New Jersey Transit's Elimination of a Standard Industry Benefit: Free Rides for Employees
It strikes me as a well-accepted idea in business that if you can offer your employees perks at no cost to your business, then you should do so. In fact, it is a no-brainer. In the public transit world, such a perk is the ability for transit employees to ride transit at any time for free . Offering free transit is a way both to increase ridership on your network as well as to improve your employee's familiarity with the actual operation of the transit system. Because the number of employees of a system is very small compared with the total ridership, there is no marginal cost associated with this perk because the added ridership will not be enough to require additional service. This kind of perk would be similar to airlines allowing their employees to fly standby for free, or to restaurants who give free meals to their employees. Because this perk does not cost the transit agency any money to offer, this perk has been almost universally enjoyed by all transit employees worldwide - until recently, that is, when New Jersey Transit's Board of Directors voted to end free public transit for non-union employees (ending free public transit for union employees needs to wait until their contracts come up for renewal).
It would be difficult to me to overstate how bone-headed this move was. As stated above, this perk cost New Jersey Transit no money, so ending it did not cause them to realize operational savings. Of course, it will increase fare revenue - but only $1.6 million per year out of an annual fare revenue total of $768 million and a total operating budget equal to $1.9 billion. So, in exchange for an increase in fare revenue equal to less than 0.1% of the annual operating budget, New Jersey Transit not only has seriously hurt the morale of their employees - who have not received any raises for several years and have to pay an ever increasing amount for health care - but has guaranteed that they will ride transit less and drive more, which means they will have less knowledge of the system they are supposed to know as well as potentially increasing traffic congestion.
What is especially disturbing is how little knowledge of public transit was expressed by the people voting in favor of this move. For example Jim Simpson, a Transportation Commissioner who chairs the NJ Transit Board said (as quoted in NJ.com): "It’s just a time we cant do it any longer — we can’t afford it." It is hard to understand why you cannot afford something that costs you nothing to provide.
Due to diminishing funding, transit agencies are struggling to stay afloat, using a combination of service reductions , fare increases, and pay freezes to survive. All of these measures have taken a severe toll on the morale of America's public transit employees . Yes, transit employees, as bastions of the middle class, may have below private-sector compensation but attractive benefits, including generous amounts of paid time off and pensions. While it makes sense that some of these benefits, especially pensions, may need to be reigned in a bit, it is beyond me why New Jersey Transit has chosen to further lower the morale of its employees for no apparent agency benefit by ending the free ride perk, which costs them no money. Fortunately, no other transit agency seems poised to follow suit but the very fact that New Jersey Transit now has given them this idea is disturbing.