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How To Hack Subway Fares Using Fare Arbitrage

Unknown Lamer posted about 8 months ago | from the saving-pennies-the-hard-way dept.

Math 240

KentuckyFC writes "Arbitrage is a way of making profit by exploiting price differences for the same asset. In capital markets, traders aggressively seek out and exploit these market 'inefficiencies.' Now one data scientist says it's possible to do the same with metro fares and has studied the fare-arbitrage potential of San Francisco's subway system, BART (Bay Area Rapid Transit). The idea is to swap tickets with another commuter during your journey to reduce the amount you both pay. BART has 44 stations which allows 946 different journeys and 446,985 unique pairs of trips. Of these, over 60,000 have arbitrage potential and commuters can save at least $1 on 4,666 of them. But there are good reasons why cities might want to maintain price differences for certain journeys — to encourage people to live in certain areas, for example. What's more, it's possible to imagine a pair of commuters who each travel from one side of a city to the other at considerable cost. But by swapping tickets in the city center, they could both pay for a short commute in each others' suburbs. But is that fair to other commuters?"

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Might work if there is no Beta (-1)

Anonymous Coward | about 8 months ago | (#46215851)

Otherwise people will have to slashcot the metro and join soylentnews.

Aren't those things considered nontransferable? (5, Informative)

mark-t (151149) | about 8 months ago | (#46215853)

Where I live, if you get caught selling or giving away a bus ticket to somebody else after using it, you can get dinged with a rather heavy fine.

Re:Aren't those things considered nontransferable? (2)

davester666 (731373) | about 8 months ago | (#46215887)

everybody knows hacking is illegal.

Re:Aren't those things considered nontransferable? (1)

bickerdyke (670000) | about 8 months ago | (#46216005)

But is this more ore less hacking that other arbitrage transactions that are mentioned in the summary? THAt should be considered "hacking", too and subsequently declared illegal, too.

Re:Aren't those things considered nontransferable? (-1)

Anonymous Coward | about 8 months ago | (#46215919)

Bay Area scientists think they're bigger than God and mortal rules don't apply to them.

Re:Aren't those things considered nontransferable? (-1)

Anonymous Coward | about 8 months ago | (#46215931)

Cause they are beta fuckers

Re:Aren't those things considered nontransferable? (4, Insightful)

ILongForDarkness (1134931) | about 8 months ago | (#46216445)

Even if you didn't unless things always exactly lined up you'd end up waiting for the next train. I'm sorry even 5 min of my time is worth more than $1 to me.

Go for it (3, Interesting)

Karmashock (2415832) | about 8 months ago | (#46215855)

Doesn't really sound worth the effort.

And of course... screw the beta.

Re:Go for it (-1)

Anonymous Coward | about 8 months ago | (#46215883)

Screws for the beta!

Re:Go for it (2)

DarkVader (121278) | about 8 months ago | (#46216749)

What if there were an app for that, to arrange easy swaps? It sounds like a daily commuter could save hundreds of dollars a year.

And yes, screw the beta.

Re:Go for it (1)

Karmashock (2415832) | about 8 months ago | (#46216785)

I wouldn't really care... and neither should the city or anyone else.

Its marginal.

SF is easier to hack than that (-1, Troll)

phmadore (1391487) | about 8 months ago | (#46215861)

If you're in SF and just trying to go somewhere else in SF, just do what everyone else does and either hop a bus and don't pay the fare or hop the turnstyles and don't pay the fare. If you're trying to go across the bay to Oakland, be more careful, but still, if you don't want to pay, just don't. When I was living there in 2012, this worked 100% of the time that I couldn't afford a trip or didn't feel like paying. The buses are the easiest because you can board on the back. And another thing that's supposed to be happening is a tiered pricing system. But anyway, you don't have to go to much trouble to get around free/cheap in SF, but it seems like it would have been a fun study to conduct.

Re:SF is easier to hack than that (4, Interesting)

WarJolt (990309) | about 8 months ago | (#46215941)

If you're in SF and just trying to go somewhere else in SF, just do what everyone else does and either hop a bus and don't pay the fare or hop the turnstyles and don't pay the fare. If you're trying to go across the bay to Oakland, be more careful, but still, if you don't want to pay, just don't. When I was living there in 2012, this worked 100% of the time that I couldn't afford a trip or didn't feel like paying. The buses are the easiest because you can board on the back. And another thing that's supposed to be happening is a tiered pricing system. But anyway, you don't have to go to much trouble to get around free/cheap in SF, but it seems like it would have been a fun study to conduct.

I bet you like the smell of your own farts too. You do realize how unethical that is right?

Re:SF is easier to hack than that (-1, Troll)

phmadore (1391487) | about 8 months ago | (#46215971)

I don't particularly give a fuck how unethical it is.

Listen, go down to ... I think it's Montgomery, near the 7-11 that's near the Ritz, and watch that bus stop. Watch just how many people actually pay the fare. Then fuck yourself.

Re:SF is easier to hack than that (5, Insightful)

N1AK (864906) | about 8 months ago | (#46216089)

I don't particularly give a fuck how unethical it is.

Of course you don't, but we already knew that 'cause you're a self-declared freeloading cunt.

Re:SF is easier to hack than that (-1, Troll)

phmadore (1391487) | about 8 months ago | (#46216145)

Exactly.

Re:SF is easier to hack than that (-1, Offtopic)

mrvan (973822) | about 8 months ago | (#46216091)

Listen, go down to ... I think it's Montgomery, near the 7-11 that's near the Ritz, and watch that bus stop. Watch just how many people actually pay the fare. Then fuck beta.

FTFY

Re:SF is easier to hack than that (0)

phmadore (1391487) | about 8 months ago | (#46216191)

lol.

Beta doesn't bother me, though. I'm more interested than the stories than I am the format. As long as they let us comment, I wouldn't even care if they installed that Disqus bullshit.

Re:SF is easier to hack than that (5, Insightful)

deroby (568773) | about 8 months ago | (#46216101)

It's ironic how you blatantly state the above but put the following on your homepage:

(emphasis mine)

"I don’t think I want to be in the western world when it collapses. I think we are such a violent bunch that even I might not survive, and I’ve spent years homeless, did time in Iraq, and so forth. I still don’t have faith I’d be able to guide my family through the chaos of a societal meltdown in a culture which is so coddled and takes so much for granted. I think we need to GTFO here and definitely within the next ten years."

If only 'the other people' were a more ethical bunch eh?

Re:SF is easier to hack than that (-1, Troll)

phmadore (1391487) | about 8 months ago | (#46216183)

I see nothing unethical about it, is the problem. Here's the point: when I could pay, I did; when I couldn't, I didn't let that stop me from getting where I was going. I assure you the system would take in a lot more money if it made room for situations like mine at that time. If they'd have accepted $1.00 when that was all I had, they'd have gotten my dollar instead of nothing. Ironically, on the Oakland side of the bay, many bus drivers would accept less, depending on the time of day. Now and then they'd tell you to wait until the next time they came through for this or that reason, but they'd still get you where you were going. In SF, most buses are crowded most of the time, so asking would have been a waste of time for all parties involved.

I remember one time I jumped the Fruitvale BART turnstyle right in front of a cop, made eye contact, and kept walking. He didn't feel I was unethical enough to write a ticket.

More ironically, this conversation reminds me that I do, in fact, have an outstanding ticket from the metro train in SF. And even more ironic is the fact that that particular morning I had legitimately lost my ticket. I was living in a VA halfway house, taking it fully for granted, and the weekly pass they gave me turned out to be in my backpack later on when I had a free minute to look at it. The problem with that halfway house program was that it filled my days with so many appointments and bullshit that I couldn't make the time to do what I really needed to do, which was find a job.

Here's another thing I want to say: I see no reason to follow Ghandi's advice at this point in history. Being the change I want to see in the world would require me to, once again, give up everything I own and occupy a public space and spend 24 hours a day protesting things I don't want to see anymore of in this country, such as unwarranted/ineffective NSA surveillance, artificially depressed wages as a product of political footballing, or half-assed socialist programmes with no scientifically veritable benefit, such as the food stamp program, which actually benefits corporations like Wal*Mart far more than it does the people who are entitled to it.

I can't afford to give up everything I own again. I don't believe that you or anyone else reading this thread has ever done that, not for this country and not for your stated ideals.

Why can't I afford it? Because five days ago my first son was born, and in the last 10 months I've made a radical transition from a travelling crackpot radical to a working-class citizen. His life is far more important than my ideals. I don't want him to ever struggle as I have struggled, and I don't want him to have as cynical a view of the world as I do. This transition isn't something I would've done otherwise. Otherwise I'd still be out there somewhere, in the woods most likely, waiting for the inevitable collapse-via-inertia of a society which did not adhere to its principles.

Judge not lest ye be judged, sir.

Re:SF is easier to hack than that (3, Funny)

Anonymous Coward | about 8 months ago | (#46216277)

Ooh, a thief with a back story. How original.

Re:SF is easier to hack than that (0)

Anonymous Coward | about 8 months ago | (#46216281)

I remember one time I jumped the Fruitvale BART turnstyle right in front of a cop, made eye contact, and kept walking. He didn't feel I was unethical enough to write a ticket.

It may not have been his job. Not all police do the same job, anymore than people in any other profession.

Re:SF is easier to hack than that (0)

phmadore (1391487) | about 8 months ago | (#46216349)

Wrong. The BART has its own police force, unless I'm wrong. But I'm not. [bart.gov]

Re:SF is easier to hack than that (-1)

Anonymous Coward | about 8 months ago | (#46216481)

Wrong. The BART has its own police force, unless I'm wrong. But I'm not. [bart.gov]

You've got quite the self-righteous attitude going on. In your first message, you just said "a cop". Perhaps you mean an officer of the BART Police Department in charge of ticketing toll jumpers, or perhaps you meant an off-duty Oakland police officer coming home from traffic duty. Don't blame us for information you don't include.

Re:SF is easier to hack than that (2)

deroby (568773) | about 8 months ago | (#46216465)

For starters : congratulations on your son. I "admit" I never 'gave up everything' for whatever reason but I do know the impact of having children on one's life and point of view. Welcome.

Secondly, I'm not here to judge but merely to point out you were literally suggesting people should not pay for transport in SF if they don't feel like it; all the while complaining on your website that the current generation is one that simply takes things for granted as if they are entitled to whatever they want.

An inefficient exchange (5, Insightful)

wilson_c (322811) | about 8 months ago | (#46215893)

Though these arbitrage opportunities may exist, the act of exchange would render them worthless. Even with a hypothetically perfect market established, the amount of effort required by two parties to submit ticket info, match needs, and go through an exchange outweighs the efficiencies gained by the transaction.

An App for that (1)

Anubis350 (772791) | about 8 months ago | (#46215903)

I feel like there could be designed an app for a lot of that that would automate it easily, maybe even integrate with something like hopstop

Re:An inefficient exchange (1)

phantomfive (622387) | about 8 months ago | (#46215907)

What is needed is an app to make the process efficient.

Re:An inefficient exchange (-1, Flamebait)

mrvan (973822) | about 8 months ago | (#46216095)

What is needed is an app to make beta bearable.

FTFY!

Re:An inefficient exchange (1)

Will.Woodhull (1038600) | about 8 months ago | (#46215953)

...the amount of effort required ... outweighs the efficiencies gained....

True on a one-shot basis, but if two commuters agree to do this every day five days a week so long as their jobs last, then the setup cost is insignificant. There would be significant long term gains.

Re:An inefficient exchange (2)

CastrTroy (595695) | about 8 months ago | (#46216413)

I imagine that this wouldn't be possible for monthly passes but only if you pay for individual rides. Usually there's a decent savings if you buy the monthly pass. This would probably negate any savings from this method. If you ask me, this fare system is too complicated. Where I live you pay, and get to go as far as you can get in 1.5 hours. Which is enough to get from one end of the city to the other. Or if your only going for a short shopping trip, you can often go both ways on one ticket. The only thing I would like them to change is to make shorter, one way trips cheaper, possibly by scanning your pass as you leave the bus.

Re:An inefficient exchange (1)

WarJolt (990309) | about 8 months ago | (#46215955)

Though these arbitrage opportunities may exist, the act of exchange would render them worthless. Even with a hypothetically perfect market established, the amount of effort required by two parties to submit ticket info, match needs, and go through an exchange outweighs the efficiencies gained by the transaction.

A mobile app and some clever marketing goes a long way. GPS would make this easy.

Re:An inefficient exchange (2)

swb (14022) | about 8 months ago | (#46216487)

Even with an app, would you bother for just a dollar?

It sounds like meeting up with someone on the train every day to swap tickets sounds like one more thing to deal with in a world of too many one more things to deal with.

Ticket use rules (2)

jklovanc (1603149) | about 8 months ago | (#46215911)

From the Bart website [bart.gov] ;

When you enter BART, insert your ticket into the fare gate and it will be returned to you. Use the same ticket when you exit

By using one ticket when you enter and another when you exit you are breaking the rules.

Re:Ticket use rules (0)

Anonymous Coward | about 8 months ago | (#46215945)

Can you find a less ambiguous rule? "Use the same ticket when you exit" reads more like a helpful reminder than a rule.

I haven't found anything on the website that explicitly states that BART tickets are nontransferable, but I fully expect some rules are printed on the tickets themselves.

Re:Ticket use rules (0)

Anonymous Coward | about 8 months ago | (#46215965)

Re:Ticket use rules (1)

WarJolt (990309) | about 8 months ago | (#46215995)

Can't get any clearer than that. They could use some form of biometrics to enforce this.

Re:Ticket use rules (2)

gl4ss (559668) | about 8 months ago | (#46216335)

the way hong kong does it is simple.

the card is so useful as general contact free payment card that you load up money on it and aren't going to take chances trading it with some random bozos.

Re:Ticket use rules (0)

Anonymous Coward | about 8 months ago | (#46216509)

Don't know how it works in the states, but in the UK there're Conditions of Carriage (essentially terms and conditions). The back of the tickets refer you to them.

In there it's explicitly stated that tickets can not be transferred to another person (page 7, section 6) [nationalrail.co.uk]

Breaking those rules mean the ticket(s) and invalidated and thus both commuters would effectively be travelling without a ticket.

That condition dates back to the Victorian era when railways first started and some people tried doing exactly this sort of thing until the companies banned it. I'd be very surprised if BART and others don't have almost identical conditions.

Re:Ticket use rules (1)

smallfries (601545) | about 8 months ago | (#46216057)

It seems quite obvious from the summary that what they propose is not arbitrage - it is fraud. It's caught by the rule that you state, but more generally they are using a single ticket to make two journeys. In the case of the two hypothetical commuters crossing the city they are both paying for 1/2 journey and then it is being made twice. That is not a price difference between two assets, it is double-spending.

Re:Ticket use rules (2)

pla (258480) | about 8 months ago | (#46216431)

By using one ticket when you enter and another when you exit you are breaking the rules.

Right of first sale. I can do whatever the hell I want with my little slip of paper (or do they use cards there now?), and to hell with their "rules".


More to the point, FTS: "But by swapping tickets in the city center, they could both pay for a short commute in each others' suburbs. But is that fair to other commuters?"

Fair? How does it count as in any way unfair? You have stops A, M, and Z, with M at the city center and A,Z two outlying suburbs. If they consider it just peachy that I can ride A-M-A or Z-M-Z all day every day for $5/trip, it costs the system not a penny more to take A-M-Z and Z-M-A, yet they think they can charge more to do it? The same trains/buses carry the same number of passengers the same distance. Fuck that.

And as for TFS's speculation that they implement differential pricing as a form of zoning / social policy - Geographic discriminatory pricing still discriminates [wyso.org] . "Golly, we had no idea that higher fares to more distant (and purely coincidentally whiter) suburbs discourage poor black people from leaving their inner-city slums!". That pig just don't fly.

Re:Ticket use rules (0)

Anonymous Coward | about 8 months ago | (#46216489)

Right of first sale applies to distribution of copyrighted products.

Sure you can sell/pass on the ticket (paper) itself (let's call that the copyrighted work), but the right to travel itself (represented by the ticket) is non-transferable.

Re:Ticket use rules (1)

squiggleslash (241428) | about 8 months ago | (#46216561)

Right of first sale. I can do whatever the hell I want with my little slip of paper (or do they use cards there now?), and to hell with their "rules".

This is not a copyright dispute. This is about using someone else's resources (albeit the taxpayer's) according to the rules they set out.

How stupid (2, Interesting)

Anonymous Coward | about 8 months ago | (#46215933)

This is about as juvenile as it gets. All of you know very well that transit systems are a public service that barely can sustain themselves. So, you think then that it's a great idea to work out a way to drain revenue? This is from the thought process of a child, not a mature adult. Adding further to the stupidity of this is that it doesn't take a rocket scientist to figure this out. It's not like it was some grand secret being hidden by the Gods of Transit, so from an innovative science standpoint, it's a big fat fail.

Re: How stupid (1)

Carl Carmoney (3403699) | about 8 months ago | (#46215981)

Yeah, and you're saving a buck or two. Call me when I'm saving thousands or millions of dollars. IANAFA, but the savings only work well at large volumes of tickets (as a commodity) per transaction. The scale here is just too small.

Re:How stupid (1)

Calinous (985536) | about 8 months ago | (#46216045)

Public transit systems are (usually) heavily subsidized. I remember the city of Tallinn (I think) introduced free public transportation, as the city did pay 75% of the real cost of the tickets anyway.

Re:How stupid (0)

Anonymous Coward | about 8 months ago | (#46216249)

In Finland and Sweden (well, the capitols anyway) there are groups that lobby for completely free public transportation and cite Mariehamn, the only city on the Åland islands as a working example since transportation there is 100 % subsidized. Now, the practical action the groups provide is "penalty fare insurance", which is exactly what you think it is - you pay a small amount into an insurance pool and never buy tickets and if you happen to get a penalty fare, the pool pays the fine for you. Personally, I think 100 % subsidized public transportation is an idea worth trying. There would be cost savings when no ticket system (or inspectors) are needed and motorists would also get a benefit with less congestion (and deservedly so since it's their taxes too that go into the subsidy).

In large cities like the case is in this article, the situation is of course different since based on my personal experience, at least, you really don't have any other practical choice. Astronomical parking fees, terrible congestion and relatively long distances make a large and dense subway network the best mode of transportation in almost every aspect. IMO the speed beats the higher comfort level of a cab any time. To my great surprise there are, however, cities in which the subway costs more than taking a cab (in Seoul for instance, a cab ride distance equivalent to 2-3 stations costs less).

Re:How stupid (1)

phmadore (1391487) | about 8 months ago | (#46216403)

Many downtown centers in parts of America such as Denver, Boulder, and even downtown Oakland, CA, have free buses for busy shopping districts which are given all the same rights as public transit even when they are privately owned. These buses are expressly for the purpose of giving those who can afford to shop an easier time in so doing.

Re:How stupid (1)

Lehk228 (705449) | about 8 months ago | (#46216869)

private shuttles alleviate just as much congestion as public transportation, it is reasonable to allow them to use bus lanes, as long as the bus lanes are not overwhelmed by doing so

Re:How stupid (1)

CRCulver (715279) | about 8 months ago | (#46216499)

There would be cost savings when no ticket system (or inspectors) are needed.

Even in Tallinn, there are still tickets and inspectors. While public transportation has been made free for residents, the city wishes to make money from the hordes of tourists, and they are obliged to pay to use the system. I am sure that Helsinki would do the same if it moved to partially-free public transportation (there are already different fare levels for residents and non-residents).

Re:How stupid (1)

TheLink (130905) | about 8 months ago | (#46216291)

Most shopping malls and commercial buildings don't charge you to use their elevators and escalators. They make their $$$$ elsewhere.

So I'm thinking that at least in some places public transportation should be free, and there shouldn't be an assumption that users have to be charged for it.

It actually costs a fair bit of money and other resources to charge. Imagine if a subway system didn't need ticket booths, turnstiles, etc and people to check that people pay. So how much more would it cost to run it for "free" if you can phase out all of that? How much more subsidy would you need? Or would it even turn out to be cheaper?

Maybe that's not viable for poor places. But I'm thinking richer cities and countries should be make enough money from other things- like land taxes.

Re:How stupid (1)

DarkOx (621550) | about 8 months ago | (#46216621)

I think the transit systems ought to charge a fare that correctly reflects the incremental cost of transporting a passenger down a given transport lane. There should be no arbitrage opportunity.

A fee structure that enables this sort of arbitrage in the first place was the childish thing. Adults don't deny reality, and deal with facts. The fact is humans optimize activities around whatever resource they perceive to be the most scarce in the very short term, for a largish number of public transport riders that is going to be the cash they have in their wallet. If they can save a buck the will.

Fraud (2)

burisch_research (1095299) | about 8 months ago | (#46215947)

This is, simply, fraud. It's the same as snatching a purse or looting a shop.

Petty theft (0)

Anonymous Coward | about 8 months ago | (#46215989)

Ticket sharing was the subject of an episode of the Big Bang Theory less than two weeks ago. The guys decided not to be badasses.

Re:Fraud (0)

Anonymous Coward | about 8 months ago | (#46216009)

It might be, but it's a very strong accusation to be using without citing evidence (i.e. legislation, or binding terms of service, etc.).

Most likely, it's not. In most systems that I've studied, the ticket you physically possess, if any, is your entitlement (authenticator, if you like), and there is - legally speaking - nothing else to it. Thus if you come into possession of a valid ticket, no matter how, you simply have that entitlement for as long as the ticket remains a valid ticket.

This is a sensible way to run things, too, as it's the best balance between collection revenue and enforcement costs - it's practically unenforceable to forbid fare exchange (with physical tokens), no matter what technicalities one might like to introduce.

In any case, unless you have an extremely unusual legislature, it is not, in any way, "the same as snatching a purse or looting a shop." - it will be completely different. Sort of like how downloading is not, ever, "the same as stealing". It's simply not, as a matter of legal fact.

Even morally, there is room for plenty of opinions. After all, why should you be charged more for the exact same public service based on incidental factors such as e.g. where you live? There are robust fare models they can use to prevent this abuse, if they choose, but they apparently want to gamble fare maximization against ancillary political agendas. But I'm not - morally - required to assist them in this objective, I'm only morally required to fairly reimburse them for the (portion of the aggregate) cost of the transport and anything else that I agree with (for example, I might agree that subsidizing improved late-night security is a good thing - but if not, I'm morally justified in withholding this cost if there are legal methods of doing so).

Re:Fraud (1)

N1AK (864906) | about 8 months ago | (#46216123)

but if not, I'm morally justified in withholding this cost if there are legal methods of doing so).

I think it's an incredibly safe bet that swapping tickets isn't legal, though it's likely a civil offence not a criminal one. Thus if the legality of the action is part of your ethical decision then almost the entirety of the rest of your post is redundant.

There are two ways this kind of abuse can work: 1/ First is buying a ticket from A-B when you want to go A-Z, then swapping it with someone who bought ticket from Y-Z who wants to go Y-B in which case you bought the right to travel one journey and then took another. The idea that holding the 'token' somehow makes it legal is nonsense as if that was true the company could sell you the token and refuse to let you on the tube as you got the 'token' that you bought. 2/ That you have some form of cards, like Oyster in London, that deducts balance based on the journey. In this case the terms of the card and travel will be clear that you must swipe at your entry and exit points and thus, again, swapping cards would be a civil offence (if their isn't a local law specifically making it a criminal offence).

Re:Fraud (0)

Anonymous Coward | about 8 months ago | (#46216693)

BART Tickets hold two pieces of information: a positive balance (from when you bought / reloaded the ticket) and (once you enter the station) a starting point and time.
Fare is calculated when you exit, based on the starting point and the exit point. That amount is then debited from the ticket.

You never buy a ticket from one point to another. The price of the trip is calculated at the end, not at the time the ticket is purchased.

This works like #2 in your list.

Re:Fraud (2)

WWJohnBrowningDo (2792397) | about 8 months ago | (#46216135)

Each passenger must have a valid ticket. [professionalfutzer.com]
The same ticket must be used for Entry and Exit.

The moment you exchange your ticket with someone else you are no longer in possession of a valid ticket and thus broke the law, specifically Section 640 (c) (1) and (2) of the California Penal Code [ca.gov] :

(1) Evasion of the payment of a fare of the system. For purposes of this section, fare evasion includes entering an enclosed area of a public transit facility beyond posted signs prohibiting entrance without obtaining valid fare, in addition to entering a transit vehicle without valid fare.
(2) Misuse of a transfer, pass, ticket, or token with the intent to evade the payment of a fare.

Just curious, have you ever taken public transit? Because every single public transit system that I've used had some variation of "fare is non-transferable" printed on the back of the ticket. Government bureaucrats might not be efficient but they're not stupid, you know.

Playing Devil's Advocate (0)

Anonymous Coward | about 8 months ago | (#46216847)

The section you quoted does not define what a valid fare actually is, nor does it grant the fine print on the ticket any sort of binding legal power.

Re:Fraud (3, Insightful)

wonkey_monkey (2592601) | about 8 months ago | (#46216263)

This is, simply, fraud. It's the same as snatching a purse or looting a shop.

Except, of course, that neither of those are fraud.

Unless you just meant because they're all illegal, in which case it's also the same as murder.

Re:Fraud (1)

burisch_research (1095299) | about 8 months ago | (#46216387)

Oops, correct, neither of those are fraud. But all are stealing, whether that is illegal or not.

Re:Fraud (0)

Anonymous Coward | about 8 months ago | (#46216861)

While I agree that both actions are illegal, I do not agree that misuse of a transit pass is the same thing as stealing. This is the same sort of logic that the copyright industry uses to claim that using pirated music or software is the same thing as going into a record store or business and stealing a CD.

They shall not pass! (0)

Anonymous Coward | about 8 months ago | (#46215961)

Tickets are a dumb idea for mass transit. Most of Europe sells (bi)weekly or monthly passes at a fixed price. For example, here in Budapest, Hungary, Central Europe I can buy a monthly pass for ~ 46 usd / 34 euros, which allows unlimited use day and night in an area of about 525 sq. km / 203 sq mileson buses, ETBs, trams, trains and subway. Of course passes come with photo ID, so arbitrage is not possible if there is enforcement at the ingress / egress. (Which is strictly true for the underground railway, but less so for the surface transit.)

The idea behind this is? No-brainer mass transit use probably makes people use cars less often (if they have any, which is not a given in Europe) or think less about getting a car if they do not own one. One part is the green benefit or cutting pollution and the other part is the saving in oil imports, almost all coming from the russkies, so the various small european countries do not have to get on all-four to please Tovaris Putin of the ex-KGB fame.

Re:They shall not pass! (1)

Calinous (985536) | about 8 months ago | (#46216047)

Not to mention parking spaces, which usually are at a premium in cities

Major flaw in assumption: This ain't arbitrage! (2)

SplatMan_DK (1035528) | about 8 months ago | (#46215991)

The major flaw in this assumption is the simple fact that swapping tickets in order to cheat the system and use cheaper tickets is not "arbitrage" nor is it "exploiting price differences for the same asset".

The tickets ("assets") are obviously not the same when you switch them, and get away with using other tickets than you really should have.

- Jesper

Re:Major flaw in assumption: This ain't arbitrage! (0)

Anonymous Coward | about 8 months ago | (#46216365)

Train companies in the UK do something similar. If you go through London at peak-time (8am - 10am) or (5pm and 7pm), then there is higher ticket price than at other times (x1.5 to x2) . But This applies to any journey starting at these times, not necessarily in London. So you could split your journey into separate ticket segments (8am Liverpool to Oxford) (12pm to 2pm Oxford to London), and avoid this "surcharge".

US Airline companies were doing the same. Take a flight between two major cities, and the price was higher than it would be if it were a three hop flight from two smaller towns. All because they thought the corporate types could afford to pay more than family visiting relatives.

Re:Major flaw in assumption: This ain't arbitrage! (1)

grahamm (8844) | about 8 months ago | (#46216651)

Train companies in the UK do something similar. If you go through London at peak-time (8am - 10am) or (5pm and 7pm), then there is higher ticket price than at other times (x1.5 to x2) . But This applies to any journey starting at these times, not necessarily in London. So you could split your journey into separate ticket segments (8am Liverpool to Oxford) (12pm to 2pm Oxford to London), and avoid this "surcharge".

One difference is that in the UK splitting/combining railway tickets is explicitly allowed by the rules National Conditions of Carriage [nationalrail.co.uk] . Though tickets are non-transferrable.

Re:Major flaw in assumption: This ain't arbitrage! (0)

Anonymous Coward | about 8 months ago | (#46216371)

The major flaw in this assumption is the simple fact that swapping tickets in order to cheat the system and use cheaper tickets is not "arbitrage" nor is it "exploiting price differences for the same asset".

The tickets ("assets") are obviously not the same when you switch them, and get away with using other tickets than you really should have.

- Jesper

Very true. Seems more like a flaw in the system that is being exploited.

Of course, the greater flaw is being worried about any of this being "fair" for any consumer, whether they are benefiting or not. NOTHING about fare or toll rates is fair. If you think it is, then ask for a detailed fare/toll revenue report and see how much profit they bring in from that.

Re:Major flaw in assumption: This ain't arbitrage! (2)

testuser42 (3464353) | about 8 months ago | (#46216609)

Here's a more palatable variation, if you can accept these premises:
- a "fraction of a ticket" is a valid asset for the purposes of trading
- my ticket from A->B->C contains a "B->C" fraction if I've ridden one stop and am currently at B

Motivation:
- Short subway trips are overpriced due to minimum prices
- Trips of 2 or more stops are fairly priced
- You want to travel 3 stops, A -> B -> C -> D
- I want to travel 1 stop, B -> C

Default procedure:
- You buy a ABCD ticket (standard price per distance)
- I buy a BC ticket (ripoff)
- We have paid for a total of 4 stops, or distance=AB+BC*2+CD
- We have paid about standard_rate*3 + ripoff_rate*1

Arbitrage procedure:
- You buy a ABC ticket
- I buy a BCD ticket
- We trade at station B or C
- We have STILL paid for a total of 4 stops, or distance=AB+BC*2+CD
- We have paid about standard_rate*4 and saved money WITHOUT traveling for more than we paid for.

This is not new / potential scam (3, Interesting)

ruir (2709173) | about 8 months ago | (#46216019)

Decades ago, the employees of our national highways that collect tools used this very same scheme of swapping tickets to defraud their own employer in millions. The scheme went that if you were paying not by credit card, but in cash, and coming say, from a city 300km away, they would swap your ticket with a city 10km away, and would pocket the diference. Colleagues on another posts in nearby cities would swap tickets already pre-validated for that effect. From the little we could heard about it at the time, this scheme went on for almost a year, until they got more greedy and careless and got caught.

Re:This is not new / potential scam (1)

ruir (2709173) | about 8 months ago | (#46216023)

sorry, tolls, not tools.

Stealing (0)

Anonymous Coward | about 8 months ago | (#46216063)

Why not share links to online screeners of new movies, slashdot? Might be the only way to resist the slascot, your'e beta fiasco.

Re:Stealing (0)

Anonymous Coward | about 8 months ago | (#46216105)

Online screeners aren't stealing, they're film arbitrage, duh.

Reminds me of the "split tickets" system in the UK (3, Interesting)

GauteL (29207) | about 8 months ago | (#46216069)

Go from Swindon to London at peak hours costs an extortionate £60.50.

Book the ticket from Swindon to Reading and then Reading to London Paddington costs £34 + £22.20 = £56.20, saving you £4.30.

The train from Swindon to London always stops at Reading anyway and you will spend your journey in the exact same train taking the exact same amount of time and you will stand just as uncomfortably for your slightly less extortionate fee. And as opposed to swapping tickets with someone, this is perfectly legit and not against the terms of service.

There may have been some original sensible reason, but it sure feels like a scam to me.

Also, some airliners (KLM, I'm looking at you), charge you MORE for a single flight than they do for a return flight. When I moved country (and consequently only wanted to book a single), I had to book a return ticket which I simply didn't turn up for, otherwise it would have cost me £500 more. There may be some logic in what KLM is doing, but it feels like a big "fuck you" to me.

Re:Reminds me of the "split tickets" system in the (2)

N1AK (864906) | about 8 months ago | (#46216129)

There may have been some original sensible reason, but it sure feels like a scam to me.

Generally because train companies charge prices based on line demand etc but can only charge one rate across the whole journey. In your case the Reading-London section has a higher rate because it's more heavily in demand so if the ticket includes that section then will be charged at that higher rate. As Swindon-Reading is lower rate you can buy a ticket for that section for less as a separate ticket. Bizarrely I'm pretty sure the system came about as a way to 'simplify' ticket costing and avoid companies abusing it :|

Re:Reminds me of the "split tickets" system in the (1)

GauteL (29207) | about 8 months ago | (#46216643)

"Bizarrely I'm pretty sure the system came about as a way to 'simplify' ticket costing and avoid companies abusing it :|"

I have no doubt. The result is of course a system which appears blatantly unfair to people in the same way that buying two small packets of biscuits in the super-market may end up cheaper than buying the double size "economy, always better value, package". It is just not right. It should be dead easy to price the journeys to have the same price per "stage" regardless of whether you buy the full journey or buy each stage individually.

The ridiculous thing is that it IS easy. This is proven by all the third party websites that offer you this service (SplitYourTicket, SplitMyFare, RailEasy, etc.). It really should be easy to sort this out through the official channels.

Re:Reminds me of the "split tickets" system in the (1)

jo7hs2 (884069) | about 8 months ago | (#46216301)

As for airlines, sometimes it cuts both ways. United's one-way price is sometimes less and sometimes more than round trip. Actually, often the same. Once, to use some flight credit for a pair of cancelled seats booked separately for the same flight, I had to book two one-way, multiple hop flights (at the advice of a CS agent) to use the credit, because it couldn't be combined in any way. The whole thing ended up being absurd. There was no price difference.

Not quite the same (0)

Anonymous Coward | about 8 months ago | (#46216319)

Ah, but in that case you're still buying tickets for the actual journey you make. This is different: two people buy tickets for short local journeys, take a "detour" (with respect to the tickets they have, not where they actually want to go) into the city centre, swap tickets, and travel back out to their destinations. They're not making the journeys printed on the tickets at all - they're making different, and much longer ones, that happen to have the same endpoints.
So, to address various other comments, yes, it's probably fraud.

Re:Reminds me of the "split tickets" system in the (1)

Richard_at_work (517087) | about 8 months ago | (#46216379)

Airlines have a pretty good reason to charge almost the same for singles as they do for returns on international flights - having a return ticket is a big part of determining whether a traveller is not intending to immigrate illegally, so if you travel internationally on a single ticket then that triggers a lot more in the background than it would if you travel on a return.

The airline is responsible (via international treaty) for the cost of removing you from the country if you are found to be in immigration violation at your destination, so they have to have that covered or they are out of pocket.

The cost of the single doesn't quite cover both trips, but it is more expensive than what the single would actually cost if the above didn't have to be taken into consideration, but that also means that the return ticket cost is often subsidised by the higher single prices.

Re:Reminds me of the "split tickets" system in the (1)

GauteL (29207) | about 8 months ago | (#46216597)

"Airlines have a pretty good reason to charge almost the same for singles as they do for returns on international flights"

This is EU internal, so this is completely irrelevant. Companies such as RyanAir, Easyjet, Norwegian, etc. are more than capable of giving you a decent offer for a one-way ticket for the same routes, the same goes for some of the traditional airliners. I'm afraid this must be KLM internal policy.

US Airlines (1)

swb (14022) | about 8 months ago | (#46216477)

There have been stories about the US airline price structure where people find that a plane trip from A to B costs more than a ticket from A to C with a layover in B, and people have bought the ticket from A to B and just not made the leg from B to C.

The airlines were unhappy and I think were threatening or actually refusing to honor the round trip portion of the ticket, regardless of the fact that the capacity from B to A was spoken for and that they saved fuel costs between B and C on both legs of the flight.

I'm sure they had some complex rationale, like maybe competition made the A to C route by itself break even and without making a profit on A to B the entire route lost money, something like that.

But airline fare pricing has always seemed screwball to me.

Re:US Airlines (0)

Anonymous Coward | about 8 months ago | (#46216617)

There have been stories about the US airline price structure where people find that a plane trip from A to B costs more than a ticket from A to C with a layover in B, and people have bought the ticket from A to B and just not made the leg from B to C.

It's absolutely true. I've personally seen a case where a ticket (one-way) from A to B cost almost 3 times as much ($1100 versus $400) than a ticket from A to C stopping at B. Unsurprisingly, my father bought the A to C ticket and accidentally missed the connection. Since the tickets were one-way, that was the end of it.

Re:Reminds me of the "split tickets" system in the (0)

Anonymous Coward | about 8 months ago | (#46216517)

There may have been some original sensible reason, but it sure feels like a scam to me.

It's a consequence of the fact the railways were created by and are still run by multiple rail companies and each sets their own prices. When you cross the boundary from one to another you see this happen, or when multiple companies run on the same route.

It's more than fair. (1)

metrix007 (200091) | about 8 months ago | (#46216081)

Public Transportation should be free or heavily subsidized more than it is.

Pay politicians less, cut out zoning pricing crap and don't pay the unions so much or give them so much leeway.

Re:It's more than fair. (0)

Anonymous Coward | about 8 months ago | (#46216537)

Public Transportation should be free or heavily subsidized more than it is.

I don't know how it should be free -- you probably want your taxes to be lower, simultaneously, right?

Pay politicians less, cut out zoning pricing crap and don't pay the unions so much or give them so much leeway.

Often enough here people will point out that you get what you pay for when it comes to programmers. So, you're unhappy with your politicians, you want to pay them less? That'll attract better talent....

Also, I don't know SF area, and I don't know where you are, but where I live there are millions of travelers a day. Do you really have so many politicians that their salary is a big fraction of the city costs?

"...to encourage people to live in certain areas." (1)

tlambert (566799) | about 8 months ago | (#46216097)

"...to encourage people to live in certain areas."

Then make those areas not suck. Don't (effectively) tax me and everyone else because they want to live somewhere that doesn't suck.

How is making people who can't afford to live some place that doesn't suck live in sucky areas going to make them suck less?

Unless what you really what to do is enforce economic stratification by forcing all the poor people to live in the undesirable areas, instead of damaging the delicate sensibilities of the more well off?

Re:"...to encourage people to live in certain area (1)

daknapp (156051) | about 8 months ago | (#46216149)

But the entire purpose of mass transit is social engineering. It has nothing to do with getting people from one place to another safely and efficiently. That's just the bait they use to get voters to approve the systems.

Re:"...to encourage people to live in certain area (1)

squiggleslash (241428) | about 8 months ago | (#46216623)

Kinda the opposite. The entire point of modern transit-less suburbia is social engineering. The entire idea was to force automotive usage, largely because a particular breed of crackpot libertarian (and unfortunately not even out-of-the-mainstream type - even Margaret Thatcher spoke in support at times) believes cars are "pro-freedom" and obsessed about that in the first half of the last century.

Transit developed pretty naturally in the last half of the nineteenth century and when implemented in an organic way is usually profitable and popular. Of course, today, it's rarely profitable, especially in the US, but that's in part due to two major reasons.

The first is that the suburban movement has made it pretty damn near impossible to implement in most parts of the US, and so what's there is expensive and difficult to use.

The other is that in places like, for example, New York City, the high demand for in-city living (in a country starved of urban development, what urban space survives is in extremely short supply) means living costs are already through the roof, and the city itself needs to ensure basic services are kept affordable or else lose people able to fill essential but underpaid jobs. In some cases, like transit, this is just good policy anyway, the cost of expanding the road system far outweighs any subsidy you give transit to ensure its ongoing popularity.

Transit came first. Social engineering was used to get people off transit by the far right. Politicians have refused, over and over again, to do more than dip their toe in transit despite the massive popularity of such a position until relatively recently. And now you're claiming that it's transit that's social engineering? Bollocks.

Public transportation should be free. (1, Interesting)

tlambert (566799) | about 8 months ago | (#46216127)

Public transportation should be free.

The utility function of the marginal costs of a (not small) fare + inconvenience + timing + freedom of movement vs. the cost of owning a car is enough that most of us are effectively being paid not to take it in the first place. Being free would up ridership for people on the edge.

The whole idea that it's a profit center is pretty stupid, as all public transportation is subsidized anyway, and exists as nothing but a cost center to generate pension paying positions for government employees anyway.

The whole point of making it cost something - anything - is the same reason that health insurance plans require copays: to discourage use. For public transportation, the use they are attempting to discourage is that the homeless will ride around all night in order to avoid freezing to death, or because they have nowhere else to go.

Clue bat: the homeless use busses as public housing anyway, they just get their day out of the way first (I had a nice long conversation with a homeless person who does just that, getting on one of the bus routes that runs all night, and getting off near where he gets on the next morning). Just address your damn homelessness problem, instead of trying to pretend it doesn't exist, or making life (more) miserable for the homeless.

Re:Public transportation should be free. (0)

Anonymous Coward | about 8 months ago | (#46216237)

Alternative explanation: the system is near to capacity, and making it cost money is necessary to curb demand to the point where the system can (just about) cope. Which seems more likely than "Because I want to screw the homeless."

Re:Public transportation should be free. (1)

pipedwho (1174327) | about 8 months ago | (#46216307)

So instead of putting on more buses/trains and improving the transport infrastructure, you just keep raising the fair to reduce patronage. Great idea! If they quadruple the fairs tomorrow, they might even be able to get rid of a few entire routes. Less buses, less employees, and therefore lower payroll costs.

I smell profit here!

Re:Public transportation should be free. (0)

Anonymous Coward | about 8 months ago | (#46216695)

It's a good thing that adding buses/trains and "improving the transport infrastructure" is so cheap, quick and easy...

Re:Public transportation should be free. (1)

tlambert (566799) | about 8 months ago | (#46216727)

Alternative explanation: the system is near to capacity, and making it cost money is necessary to curb demand to the point where the system can (just about) cope. Which seems more likely than "Because I want to screw the homeless."

If it's profitable, then the system isn't near capacity until the busses are all separated by one bus length, and the number of passenger cars on BART and CalTrain exceeds the ability of a locomotive to pull them. Until that point, you just add more employees and more equipment and increase your profit, since your fixed administrative costs aren't going to go up linearly with the rest of the direct costs of providing the services (i.e. the ratio of HR people is not 1:1 with the number of station and transport transit people).

Also you will note that it's not a matter of actually "screwing the homeless" - the gentleman I talked to was not deterred, for example - I was merely giving them the benefit of the doubt for not running more service at a reduced or no cost, if it was a subsidy anyway.

Your argument is nearly the identical argument that they use to raise the fares and reduce routes.

It's also the same argument the University of California system uses for canceling classes "due to lack of interest", when they accept fewer students, and meanwhile there is documented demand for both to increase. If the primary income stream is tuition, then every additional student is more income, which is more ability to pay teachers and put on classes (presuming the money is not going to line someone's pockets). Otherwise, the enrollment limits are sufficient to limit enrollment, without increasing tuition and fees to keep people out. If you have a hard limit on enrollment, then it doesn't need to be self-limiting due to costs.

That means that if putting on classes and instructors and classroom space isn't cost-effective, the primary income isn't from costs, so increased costs are only designed to keep out poorer students in favor of richer students, so that rather than an egalitarian cross-section of society being accepted up to the limit cap -- and in theory, they'd be the most academically gifted people, regardless of their wealth or lack thereof -- we end up with poor people not getting an education and rich kids whose only measure of worth is the fact that their parents were wealthy getting one instead.

It's the same social engineering happening in both places.

Not arbitrage (1)

abies (607076) | about 8 months ago | (#46216253)

I don't think it is arbitrage in any way. If you read wikipedia beyond first sentence it is
" an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs"

For all real-world use cases of arbitrage, it was about net _profit_ after the arbitrage, not about savings. Example of arbitrage would be buying two tickets which are cheaper that single ticket and then selling it to gullible customer for price higher than what you have paid (possibly lower than price of total ticket). If you could do that while keeping your costs (buying and transporting tickets, 'advertisement', factoring in unsold tickets etc etc) low enough and turn profit, then it is an arbitrage. But even then, given inherent risks of not selling all tickets, it would not be a proper arbitrage. To make it proper, you should sell tickets first and deliver them later - only this way you are sure that profit can be realised.

Tickets (1)

Malc (1751) | about 8 months ago | (#46216359)

They still use physical tickets in San Francisco? I thought it was supposed to be a high tech centre. All over the world cities are using contactless cards to do this. The Oyster system in London for instance even discourages the use of tickets by making them much more expensive.

Re:Tickets (1)

phmadore (1391487) | about 8 months ago | (#46216389)

They have those too. It's one of the top tourist destinations of the world, so of course there are solutions for people who aren't going to use it for a week or even for a full day.

Re:Tickets (1)

redback (15527) | about 8 months ago | (#46216443)

Too bad Melbourne wasn't smart enough to do that.

You have to buy a Myki card to use the PT.

Geeking it up makes it less crime-y. (0)

Anonymous Coward | about 8 months ago | (#46216405)

When a "data scientist" discovers a small-time fraud opportunity and calculates all the different ways it could be perpetrated, they are "hacking" and the con is "arbitrage."

In france there s about the same trick with hiways (2)

orogorhotmail.com (744478) | about 8 months ago | (#46216521)

In france, on some highway, if you exit then re-enter the highway in the middle you may pay less. That's because private highway compagnies must, by contract, have some average price. So to make more money, the most used fares are more expensive and the less used ones are less exepensive, and in average, that match the contract they signed with the governement. Threre's a site dedicated to calculate how much you may gain by doing this : http://www.autoroute-eco.fr/ [autoroute-eco.fr]

This sounds less like arbitrage... (1)

TimeZone (658837) | about 8 months ago | (#46216855)

... and more like fraud. TZ
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