Public transport fares are set to rise from July 1. The price of a monthly pass will rise by 5%. Single bus fares, which are rounded to the nearest half shekel, will rise by more, from NIS 5.5 to NIS 6. Light rail fares will rise to NIS 8.
Why are fares rising now?
Public transport fares are tied to input prices, of fuel, wages, and insurance. Once a year, in July, fares are revised by a committee consisting of representatives of the Ministry of Finance and the Ministry of Transport.
In addition, the rise in light rail fares is connected to a move made a year ago to halt the rise in public transport fares. Minister of Transport Miri Regev and Minister of Finance Bezalel Smotrich decided to subsidize the rise by 12%. One of the budgetary sources for that subsidy was a rise in light rail fares, which will come into force on July 1.
Why isn’t the state subsidizing this year’s rise?
This is a good question, since the state prevented fuel prices from rising for many months by cutting the fuel excise. The Ministry of Transport has stated that Regev will discuss the matter with Smotrich, but it seems that their ministries have no budgetary sources for subsidizing the fare rise.
Are fares in Israel high?
Public transport in Israel is 85% subsidized, which is much more than in other OECD countries, where public transport is more expensive. It should be mentioned, however, that in those countries the service provided tends to be better, transport infrastructure is more developed, and governments directly subsidize population groups that are not subsidized in Israel.
How far does price affect the decision whether or not to use public transport?
Surveys and studies by the Ministry of Transport present a similar picture to that arising from global studies on this question. Price, certainly when it’s a matter of half a shekel here or there, will not affect a person’s decision whether or not to abandon their private car and use public transport. Reliability and speed are the decisive factors.
This means that to induce people to switch from their cars to buses, for example, the buses need to be more frequent, and have exclusive lanes set aside for them, so that travel times will be consistent, while life is made more difficult for private car users through parking policy and taxation. In Israel, the reliability of public transport is actually eroding rather than improving, and the budget for additional bus services has been frozen, because it is conditional on a law for the introduction of congestion charges, which Regev opposes.
How come there’s a rise? Just three months ago, the minister of transport announced a fares reform.
Last March, the "Transport Justice" reform, costing NIS 300 million annually, came into effect. The reform increased the discounts for various groups - for those living in outlying areas, for young people aged 18-26, and for demobilized soldiers, who travel free. This reform came into effect just two years after the last fares reform under the previous government, which was called "Equal Way", and which Regev opposed. That reform "swallowed" the rise that was due to apply to public transport fares, whereas the current reform, which deepens government subsidies, does not prevent fares form rising.
Published by Globes, Israel business news - en.globes.co.il - on June 24, 2024.
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