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Medium Profitability

MTA Subway

#Transportation
ProHub Comment

This case balances traditional revenue optimization with public policy considerations. The candidate must estimate ridership through market sizing, identify revenue drivers given fixed costs, and propose pricing strategies while weighing equity implications for lower-income riders who subsidize short-distance trips under current flat pricing.

Estimated Time 15 minutes
Difficulty Medium
Source Columbia
50 / 100
Your client is the New York City Transit system, also known as the MTA. Specifically, you are working for the subway division. This division is part of a government authority that operates all the subways in New York City. Recently, the division approached you because they have been operating at a net loss. How can you help this client?

Clarifying Information

  1. Price for a single ride ticket is $2.75
  2. Ticket options include single rides, weekly pass, monthly pass, and reduced (for students / elderly)
  3. There are 22 train lines on the MTA (e.g., 1 – 7, A – G, J, L, M, N, Q, R, W, Z)
  4. The MTA gets current funding from ticket sales as well as some government funding – government funding can be ignored for this case