A blogger named Ganesh Kulkarni discovered that the commuter trains of Mumbai serve six million passengers daily but the system isn’t equipped to check everyone’s ticket. Instead, Kulkarni writes, ticket agents conduct random ticket checks. This has given rise to a form of cheating that is elegantly called “ticketless travel.” Although it’s probably not very common to get busted for traveling ticketlessly, there is a significant fine if you are. And so, Kulkarni writes, one clever traveler has devised an insurance policy to make sure that ticketless travelers who are caught can lay some of the expense.
Here’s how it works. You pay 500 rupees (about $11) to join an organization of fellow ticketless travelers. Then, if you do get caught traveling without a ticket, you pay the fine to the authorities and then turn in your receipt to the ticketless-traveler organization — which refunds you 100% of the fine.
Don’t you wish that everyone in society was as creative as the cheaters?
But, more important: wouldn’t there seem to be a big financial upside in investing in enough ticket-takers to make sure that the train system actually makes everyone pay? If I ran a swift little private-equity firm, I’d think about taking over the Mumbia train system, pronto.
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The GO commuter train service around Toronto works on the same principle: random ticket checks.
Back when I was a student and I rode the train frequently I worked out the numbers. The fine for getting caught was high enough that the expected cost of riding without a ticket was significantly higher than the cost of the tickets themselves. I found I tended to be checked between 1 and 2 times a month on average.
The train service can fix the problem in one of two ways: either increase the number of checks, or increase the fine. Or both, I suppose. That would make the insurance system uneconomical.
The GO commuter train service around Toronto works on the same principle: random ticket checks.
Back when I was a student and I rode the train frequently I worked out the numbers. The fine for getting caught was high enough that the expected cost of riding without a ticket was significantly higher than the cost of the tickets themselves. I found I tended to be checked between 1 and 2 times a month on average.
The train service can fix the problem in one of two ways: either increase the number of checks, or increase the fine. Or both, I suppose. That would make the insurance system uneconomical.
I am from Mumbai and travel by the suburban train occasionally. The odds of a check are 1 in 100 (or still lower) given there are 6 mn passengers. The fine amount is 10 times the value of ticket. Technically, there is every reason for the travelers to cheat. But, my observation is exactly opposite. At busy stations, one can see really long queues to buy tickets, even at the oddest hours like, say 1 am.
Here is my take on this. If one gets caught without ticket, the process of paying fine is not a 2-minute affair. They will take the offender to the nearest office, bunch of folks from enforcement agency will grill the guy for quite some time, which surely amounts to mental harassment. It can be easily an hour long affair. Suddenly, even the 1 in 100 chance sounds scary. All this hassle is just annoyance, when the
ticket costs Rs 8 ($0.20) for a 30 km journey!
I am from Mumbai and travel by the suburban train occasionally. The odds of a check are 1 in 100 (or still lower) given there are 6 mn passengers. The fine amount is 10 times the value of ticket. Technically, there is every reason for the travelers to cheat. But, my observation is exactly opposite. At busy stations, one can see really long queues to buy tickets, even at the oddest hours like, say 1 am.
Here is my take on this. If one gets caught without ticket, the process of paying fine is not a 2-minute affair. They will take the offender to the nearest office, bunch of folks from enforcement agency will grill the guy for quite some time, which surely amounts to mental harassment. It can be easily an hour long affair. Suddenly, even the 1 in 100 chance sounds scary. All this hassle is just annoyance, when the
ticket costs Rs 8 ($0.20) for a 30 km journey!
I don’t think it would be that hard to implement a better way to check tickets – New York City for example has a pretty iron clad system. I can’t imagine getting on a subway there without a valid ticket too often. And there are over 5 Million people who ride that system per day !
I don’t think it would be that hard to implement a better way to check tickets – New York City for example has a pretty iron clad system. I can’t imagine getting on a subway there without a valid ticket too often. And there are over 5 Million people who ride that system per day !
The Light Rail system from Bayonne to Jersey City and Hoboken, NJ works the same way as well. I tracked the frequency of fare collectors on my rides for about six months and discovered:
1. The fines would cost about twice what paying for a ticket would cost.
2. The fare collection was sufficiently random that there didn’t appear to be a time of day that would minimize fines.
If there’s enough arbitrage for this insurance scheme to work, then clearly the train company in Mumbai is leaving money on the table. The solutions are obvious, but their pitfalls may not be:
1. Raise the fines. When the fines are raised enough to make cheating no longer pay, the insurance scheme no longer works.
2. Increase the number of fare collectors/enforcers. Frequency of fines also makes the insurance scheme no longer work, although there is less benefit to the railway company as they have to pay more workers.
Both of these scenarios, however, assume that when you catch a fare evader A) the rider can afford to pay the fine and B) the company can enforce that the rider pays the fine. One or both of these may not be true in a heavily populated and less developed area. The latter probably no longer applies to Mumbai.
The Light Rail system from Bayonne to Jersey City and Hoboken, NJ works the same way as well. I tracked the frequency of fare collectors on my rides for about six months and discovered:
1. The fines would cost about twice what paying for a ticket would cost.
2. The fare collection was sufficiently random that there didn’t appear to be a time of day that would minimize fines.
If there’s enough arbitrage for this insurance scheme to work, then clearly the train company in Mumbai is leaving money on the table. The solutions are obvious, but their pitfalls may not be:
1. Raise the fines. When the fines are raised enough to make cheating no longer pay, the insurance scheme no longer works.
2. Increase the number of fare collectors/enforcers. Frequency of fines also makes the insurance scheme no longer work, although there is less benefit to the railway company as they have to pay more workers.
Both of these scenarios, however, assume that when you catch a fare evader A) the rider can afford to pay the fine and B) the company can enforce that the rider pays the fine. One or both of these may not be true in a heavily populated and less developed area. The latter probably no longer applies to Mumbai.