The MTA Money Machine

Most NYC travellers know the problem of having just under enough fare balance on their Metro Cards, only to end up shoving the cards away, forgetting to refill them before they get a new one for their fast paced NY lifestyle. Photo courtesy of Getty Images.

Written by Brendon Khan

In New York, commuters, both regular and occasional, continue to lose money, while the Metro Transit Authority cashes in on a free source of income. This occurs through the small stray balances travellers leave on Metro Cards until they expire — assets for the MTA. The balances are usually so small that most travellers fail to think twice about making use of them, but over the years they have added up to significant gains for the MTA and consequently significant losses for travellers.

But, this begs the question, should the travelling public take fault for their losses, or has the MTA engineered a system that causes these gains to occur more frequently?

Most NYC travellers know the problem of having just under enough fare balance on their Metro Cards, only to end up shoving the cards away, forgetting to refill them before they get a new one for their fast paced NY lifestyle. The MTA records these unused balances as liabilities since they can be used toward fare; making the MTA owe the customer. But when cards expire, this liability is converted into an asset for the MTA.

According to the New York Times, by the decade ending 2010, the MTA converted about half a billion of these fares, adding to revenue as “fare media liability”. Ultimately, this is a sizeable loss for MTA’s customers. Many commuters who have packed schedules accumulate these losses because they don’t have time to manage their cards; instead they just buy new ones.

However, the MTA’s system also tends to throw off the otherwise simple math behind Metro Cards. Instead of commuters paying number of fares times fare price, they can also get a 5% bonus if their fare is large enough. This leaves you with a small balance as a remainder after usage, and can lead to “fare media liability” revenue for the MTA. Such a system could be costing consumers millions of dollars a year.

This begs the question as to whether the MTA should reform their system. Some may say it is unethical that the MTA promises consumers “bonuses”, knowing that a large portion of these will just be sent back to the MTA as revenue. Therefore, they say the MTA should redo their system where consumers can maximize fares from their money spent and minimize losses conveniently.

The MTA does have some systems in place that could reduce the likelihood of these phantom fares. By charging $1 for a new card, the MTA encourages consumers to refill and use up the balances on older cards. There are also monthly and weekly cards where fare is not left over, though this may not be feasible for some commuters and tourists.

Since the stray fares are just a small portion of revenue, should the MTA reform its system and give these back to consumers? Or does this problem lie solely on consumers who can’t stop long enough to do the math? No matter who is a fault, consumers continue to lose and the MTA continues to gain from the accumulation of these stray fares.

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