How to Cheat the Mumbai Train System

A blogger named Ganesh Kulkarni discovered that the commuter trains of Mumbai serve six million passengers daily but the system isn’t equipped to check everyone’s ticket. Instead, Kulkarni writes, ticket agents conduct random ticket checks. This has given rise to a form of cheating that is elegantly called “ticketless travel.” Although it’s probably not very common to get busted for traveling ticketlessly, there is a significant fine if you are. And so, Kulkarni writes, one clever traveler has devised an insurance policy to make sure that ticketless travelers who are caught can lay some of the expense.

Here’s how it works. You pay 500 rupees (about $11) to join an organization of fellow ticketless travelers. Then, if you do get caught traveling without a ticket, you pay the fine to the authorities and then turn in your receipt to the ticketless-traveler organization — which refunds you 100% of the fine.

Don’t you wish that everyone in society was as creative as the cheaters?

But, more important: wouldn’t there seem to be a big financial upside in investing in enough ticket-takers to make sure that the train system actually makes everyone pay? If I ran a swift little private-equity firm, I’d think about taking over the Mumbia train system, pronto.


pagnz

Your swift little private equity firm would probably go broke because your economics here are really dodgy.

Why swould this statement be true: "wouldn't there seem to be a big financial upside in investing in enough ticket-takers to make sure that the train system actually makes everyone pay?." In fact many public transport systems around the world allow a proportion of travellers to ride dishonestly because the cost of ensuring everyone pays is higher than the cost of collecting fares from freeloaders.

This is simple economic cost/benefit: What is the cost of making sure the last, say, five percent would pay? What is the lost revenue if they don't pay? When most transport organisations go through this exercise they realise there is often no economic benefit in stricter enforcement.

bjornsm

The "problem" seems to be that the fares (and the associated fines) are so low that making people pay is not worth the effort.

In Oslo, we have a similar random check system. It works quite well, partly because the fares (and fines) are high enough to make enforcing them profitable, partly because they sue you if you're caught several times.

sunilbajpai

I worked for Bombay Division 15 years ago and the insurance system existed even in those days.

Although ingenious, it wasn't widely patronized back then for reasons given by shashi (#6). And the system wasn't running at a loss a few years ago when I checked. (Mack. #1)

gilesb

There's an optimal here that revolves around the cost of the ticket checkers, their productivity in numbers caught, the return over cost of each fine, all on one side, and the deterrence effect of such action on the other, along with the reckoned loss in ticket sale income. That's a lot of variables.

At some point, if you have enough conductors, there will be no barrier jumpers/ticket dodgers, etc. because the chances of being caught are too high for any net gain. This is probably not the optimum for the rail company in operating costs against income.

However, if this level is achieved and ticket buying becomes habitual, can you drop the number of conductors and continue to net the higher return?

Whether they are at the optimum, well, I'm sure there's a good sociologist/economist right there ready to do the research.

ddelruss

These insurance programs pose little risk to any train system. At the system's whim they can have a wave of ticket checking for a couple days and easily bankrupt the insurance carrier. Insurance carriers for hurricanes and such are not at the mercy of another sentient force. In this case, being at the mercy of the train system is not a good financial proposition - they can break you at any time, and the more successful you are the more likely it is they will strike at you.

I would note that Switzerland also has an open system of random checks. Part of the reason would be the above-ground trollies, which have no entry station or turnstile. I know the fear of forgetting my ticket and having a controller enter at the opposite end of the car, but scooting off at the next stop before getting fined! As tense as the Borne Identity, I tell you!

The part that was neglected in the previous comments, though, is the incentive to get a long term pass. The effort at having a daily pass is mainly for tourists - most residents (and train/trolly riders) keep monthly or even yearly passes. If the majority of your riders have monthly and yearly passes then the chance any particular rider is cheating is much lower. Leave it to the Swiss to design a great system!

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chrisfs

Caltrain in the SF Bay Area used to work in a similar fashion. A conductor would walk through the train and check for tickets, but it would take him longer than one stop to get all the way from one end of the train to the other. So if you were only going one stop (which in my case, was from a local university to a horserace track)and got on at the right place, you could be on and off again before he ever checked on your ticket. Thus leaving you more money for the track.

David Andersson

There's a similar organization in Stockholm, Sweden as well.

Vikram

I live in France, where everybody must have identification on them in case of a police verification. So if you do get caught for ticketless travel on the city trains such as the Paris Métro or the national SNCF, the offence will be noted. This means that frequent offenders may be slapped with a bigger fine on every subsequent offence if you aren't capable of paying the standard fine on the spot, in which case you'll be prosecuted by a magistrate.
The interesting thing about the National identity card is that it can be used for other offences too. A car passenger not wearing a seat belt is an offence punishable by a fine. If the said passenger is not the holder of a driver's licence, only the driver of the car is penalised. If the passenger does have driver's licence, then both he and the driver of the car would be penalised!

Harvey Wachtel

#15: It's not an "honor system" if there are spot checks and fines, it's a crime-and-punishment system.

James

free-riding trains will always be my real world application of economics first love!

Omar Azfar

Actually in the presence of insurance they could raise the penalty to the actuarially fair amount and do away with tickets altogether - perfectly efficient, fair and riskless.

Neil

Maybe lax enforcement of tickets in Mumbai is a form of price discrimination. Consider two people riding the train, a poor and a rich man.

The poor man can't afford to consistently pay the daily fare, so instead he pays a fine that effectively costs less when he's caught. He suffers inconvenience (as Shashi #6 points out), but since he's poor, his time is worth less and it may be a fair trade.

For the rich man, he pays the daily fee because should he become caught, he can't afford the inconvenience. Thus, the Mumbai subway system effectively charges two prices, ensuring full capacity and maximizing profits.

Michael

I came back recently from a trip around India, and I found that not just Mumbai, but mainy train stations in India didn't check our tickets. This included long overnight sleeper trains that actually did cost a bit of money. One annoying aspect of this meant that there were a lot of beggars and destitute people looking for handouts right on the platform where we were waiting for our train.
The Delhi subway system uses tokens with chips inside: purchase the token at a window, tap it against the gate as you walk in, then put it in the gate as you exit.
I tried to take a picture of the system (a modern, clean subway station in the middle of filthy old delhi!) but a guy with an assault rifle made me delete the picture.

njk

About 10 years ago, I was visiting Prague and noticed no one was paying on the public transit system. Not wanting to be the only sucker paying, I rode the trains for the 10 days I was there without paying. When I mentioned this to a Czech friend, he said that most people had passes and that there was a random check system (random Czech?) and I would have been fined (or worse) if I was caught. Ignorance was bliss.

AussiePete

Cityrail in Sydney increased the number of ticket inspectors by a substantial margin a couple of years ago and (anecdotally) instituted ticket quotas for them. Seems like a great idea, as most ticket checkers work nights/weekends and double as security guards.
The fine for not paying is around $200 AUS and the ticket costs about $30 per week, so regular travellers would generally have a big incentive to buy tickets. The occasional/weekend travellers have a higher chance of being caught, so it evens out.
Additionally, at $200/ticket the system appears to be self-funding.

buck

least you forget that the cheaters get cheated as well....

1) the person who is in charge of accepting payment for tickets issues his friend a "an official" fake receipt for getting caught riding ticketless....although the organization has ways of dealing with those types of cheaters....

L

Interesting. From my experience riding Mumbai trains, scores of people are caught riding without tickets. Probably witnessed it on every one I've taken.

To Mack - the same cannot be said about the IRS. Unlike these Mumbai ticket checks, IRS audits are far from random and follow a complex algorithm. Whereas there may be a high return for Mumbai trains on investing in more ticket-takers, the returns from increasing the number of IRS audits would likely not be worth the costs incurred to do so.

Mihir Modi

Nothing new here.... There was a TV show by the name of "Hum Paanch" that used to air some 10 years back which had the lead characters offer such insurance to people in a particular episode.

john

Here is a genius idea, automatic teller machines and an entry system that requires proof of payment before entering. Wait a minute, that's the same system the have at subways. You would only need to expand the system to accommodate train stations.
When you eggheads get together it is a sad sight. You're full of semblance but no substance.

Mack

For all we know the system overall is running a loss. I can't see how you'd make a judgment about taking it over without seeing the books. How old is the rolling stock? What shape are the rails and stations in?

What I would do pronto is make an offer to take over the ticket collecting duties. You could guarantee a higher return to the system and keep a tidy sum for yourself.

Of course, you could say the same about the US Internal Revenue... chances of that?