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The U-Pass: An Economics Perspective

Weigh the U-Pass benefits carefully when you pull out your wallet./ Brett Nielsen
Weigh the U-Pass benefits carefully when you pull out your wallet./ Brett Nielsen

U of R Econ prof outlines strong case against U-Pass opponents

To the Editor,

This month, students will be making an important choice in deciding whether to accept or reject the adoption of a U-Pass in a university-wide student referendum. What I am offering to them is an economics perspective in making this choice. Due to the U-Pass program’s scale, their decision is a choice between two paths of city development. Both have their benefits and costs to transit and non-transit users alike. The current discussion in social media and the Carillon has thus far overwhelmingly focused on the benefits and costs associated with a potential Yes vote. However, little has been said regarding the cost-benefit implications of a potential No vote. To make an educated choice in their own self-interest, students should evaluate the benefits and costs related to the Yes-vote scenario as well as the No-vote scenario and choose the option with the larger net benefit to them. In addition, they need to be aware of how a No-vote outcome in 2015 could impact their budgets compared to previous No-votes in the context of Saskatchewan’s current rapid and sustained population growth.

Taking the benefits and costs of both the Yes and No outcomes into consideration, two concerned groups on campus – those who currently do not use the bus and those who will not consider transit as a transportation option under any circumstances – may not lose out by being forced to pay between $70 and $90 a semester. As paradoxical as it may sound to car users at first, they may in fact gain from this imposed cost. A rapidly growing population and an ever-increasing number of car users will indirectly cost you in at least three ways: steeper parking rate increases both on campus and throughout the city, longer commute and parking search times (the longer they are, the less time you can devote to work/study/leisure and the more you will spend on gas), and higher taxes for building infrastructure to reduce road and parking congestion (opening up extra lanes of existing roads, building tunnels/bridges to deal with bottlenecks, building underground parking sites). Therefore, car users, paying for a service you might never use (the U-Pass) may actually save you more money on the services you do use.

How would the U-Pass succeed in combating tax hikes, parking rates and commuting time? A heavily subsidized bus pass is likely to induce a sizable fraction of the student population to switch to using transit. A larger transit ridership on routes that are among the most heavily used in the city and are at times close to or at seating capacity will likely mean increased frequency on those routes. More frequent bus service in turn will sway more Reginans, including university students, to switch to transit (which happened at the U of S via the U-Pass, for example) and will also persuade many recent immigrants to continue relying on transit even if they can now afford owning a car. For that higher-ridership-expanded-service effect to work the number of residents who switch simultaneously must be sizable; hence, the need for a large-in-scale program such as the U-Pass. The cities with implemented U-Pass programs have shown a remarkable increase in transit ridership and frequent service to campus, including cities of comparable to Regina’s size such as London, ON; Metro Victoria, BC; and Saskatoon, SK. The alternative – a marginal increase on ridership driven primarily from recent immigrants – just won’t cut it. Consequently, greater transit use in a city can combat tax hikes for roads, slow down parking rate increases and improve commuting times – all of which are significant benefits for car users.

In conclusion, what I am offering is a cost-benefit analysis of both the Yes and No outcomes. Deciding which option benefits students more ultimately depends on your personalized benefits and costs. But, most importantly, the costing of these two options must take into account the context of living in a rapidly growing city that requires transportation solutions – ones that students can contribute to by making an educated choice.

Sincerely,

Dr. Georgi Boichev

 

Dr. Boichev is a Post-Doctoral Fellow in the Department of Economics at the University of Regina. He specializes in the fields of Public Economics, Development Economics, Political Economics and Applied Econometrics.

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2 comments

  1. The economist seems to be under a few misconceptions about U of S. Consequently, the conclusion drawn is also inappropriate.

    1. U of S institutes a parking lottery systems. Only those who are selected to purchase parking passes are able to park on campus. There is no pass overselling, which guarantees that those who hold permits can park. Any student who is not selected in the lottery will never have access to reliable on-campus student parking. In effect, U of S encourages students to select public transit by reducing the absolute supply of parking spaces available to students. U-Pass is correlated to increased usage of public transit in Saskatoon, but it is not necessarily the cause.

    2. U of S’s population is structurally different from UofR, with a larger absolute number of students who did not live in Saskatoon prior to attending university. This means fewer students living at home, in suburban areas. U of S’s student population is concentrated in areas of the city (east of the university in the downtown area, in residence or affordable housing near the school, or in affordable housing to the south). These areas are well served by more reliable bus service, with an improved frequency of busses per day.

    3. Regina’s transit routing is not suited to university students’ needs, with inconsistent service. This is in part due to the reduced student population density discussed above. Subsiding bus access would not have any material effect on routing, unless UofR negotiated better routing as a term in the contract with the city. In the absence of such consideration, it is unlikely that a significant cohort of students would choose the bus even if it was subsidized.

    The U-Pass is an interesting option for the university to consider. However, choosing the U-Pass will not improve bus routing. To my mind it is a specious argument to suggest that most students would choose the U-Pass but for the cost of a bus pass. The reality is that cities such as Regina are not well suited to public transit generally – and even less so for students on sporadic schedules. If I were a current student at UofR I would vote down the U-Pass in order to signal to the city that improvements in bus routing, reliability of service, and frequency of service (i.e. more busses) are necessary before a U-Pass initiative is appropriate.

  2. C Elizabeth (U of S/U of R)

    In response to Alumnus (above):
    Your concluding argument regarding the U of S is, in fact, incorrect.
    Transit service for students in Saskatoon improved AFTER U-Pass implementation in 2008, not before, as you suggest by your assertion that “improvements…reliability of service, frequency of service are necessary before a U-Pass initiative is appropriate.”

    When students flooded the Saskatoon system with ridership in 2008 when they implemented their U-Pass, Saskatoon Transit Services did not have enough buses to keep up with demand, resulting in pass-by’s leaving students waiting at stops while full buses drove by. This resulted in the City being left scrambling to find more buses and alter routes to serve students better (route altering eventually led to the establishment of the U of S as a major transit hub – which GREATLY improved service to students).

    In addition, unlike Saskatoon Transit’s initial U-Pass agreement with the U of S, Regina Transit has already indicated that 9 new trips and up to 5 buses will be added to the system in order to deal with the increased ridership. Regina’s U-Pass is forcing a measure of improvements up front, in conjunction with implementation.

    There are a number of studies on U-Passes across Canada that indicate that cities were able to improve transit services for students after U-Pass implementation and not before. As you may not be aware, municipalities have a very inelastic tax base and increasing infrastructure costs, among other things. Cities often just don’t have the capital to improve transit services before they see ridership improve. Consequently, the U-Pass is, and has always historically been the ‘signal’ to the city that students want improved service.

    If U of R students are serious about improving transit in Regina, and joining Saskatoon and 40 other Canadian cities who have transformed their transit systems in favour of students, they will Vote Yes to the U-Pass.