The New York City Transit system’s subway division is operating at a net loss. The case explores strategies to improve profitability, focusing on revenue growth due to fixed expenses. Key areas examined include:

1. Estimating ridership using capacity or demand-based approaches
2. Analyzing profitability drivers (revenue and cost)
3. Calculating daily ridership (approximately 6 million)
4. Proposing revenue growth strategies:
   • Short-term: Adjusting ticket prices, implementing granular pricing models
   • Long-term: Expanding services, lobbying for policy changes
5. Evaluating the impact of distance-based pricing on different socioeconomic groups and city dynamics
6. Recommending differentiated pricing schemes while considering public mission and implementation challenges

The case emphasizes balancing profitability with public service obligations in a government-run transportation system.