Expert: Metro fares cannot rise faster than Kyiv residents' incomes

Metro fares cannot rise faster than the income level of Kyiv residents.

This opinion was expressed by Viktor Medvid, director of the William invest expert consulting company, in a commentary to GolosUA.

"As for the grounds for cost, there are none, because the overall inflation rate for both last year and this year is up to 30% per year. Therefore, if there is to be an increase prices If the price of subway travel is adjusted for inflationary factors, it cannot exceed 30%. Even if inflation exceeds this mark, transportation services, especially those provided by the state or municipality, cannot exceed the growth of the population's income," he said.

At the same time, the expert noted that raising the fare in the Kyiv subway is not relevant at the moment.

"There is no increase in the growth of personal income. At the same time, an increase in the cost of subway travel in a certain time period will lead to a drop in subway revenues: people will use this mode of transportation less. There is such a thing as the "elasticity" of supply and demand. At some stage, you can raise the cost of services and there will be an increase in revenues, and at some stage you cannot. After all, using a taxi in a joint venture will be cheaper than taking the subway," he emphasized.

As a reminder, the Kyiv Metro utility company expects fares to triple in 2017. This was stated by Maxim Demchenko, chief economist of the KP. "Today we cannot talk about raising the subway fare. However, our company is facing some legislative changes related to the state regulation of electricity tariffs, when the Cabinet of Ministers of Ukraine canceled its order that allowed the use of energy for urban electric transport enterprises at the tariffs set for the population," he said. Demchenko explained that starting from 2017, the subway will stop paying for electricity at the rates paid by households. "We will start paying like an industrial enterprise. Compared to the current year, the price will triple in 2017," emphasized the chief economist of Kyiv Metro. According to him, the subway fares have always been social and the city authorities set them below a reasonable level. But in 2017, the authorities will return to revising the tariffs.