Rethinking Bengaluru’s Metro Hike Strategy: Affordability versus Financial Viability

There has been a lot of public discourse and broad public criticism of the latest fare adjustments implemented by Bangalore Metro Rail Corporation (BMRCL). BMRCL initially announced a 50% fare hike, resulting in 70–110% station-to-station pricing increases, making it India's most costly metro system. In response to public outcry, BMRCL lowered tariffs by up to 30%, yet commuters still had to pay a 5% net rate increase over the prior prices. The fare hike has made metro travel more expensive, especially for those who rely on buses or autos for last-mile connectivity. However, the functional sustainability of public transport services is also crucial to ensure an adequate supply and maintain the quality of the existing system. While a gradual hike in fares is necessary, the metro should diversify its revenue sources to non-fare revenue expansion. Public transport benefits everyone—not just the people who ride it. It eases traffic, cuts pollution, and boosts the economy. Rather than imposing the entire cost on commuters, it is equitable to distribute the responsibility.

BMRCL justifies the fare hike by pointing to loan repayments (around ₹10,422cr) and rising costs based on the Fare Fixation Committee (FFC) recommendations. While the FFCs can calculate the operational and input costs, there needs to be a wider discourse on maintaining public transport's affordability while ensuring its services' financial sustainability.  

While looking at the affordability of public transportation, one has to look at the cumulative cost of an individual's journey from point A to point B. The cost per trip by an individual is the integrated journey cost cumulated between different modes of transport from Point A to B. In a well-integrated transport system, where mass transit options like metro and sub-urban railway services are linked to other modes of transport, such as feeder buses and autos, to ensure last-mile connectivity, it will be a seamless and less costly affair for an individual. Since many of the Indian cities lag in ensuring integrated public transportation, the cost of using the metro even goes beyond its fare. A month before the metro hikes, the Karnataka government also revised the bus fares with hikes of about 15%, citing the massive operational cost and debt. This will increase the total journey cost, making it unaffordable for many. Especially when two-wheelers are the cheapest means of travel and travel by car is also financially efficient compared to the integrated cost of journey by public transport, the hike disincentivises the commuters from using public transport. This was reflected directly in the drop in daily commuters on the first working day after the Bangalore metro introduced the fare hike. Around 42000 people didn’t take the metro after the hike. But since this is just a day’s data, it is too soon to gauge the actual impact. Long-term trends will allow us to get a clearer picture of the situation. 

Even though Bangalore Metro spans only 76km, the maximum fare now stands at ₹90, making it one of the costliest metro systems in India. Since the hikes, there has been a dip of 4% in ridership with 8.29 lakh passengers, which showcases that the demand is elastic and changes with the price changes. While the hikes might generate extra revenue (approx 14.2%, with ridership of 8.29 lakh passengers and an average fare of ₹54 after the hike), the core objective of a metro system will be defeated by decreasing ridership. While revenue is vital for the sustainable functioning of the service and ensuring quality and quantity in its services,  the primary purpose of a mass transit system is to reduce congestion on the roads and ensure high public transport adoption. Given that the Bangalore metro only covers 76km, even a 4% drop in ridership could have serious negative externalities (unless they opt for other public transport options), such as increased urban congestion, higher fuel consumption and pollution, and decreased economic productivity.  

It is accepted that periodic fare hikes are needed to ensure that the system runs efficiently and remains sustainable in the long run. However, if the metro becomes unaffordable for a large population, it defeats its purpose, and the investment will be wasteful, as public transportation is a positive externality where the beneficiaries include not only its consumers but also private vehicle owners (reduced road congestion) and society at large (cleaner air and increased property values near metro stations). All those who benefit from public transportation, directly or indirectly, can contribute to its revenue.  For instance,  the revenue from congestion pricing on private vehicles and parking fees for public parking spots can be converted to public transportation funds. 

Metro should also actively focus on non-fare revenue expansion through real estate monetisation by leasing commercial spaces inside metro stations and on-station advertisements. Additionally, they can introduce dynamic peak-hour advertising charges, where rates are adjusted according to commuter traffic. Station naming rights can also be introduced, with opportunities for brands to sponsor stations. More than anything, the demand for public transportation needs to be increased. To improve ridership,  Metro needs to incentivise commuters to use the metro through regular users through subscription models and more last-mile connectivity options like feeder buses.  Instead of disincentivising commuters to use public transportation, Bangalore needs policies that support investment in India’s under-supplied public transportation. 

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