Revisiting Multi-Ride and Unlimited Passes
The New York Times recently ran an article entitled “In Decade of Unlimited Rides, Metrocard Has Transformed How The City Travels,” which reflected on the tenth anniversary of the introduction of the 30-day unlimited MetroCard in New York City. Its a pretty interesting read, describing the perceived connection between payment methods on New York’s public transit system and its ridership levels.
What makes it interesting from a personal finance perspective, however, is the graph that accompanied the article, which the Consumerist.com picked up yesterday (”Are Unlimited Ride MetroCards A Good Deal? Not For A Lot Of People Who Use Them“). The graph depicts the distribution of usage for holders of the 30-day MetroCard, with an average usage of around seventy rides a month. In order to break even you need to ride about forty-six times. While it is true that most people are saving considerable money with the unlimited cards, about a good fifteen-twenty percent of them seem to be losing money on the unlimited ride cards.
A Nice Reminder
I recently wrote about the often under-appreciated value of the 10-ride pass. The article serves as a nice reminder to make sure that you are truly saving money with multi-ride and unlimited passes.
It is often too easy to fall victim to the idea of buying in bulk– I know I’m certainly guilty of this. The idea of saving 10-15% off a train or bus ticket makes sense only if you’re going to make full use of what you purchase. Worse, buying a ten-ride or unlimited pass might make induce you to travel more than you otherwise would. The best way to figure out what is right for you seems to be to think carefully about how many trips you’re going to make before you think about which pass to buy, and then buy appropriately.
Not The Whole Picture
Of course, the Consumerist.com entry to which I linked doesn’t provide the entire picture. For one thing, its a questionable choice to refer in the title to “a lot of people” losing money — the graph shows that the vast majority are saving money and making the right choice.
But beyond that, there are certainly other legitimate factors to consider, including any discounts or employer-repayment that might reduce the price of an unlimited ride pass, as well as the convenience of not having to mess with the ticket machines. Most interestingly, I learned from the comments on the Consumerist.com article that the New York MTA automatically insures 14 and 30 day unlimited ride cards when purchased with a credit/debit card, so if you lose an unlimited pass and paid with a credit card, you can get your money back, which certainly seems like a very generous and significant benefit.
All-in-all, though, a nice reminder to carefully consider your needs when making such purchases!
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