Yesterday’s post mentioned the “honor system” method that is becoming increasingly popular as an enforcement mechanism on public transportation. The idea is that both weekly/monthly passes and single use tickets are sold by machines at the train stations, but in most cases passengers will never need to use their ticket or show it to anyone. Rather, enforcement is randomized, with officers occasionally boarding cars and handing out fines to anyone who can’t produce a ticket. Ideally the fines are sufficiently larger than the cost of a ticket, and also proportionate to the odds of getting caught, such that it is considerably -EV to risk riding without a ticket.
I believe the idea is that this method is less expensive to enforce relative to the traditional system where there are machines and turnstiles at every station. As an instance of applied game theory, I find this system very interesting.
Berlin uses this system, and when I was visiting friends there over the summer, they told me that the city had recently announced it would be moving to a pure honor system. That is, there would be no turnstiles and also no enforcement officers. Apparently it was costing more to pay the officers than they were bringing in in fines.
There are certainly ancillary benefits to such a decision, such as providing free transportation to those who genuinely cannot afford it (though I suppose some would argue that this is not a benefit). If the city were solely concerned about maximizing its combined profit from (ticket sales + fines – cost of enforcement), though, is publicly announcing this change and doing away with the enforcement really the best way to go about it? What would be their most +EV move?
My perception US of America before September 11 was the most optimized honor system country overall.
Germany with their “order muss sein” was “totalitarian regime”.
But things has changed…
From my experiences on the Amsterdam public transport system, which has a similar approach (I spent a grey 2 months there in early 2010), the “youth of today” were almost universal ticket dodgers. Almost every little ol’ lady I saw dutifully swiped her travel card.
Women tend to be more risk averse, so I predict would cheat less than men at every age level.
I would always post officers at the main station (e.g. Amsterdam Centraal) where most journeys have at least one terminus, and randomly assign them at satellite stations.
Initially I’d profile my checks to 95% men under 40 and women under 21. 5% others to maintain that sense of risk aversion among the low risk groups (although I know that just seeing tickets being checked was enough to have my girlfriend religiously pay for her fares).
I’d guess at least 50% of checks would result in a fine on day one. With marginal equity increasing drastically as that number comes down, keeping the same demographic profiling.
At some point the culture will shift to one of de facto payment, and then enforcement can ease off, but I agree that one doesn’t want to advertise that fact.
However the dynamics work, I’d like to have enough officers checking tickets in such a way that a high percentage of checks result in a fine. If it’s too low, reduce officers or tighten the demographic (e.g. only teenage boys), if it’s too high, do the reverse.
P.S. This conversation is best done in a crowded bar over a few beers.
from a purely personal standpoint, i feel less inclined to cheat a system that i can easily afford, such as the candy bars or whatever you may see inside of a brake shop or any waiting room. with this in mind, i would think about dropping the price of a one-way ticket to something i would be extremely embarrassed about if i were to dodge the honor system. i’m sure this is an americanized view, as most europeans have never been called a cheap ass by friends while discussing a tip since tipping is not as widely practiced there.
In Switzerland it pretty much works the same as in the case you told. So there are some controls now and then but obviously you don’t know when. The only exception to that are “long-distance” trains (thats obv really relative in tiny Switzerland, but bascially those are trains that operate under national authority whereas the local trains usually are a part of some regional transportation system). In these national trains there’s almost always someone looking at your ticket, but you can also buy one there if you don’t have it, you just have to pay ~5$ more for it.
A few months ago I was in Japan and there the system works completely different. If you don’t have a ticket you can’t get anywhere near the train, so to enter the core part of the station you need a ticket. Basically the same way as most metro systems work (at least those that I know of, I don’t know how it’s done in the US).
I think when they make clear they are using a game theory or cost/benefit analysis it ruins it being an “honor” system.
They are encouraging riders to use the same rationale, i.e. don’t pay if it’s not +EV for you to, that they are using in designing the system.
I dislike systems built in a way that encourage citizens to assume they are being screwed and try to cheat the system. Bad way for government and citizens to interact, and lose-lose for a rider who has to choose between “cheating” b/c it is expected of them, or paying which feels like a rip-off b/c they know it’s not fully expected, and that many others aren’t paying. Set a standard of payment, make non-payment not acceptable, period. Even if enforcement is sparse set a high fine so that paying the fare is the right strategy for everyone.
If you want to let poor people ride free, have it be free (use higher tax revenue from rich so they are still ‘paying’ for rides). Don’t create a system that encourages/forces poor people to be cheaters. For youth it encourages disobedience and gaming the system, and for older people it’s a lose-lose: cheat and be a bad person/feel guilty, or comply and waste money you could be spending on food and utilities.
Government has the ability to encourage people to act beyond their own personal short-term self interest, it’s an uphill battle, but one worth waging. Don’t regress by creating a system that constructs you vs. the world scenarios.
If you would like to still collect some fare money but not have enforcement, just run it tip-jar style, asking people to donate what they can afford, have good advertisements to encourage it and construct donation schemes in a way that embarrass those who can afford it into donating frequently. That way you encourage people to support the system, pay for a service they use and help subsidize that service for everyone, rather than encouraging people to cheat.
Another option to legitimize poor users while allowing them to pay less would be to require everyone buy a ticket, and enforce that, but allow the option to choose the price you pay for the ticket, down to a trivial amount.
Good post. As realistic/practical solutions, those are all better than the solution I have in mind. Mine would make more money though, probably at the cost of a general loss of legitimacy to the government.
Raising the fines as high as they realistically can, and maybe cutting back some on enforcement is the most +EV move I can think of. The problem of going to the pure honor system is less people will buy tickets now, meaning it will probably be -EV over the previous system even though the enforcement officers were -EV in a vacuum.
There’s what maximizes EV for just the transit system, and then there’s what maximizes EV for the area the transit system serves.
It would probably be hugely +EV for most urban areas to provide totally fare-free public transit, but political realities won’t permit that.
What would be a government’s goal in implementing a system like this? To encourage the use of public transportation as opposed to cars, and enable the poor to ride as well?
From a purely social standpoint I don’t think you can ever rely on people to do the honest thing in these situations, at least not enough to make it plus EV. In fact I think you can count on most to “forget” to get a ticket.
No matter how you look at it the taxpayers still pay for the government to operate the facility. Either say its paid for in taxes and no ticket is required to use it, or require everyone to get a ticket. Those that pay taxes will still be paying for the poor’s use of the train, however. Maybe a subway equivalent to food stamps would be helpful to those that could qualify. But anyways why not provide a public transportation system that doesn’t lose the taxpayer the most money. (And I don’t think a completely “free” no ticket system would be cheapest for the taxpayer).
In some bathrooms in Switzerland and other European countries you have to pay a little bit to use the public restroom…seems funny to me that they wouldn’t apply the same standard to their public transportation.
It seems like comparing officer salary to fine revenue is the wrong comparison. The marginal impact of officers on revenue also includes all the extra ticket sales from people that wouldn’t buy if it were a pure honor system. So purely as a business decision, this seems misguided.
Yes, that seems to me like the major problem with a simplistic line of thinking like, “The officers aren’t collecting enough in fine to pay for themselves,” if that really was Berlin’s reasoning in the first place. For realistic alternatives, I like the Eabell and Eric suggestions of free and/or voluntary donation systems. There probably is free public transit in a major city somewhere, but the only one I’ve experienced is in the main downtown corridor of Portland. I think also if you are outbound and board at one of the last stations in Boston (ie you are going only a few stops and away from downtown), you aren’t charged.
Anyway, my tongue in cheek suggestion after hearing about Berlin’s change was that they should announce that they would be doing away with enforcement, and then after a few weeks do a big sweep and issue hundreds of fines. Probably more +EV (in a very short-sighted way) then either continuing with the status quo or just doing away with enforcement.
It will always be beyond me why Public Transportation isn’t free.
Governments want people to use the system for “green” and “traffic congestion” reasons so make it free and the most people will use it.
Train-trips over an hour I can understand paying for. Subways and buses, I just don’t get it.
Most transportation systems are publicly subsidized anyways.
Plus poor people often get free passes.
In the end charging for public transportation is just a way of giving rich people who never use the system 50$ a month (when compared to making the system free and charging everyone a little more on their taxes). Everyone else has to pay about that much (on average) for the service. plus, Think of the money saved by not collecting (&selling tickets) and enforcing fares.