons of pollutants from the air each year,” said Metro General Manager John Catoe. “Everyone can do their part to help further reduce harmful greenhouse gases by taking Metro.”
An individual switching to public transit can reduce his or her daily carbon emissions by 20 pounds; that’s more than 4,800 pounds in a year. This is far greater than the many actions people are being encouraged to take, for instance:
Home weatherizing and adjusting the thermostat for heating and cooling saves 2,847 pounds of carbon per year. Transit use saves almost twice the carbon.
Replacing five incandescent bulbs to lower wattage compact fluorescent lamps saves 445 pounds of CO2 per year. Transit use saves more than 10 times the CO2.
Replacing an older refrigerator .
The research states that due to increases in vehicle miles traveled, the problem of pollution from vehicle emissions is accelerating. Greenhouse gas emissions from mobile sources have grown 27 percent from 1990 to 2004. Autos and light duty trucks represent about 61 percent of the total mobile source of greenhouse gas emissions. The report, prepared by Science Applications International Corporation, says single occupancy drivers switching their work commute to public transportation is one of the more effective ways to reduce the nation’s vehicle miles traveled while reducing harmful carbon dioxide.
Metro eliminates the need for 1,400 highway miles. The transit agency also has purchased eco-friendly buses that run on ultra low sulfur diesel fuel, compressed natural gas, diesel hybrid and advanced technology fuels.
The American Public Transportation Association is calling on Congress to incorporate public transportation into a national climate strategy and the report recommended key elements. It includes providing additional funding levels for more public transportation investment; providing tax credits to major employers who spend resources to support mass transit ridership programs; and tax credits to developers for mixed development residential, commercial and transportation sites that encourage greater use of public transportation.
From another site:
1. The Washington DC Metro Area is the 11th most ozone polluted metropolitan area in the United States.
While Catoe certainly mismanaged his presentation to the Board and failed to take into consideration the political response of its Members, the idea of a rate increase, in my opinion is necessary and important for the future of the Metro. The above article, which quotes Catoe, along with the pollution levels in the District and surrounding areas, is reason enough to see a rate increase. I realize there is a budget shortfall and the metro will not expand as a result of the rate increase, but the rates should be raised in order to expand it so as to provide better service/get more drivers off the road and clean up the air in the District.
I think the most interesting aspect of this debate – and one which Adam touched on in his posting - is the competing set of interests that exist between Metro passenger groups. District riders have a very different set of priorities from their suburban counterparts commuting from Maryland and Virginia. These competing interests translate directly to an adversarial relationship between the Metro Board representatives of the three jurisdictions. Board members seem to genuinely see a fare increase as something that is necessary to maintain (if not improve) Metro services, yet these same representatives seem determined to ensure that any fare increases will not be borne by their constituents. While the most logical solution would seem to be an even, across-the-board fare increase for all passengers (I would also suggest doing away with the peak/off-peak system in favor of a simpler single-fare system).
Yet, as the author put it, “It's the politics that prevail, not the logic.” Board members are far more concerned with re-election, which can be greatly affected by public perception of how hard that representative is fighting for his or her constituency – and against fare hikes.
Also, to touch on Josh’s posting, I think that fare increases would be more acceptable to the average Metro rider if they could be preceded or accompanied by marked improvements in the quality of Metro service. What I am somewhat surprised with is the seeming lack of effort to market the fare increase to the general public as part of an overall Metro improvement plan. As a daily Metro rider, my knee-jerk reaction to fare increases is negative. However, if the Metro Board can present a plan that justifies fare increases as a means of minimizes the types of “incidents” that have seemingly become commonplace, then I might be inclined to support them.
If we look at this from an economists perspective Metro has two options. 1. increase revenues to cover operating costs or 2. reduce operating costs.
Increasing revenue can come from increasing the amount of advertising, increasing the fare, or finding other sources of new revenue like allowing food/beverage vendors to set up shop in stations.
Reducing costs would either meaning cutting the number of trains per day, reducing staff hours, reducing hours or operation, etc.
I, like Courtney, am a loyal metro rider and I think it is a wonderful system. I grew up in LA where public transportation blows.
If I were Catoe, or if I were to guess what he is thinking, is that with a fair increase he can cover the operating deficit and not have to cut service or jobs, or reduce the budgets on a maintenance or expansion plans in the future.
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