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.


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?

speed

The train system should take over the insurance company. Or start selling passes for 500 rupees.

byrneseyeview

This insurance company is in a precarious position -- there's a huge moral hazard because the financial cost is basically the only cost here. To the extent that this affects customer behavior, it's a bad deal.

Though it's hard to say. Is this a policyholder-owned company, or is there someone collecting the profits?

muczachan

A company in Poland offered a somewhat similar deal several years ago. For an up-front payment of 29.60 PLN they offered an "insurance" agreeing to cover 75% of ticket fines (speeding or otherwise) for its customers. (The minimum fine is 50 PLN for speeding 10 km/h ~6mph, up to 500 PLN for single violation.)

Unfortunately I know of no one who used such insurance and I couldn't find any information about why they stopped this business around 3 years ago.

Mango

The GO commuter train service around Toronto works on the same principle: random ticket checks.

Back when I was a student and I rode the train frequently I worked out the numbers. The fine for getting caught was high enough that the expected cost of riding without a ticket was significantly higher than the cost of the tickets themselves. I found I tended to be checked between 1 and 2 times a month on average.

The train service can fix the problem in one of two ways: either increase the number of checks, or increase the fine. Or both, I suppose. That would make the insurance system uneconomical.

shashi

I am from Mumbai and travel by the suburban train occasionally. The odds of a check are 1 in 100 (or still lower) given there are 6 mn passengers. The fine amount is 10 times the value of ticket. Technically, there is every reason for the travelers to cheat. But, my observation is exactly opposite. At busy stations, one can see really long queues to buy tickets, even at the oddest hours like, say 1 am.

Here is my take on this. If one gets caught without ticket, the process of paying fine is not a 2-minute affair. They will take the offender to the nearest office, bunch of folks from enforcement agency will grill the guy for quite some time, which surely amounts to mental harassment. It can be easily an hour long affair. Suddenly, even the 1 in 100 chance sounds scary. All this hassle is just annoyance, when the
ticket costs Rs 8 ($0.20) for a 30 km journey!

Pax

I don't think it would be that hard to implement a better way to check tickets - New York City for example has a pretty iron clad system. I can't imagine getting on a subway there without a valid ticket too often. And there are over 5 Million people who ride that system per day !

Josh

The Light Rail system from Bayonne to Jersey City and Hoboken, NJ works the same way as well. I tracked the frequency of fare collectors on my rides for about six months and discovered:
1. The fines would cost about twice what paying for a ticket would cost.
2. The fare collection was sufficiently random that there didn't appear to be a time of day that would minimize fines.

If there's enough arbitrage for this insurance scheme to work, then clearly the train company in Mumbai is leaving money on the table. The solutions are obvious, but their pitfalls may not be:

1. Raise the fines. When the fines are raised enough to make cheating no longer pay, the insurance scheme no longer works.
2. Increase the number of fare collectors/enforcers. Frequency of fines also makes the insurance scheme no longer work, although there is less benefit to the railway company as they have to pay more workers.

Both of these scenarios, however, assume that when you catch a fare evader A) the rider can afford to pay the fine and B) the company can enforce that the rider pays the fine. One or both of these may not be true in a heavily populated and less developed area. The latter probably no longer applies to Mumbai.

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egretman

Get rid of the regular fare. Have only random fines. Make the fines enough to cover what would have been the entire regular fare. The people who get randomly caught get a free one month pass for the next 30 days. So they don't unfairly pay too much.

Make tourists still pay a tourist fare. Since they will be the only ones in line, the lines will be short.

All problems solved.

sagemane

There has been talk of making transit free in San Francisco because the cost of employing fare inspectors and maintaining an infrastructure of fareboxes and faregates eats up a huge chunk of the money earned from the fares (which is quite low anyway - a transit system that earns back 50% of the money it spends is considered successful). Further, having to collect fares makes busses run slower which means more busses and drivers are needed to procide the same service frequency.

Of course, the big problem is that if there is no fare more people will use transit, and more service capacity will be needed.

G.V.Varma

I was a regular commuter in a morning train called "inter-city express" and I used to watch a group of ticketless college students(of both sex) whose logic is as follows:
The ticket charge between boarding place and destination is Rs.36.For up and down journey either they have to spend Rs.72 or to buy a one month season ticket valuing Rs.310.The probability of being caught by the ticket examiner is low,say, once in a week with a fine of Rs.250.So, even if caught in a single week once, their supposed saving is either 72*7=504-250=254 or
310-250=60.Since they are daily travellers, they use all informations effectively to form
rational expectations of being caught.Errors in this simple case also are quite random.Without any insurance, by forming rational expectations regarding the arrival of the ticket examiner,they still continue to enjoy free journey.They are only occasionally surprised by the authorities.

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egretman

Oops, slight modification. Fine should be the inverse of the sample rate times the regular fare. And the free pass should be the sample rate should be the inverse of the sample rate in days.

So a random sampling of every 100 persons, gives a fine of 100 times say $1 regular fare equals $100 fine. But he/she gets a 100 day free pass.

Now problem solved. Can't believe you economic types didn't think of this!

Josef Svenningsson

There is an organization in Sweden which strives for not having any fees at all on buses, trams and subway. They have a similar deal: pay 100 Swedish kronor per month and they'll refund your fine if you get caught cheating.
This organization even has a website:
http://planka.nu/

What is interesting is that the membership fee seems to be higher in the city I live in (Göteborg) which suggests that we have a more effective system for catching cheaters than in the rest of the country.

Note: I'm not associated with this organization and do not agree with their opinions or actions.

quxing

Regarding the proposed free MUNI service in San Francisco, on the first few (3 days, then 6, depending on what they can afford) "Spare-the-Air" days, most transit in the Bay area is free. Last summer, the result was very croweded BART and MUNI lines full of suburban trekkers taking advantage of free fare to visit the City. The free service is supposed to inspire commuters to leave cars at home, but as a side effect, it's really a boon to sidewalk vendors and other cheap tourist spots in San Francisco. I took my kids to Golden Gate Park and the beach for free -- for you East Coasters, that would have been about $60 in mass transit subway and bus fares. BART is extremely expensive, compared to subways in the East.

majikthise

For what it's worth, the light rail in Houston also works on an honor system:

Tickets cost $1, but there is no barrier / gate to check for tickets. Instead, they occasionally have random ticket inspections on the train, with a $200 fine if caught without a ticket.

funkyj

Why is everyone missing the OBVIOUS solution? What needs to happen is for every person who sets foot on Indian soil to be implanted with an RFID chip.

Chip readers can be installed on the trains and the mafia can be contracted to collect the train riding fees.

Heck you could even fake data saying people have ridden the train Z times when in reality they have only ridden Y times (Z > Y) and when they protest simply claim that the technology is infallible. If they continue arguing the result is an increasing number of broken bones. If they are really stubborn about paying (e.g. too poor to pay) you could harvest their organs to recoup the cost of the train fare.

Ariel Diaz

Germany has a similar system. I lived there for the last year and a half, and I have to say that a ticketless system is MUCH nicer to use. No turnstiles, much less congestion, no having to swipe your card, just keep it in your pocket and show it when they control it.

Over the course of a year, I paid about 65 EU per month for the monthly pass, and was controlled about 10-15 times, which would have carried a penalty of 40 EU, so it was almost a wash, but it was worth it for the peace of mind of not worrying about being controlled. The penalty also escalates if you're caught more than once, so the insurance would be less applicable.

Adn as another user said, they also had very random checks.

I'm not sure this should be called an "honor" system though. There are clear risks to not having a valid ticket, and you can choose to take the risks. It's up to the system to create enough incentive to get people to buy tickets by changing the risk equation.

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lukeq

Just came back from Vancouver, where they do the same thing (random checks). It seems that they check enough to be effective. We all paid for our tickets (though, perhaps we're just rule followers ;)

liamj

I wonder if better enforcement might be a bad idea in Mumbai due to poverty of some of its passengers. The provincial govt may consider the better employment and self improvement prospects enabled by access to public transport for destitute a greater good than collecting more fares.

Similarly in West, if'n'when petrol hits $5/l, a smart government will worry less about PT fare collection and more about ensuring sufficient capacity.

Here in Melbourne Aus they've got both gates and plenty of random checks, privatised trains and trams still propped up by several hundreds of millions in subsidies a year.

another MikeM

Didn't Ronald Coase write a paper on the trade-off between station ticket-sellers, roving inspectors and free-riders? I have the distinct impression that it influenced a number of commuter rail administrations.

Somebody at U of C must remember this.