Monday, May 25, 2009

TransLink - an arbitrage victim

TransLink, the B.C. Lower Mainland transportation authority, is experiencing just how the market works.

TransLink forces university students, or more rightly, their parents, to buy a transit pass, or Upass. They get the transit pass whether they use it or not. So, if they drive to school, they have a pass they don't use.

No doubt the TransLink braintrust had good intentions, not to mention forced purchases help it look like the demand for passes is increasing, but like most well-intentioned policies, there was an unintended consequence.

Some of the kids are selling their Upasses to anyone willing to buy them, on Craigslist.

This is a classic example of the market working to successfully arbitrage a product that is one price in one market (the student market) and another price in a different market (the everyone else market). It is just the same as sports game ticket scalpers - they sell the ticket at a higher price to someone who values it more.

The government has no right to force people to buy something they don't want. The upass program was poorly thought out and should be scrapped.


Naazia said...

Poorly thought out and should be 'scrapped'? Why are you taking out your frustration with a few students on the rest of us who are quite grateful for our UPasses? Sure, let's throw the baby out with the bathwater and force the poor students (that term exists for a reason, you know) to pay ~$300-500 every term instead.

So there's a handful of people out of the 30,000+ students at UBC selling a few passes here and there. Big deal. The vast majority get an extensive amount of use from it - just see the packed buses. Translink doesn't even care all that much. Worry about people taking advantage of the honour system on SkyTrain before you worry about this if you're so concerned about monetary losses.

Besides, this passed 3 student referendums. Hate to tell you, but this is OUR choice, not yours.

Alex Lougheed said...

Except that at UBC the U-Pass program is a contract between TransLink and all the students--with no government in between. It is up to the students via referendum to renew it on a tri-annual basis, and support for the program is only growing. Just last year, UBC students voted 17,945 in favor, 500 opposed to not only keeping, but increasing the mandatory fee[1]. 86% of students use their U-Pass as over November 2004[2], and the number of trips have gone up by 172% since introducing the pass[3].

Also, those who are too encumbered by the fee can also apply for a subsidy through their student association[4].

There is no forcing going on, and there is no TransLink scheme here. Just the transparent will of a population subscribing to something they exclusively want, at no cost to others. This is something the students fought to get, and that the students are glad to have.

[2] "Eighty-six percent of students at UBC and 81% of students at SFU had used their U-Passes as of November 2004" -
[3] See Table 3.1:

Melissa said...

I was lucky to have the benefits of the Upass when I began university in 2003.

The last student referendum to renew the Upass in 2007 passed by 92% of student voters. If students didn't want it, they would vote "no" by majority.

If you would like to advocate for anything, advocate against high tuition fees. The tuition freeze was lifted when BC Liberals came into power in 2001 and our fees have skyrocketed. My degree cost $21,000 and that's while I was living with my parents with few expenses.

So for $100 a semester for the Upass to be able to get to school any anywhere in Vancouver compared to $292 to $544 is a damn good deal.

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