On the finish of April, the fare tariff for public transport in Israel modified. The fare for a single journey rose from NIS 6 to NIS 8, and the worth of month-to-month passes rose accordingly. Along with the fare hike, the Ministry of Transport launched the second section of the “Transport Justice” reform initiated by Minister of Transport Miri Regev, whereby, along with free journey from age 65, reductions got to folks residing in neighborhoods in socio-economic teams 1-5 (out of ten) by the definition of the Central Bureau of Statistics. This was along with the reductions within the first stage within the reform to settlements in teams 1-5, to folks aged below 26, and to demobilized troopers.
By way of these reductions, the Ministry of Transport managed to cope with political calls for by the haredi events, embodied within the coalition agreements, for reductions on public transport for married yeshiva college students and for haredi settlements. Many Arab settlements additionally profit from the reform.
Amid public criticism of the rise in fares for a service that is still sub-standard, the Ministry of Transport constantly claimed that 80% of Israel residents got here throughout the scope of the reform and may gain advantage from the discounted fares, with the outcome that for them journey on public transport wouldn’t develop into extra expensive.
This declare will be examined by way of the Shopper Worth Index printed by the Central Bureau of Statistics. The most recent index studying, for Could, went scarcely seen within the midst of the warfare with Iran. It exhibits, nonetheless, that the rise in fares actually had an influence, as the general public transport merchandise rose 9.8% that month.
This rise was distinctive, as just a few gadgets rose by greater than 3% in Could: recent fruit by 3.9%, and sweets and chocolate additionally by 3.9%. The overall transport and communications class truly fell by 2.4%, however inside that class, as talked about, the rise within the public transport merchandise was exceptionally excessive.
Service, not value
However, though the worth of public transport demonstrably rose, that isn’t sufficient to find out whether or not the fares reform was a destructive or optimistic step. On the one hand, it has elevated the price of residing for anybody depending on public transport. Alternatively, authorities officers and transport specialists declare that, opposite to fundamental financial logic, which might have it {that a} lower cost brings greater demand, many of the public will not be delicate to cost with regards to public transport, however reasonably to service and reliability. With a view to enhance service and reliability, it’s crucial to lift the worth.
The Ministry of Finance has for years needed to lift public transport fares, and it has now discovered a possibility to take action. Journeys on public transport are vastly backed by the state, and the quantity grows from 12 months to 12 months. It has jumped fourfold up to now decade, to some NIS 14 billion. On the similar time, income from passengers has diminished through the years. In 2023, it averaged NIS 2.7 per journey, which compares with NIS 8 in 2004.
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The rising subsidy to some extent offset the erosion in income, however didn’t result in further funding in public transport in a means that may entice extra folks to make use of it. Earlier than the fare hike to NIS 8, the state subsidy amounted to about 90% of the price of a journey. The Ministry of Transport believed that if that proportion could possibly be decreased, it might be potential to take a position extra in service.
In different OECD nations, fares are a lot greater, and the state subsidy is considerably decrease than in Israel. In these nations, not solely are bus providers extra frequent, however infrastructure has been constructed that provides precedence to public transport, equivalent to bus lanes and rail tracks.
For Israel, all this stuff are late in coming. The state doesn’t spend greater than NIS 400 million yearly on public transport lanes, whereas the five-year plan for them is budgeted at NIS 6 billion.
The Ministry of Transport mentioned in response, “The reform must be distinguished from the Shopper Worth Index. The reform encourages a change to utilizing interval tickets that give in depth and substantial reductions, reasonably than single journeys. The advantages are given to subscribers and to not public transport customers usually. The impact of the advantages will likely be felt regularly, a extra passengers undertake the periodic subscriptions.”
Printed by Globes, Israel enterprise information – en.globes.co.il – on July 2, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
