Subway fares in Beijing are finally going up.
After years of charging a flat rate of just RMB 2 for all journeys regardless of how far they travel on the subway's 465 kilometers of track, the new average fare is expected to average around RMB 4.3 to 4.4. There are now two new schemes on the table:
- RMB 2 remains the baseline fare for journeys of 0-3 kilometers. Journeys of 3-6 kilometers incur an additional RMB 1, with another RMB 1 being added for journeys measuring 6-12km (RMB 4), 12-18km (RMB 5), 18-30km (RMB 6), 30-42km (RMB 7), 42-60km (RMB 8), 60-78km (RMB 9), and 78-96km (RMB 10).
- Baseline fee raised to RMB 3 but caps fares lower at RMB 9. 0-6km journeys cost RMB 3 and go up from there: 6-12km costs RMB 4, 12-22km costs RMB 5, 22-32km costs RMB 6, 32-52km costs RMB 7, 52-72km costs RMB 8, and 72-92km costs RMB 9.
Frequent-commuter discounts will also be offered, with those who spend RMB 100 a month receiving 20 percent off and those spending RMB 150 a month getting a 50 percent discount. Public opinion will be sought on the plans and a public hearing held before the authorities decide which to implement.
Every year, the capital loses billions of RMB due to these artificially low prices. In 2013, the Beijing Subway lost a gob-smacking USD 558 million. For every ticket they sold they lost RMB 5.
Earlier this year, following online outrage when shifting to a distance-based price scheme was floated by the municipal government, the innocuous phrase "subway price increase plan" joined the pantheon of blocked terms on Weibo, standing somewhat incredulously between "Falun Gong" and "June 4."
As a result, the city has still not moved to distance-based fares. In a city as plagued by pollution and poor air quality as Beijing, encouraging the use of public transportation is important. However, intense overcrowding exacerbated by rock-bottom prices - the subway operates at 144% capacity during peak hours - also drives middle-class passengers to drive to work instead
Just to break even, Beijing Subway would have to charge RMB 6 for each journey, so even with the proposed fare increase they'll still only be losing less, and fares will remain much lower than in Shanghai or Guangzhou.
Although the Beijing Subway hemorrhages an exceptionally large amount of money each year, however, in fact metro systems worldwide are typically money-losers, to various extents.
The celebrated exception to this rule is, coincidentally, also on PRC soil: the Hong Kong Mass Transit Railway. Every year, MTR Corporation doesn't just break even but turns a massive profit counted by the billions of dollars. Not only does it boast the world's highest farebox ratio with 185 percent of operational costs covered by fares alone, but it also development fees and rent from shopping malls, office towers and residential compounds build on and around their stations.
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