"Google Buses Pay $1 per stop, but it costs me $2 to ride MUNI": Logical fallacy explained

By Dan Raile , written on April 16, 2014

From The News Desk

I defy anyone in San Francisco to attend any public event that in any way involves the forthcoming "Google Bus" Pilot Project without hearing at least one reference to the unfairly low fee that Google, et al, will be paying for using Muni bus stops.

The argument is usually framed along the lines of, “Why should it cost me $2 to ride Muni but it only costs Google $1 to stop there?”

I’m here to reassure you that this is one angry rhetorical question with a concrete and clear answer.

When the Pilot was first announced in January, much of the coverage accused Mayor Ed Lee of underselling a public asset, and Google of cynically attempting to buy itself a better public image at a bargain.

But the arrival at a $1 fee per stop had little or nothing to do with the Mayor or the employers who will be required to pay it.

Instead the culprit is California state law, specifically Propositions 218 (passed in 1996) and 26 (2010). Due to these voter initiatives, the MTA is only allowed to recover the cost of the program with the fees it collects.

Thus, the MTA is legally restricted from charging more and using that revenue to backfill the Muni budget, though Pilot Project manager Carli Paine of the MTA told me they’d love to be able to do so.

Interestingly, the $1 per stop figure is also flexible and must be adjusted so that revenues from the program meet the 100% cost recovery target. According to the project’s most recent budget spreadsheet, the rate is currently projected at $1.06 per stop and expected to increase to $1.10 per stop after the first 12 months of the program.

Overall costs for the 18 month Pilot are projected at $1,725,051. The costs are split pretty evenly between labor and non-labor costs. The bulk of the latter is for the placement of data collection devices on each shuttle and transmitting that data, set at $60 per each of 375 vehicles per month.

The $1.06 fee per stop, multiplied by 4,121 stops per day, for 260 weekdays in a year, is projected to meet the costs of the program without exceeding them, as the law requires.

The MTA has its hands bound by law, but there are some possible remedies available to those who continue to see this as a gross devaluation of a public asset.

Activists could attempt to initiate a ballot measure to pave the way for a special tax on shuttle operations. If such a measure passed, it would still need to pass in the state legislature. If these tax revenues were to be remitted directly to the MTA, any legislation would have to clear a two-thirds majority in both chambers of the California legislature. Alternatively, the tax revenues could go into the San Francisco general fund, and this would only require a simple majority in the legislature.

There is also a possibility for a nexus study of the impact of the shuttle program, which could assign additional fees to go to the MTA. Nexus studies are legally fraught and constrained, and it’s unclear who could initiate such a study, but this alternative would skirt the need for legislation.

Oh, and the companies involved could voluntarily agree to pay higher fees, which could be routed to the MTA and Muni. Enjoy your guffaw.

For the activist set who oppose the shuttles on principle, actions such as these may prove more productive than the imminent lawsuits which will seek to stop the program from going into effect, thereby allowing the shuttle operations to continue in their current, unregulated fashion.

[image adapted from wikimedia by Brad Jonas for Pando]