Jun 2, 2014

Should public transportation system be government-owned?

Down under, living in Melbourne, Australia, we have one of the best transportation system. I took trains daily between my home and office. It takes me 30 minutes only; comparing to driving, it may be up to an hour.

Metro is now the company maintaining the system. Is it worth to have a private company handling our public system? Now, we spent up to 3 (?) billion for Myki (contracted for 10 years). Won't it be cheaper to make the public system for free?

Let's do some calculation: Fare evasion is 13%; Metro says they lose 50 millions out on that. It means around 400 millions per year. From VAGO, profit is around 30% of revenue. It comes to 270 millions cost per year.


Making transportation free means we don't need so many people around to check the ticket, sell the ticket, guarding the gate, etc. Not sure how much money we can save on this one. Let's assume the cost will come down to 200 millions a year.

That is 2 billion a year. Less than what we might pay for Myki, but (Here is the but!) by making public transportation free, we encourage people to use the system, reducing the traffic and pollution, saving the planet.

Maybe increase the fuel tax or reg may offset the cost. What do you think?

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