Public Transport Fare Increase Set for July 1

By Aryeh Stern

The central bus station in Tel Aviv. (Omer Fichman/Flash90)

Public transport fares in Israel are set to rise starting next Monday, July 1. The cost of a monthly pass will increase by 5%, single bus fares will go up from NIS 5.5 to NIS 6, and light rail fares will rise to NIS 8.

These fare adjustments are tied to the costs of inputs such as fuel, wages, and insurance. Annually in July, a committee from the Ministry of Finance and the Ministry of Transport reviews and adjusts the fares accordingly.

The increase in light rail fares is linked to a decision made a year ago to prevent a general rise in public transport fares. Transport Minister Miri Regev and Finance Minister Bezalel Smotrich had subsidized this prevention by 12%, with the light rail fare hike being one of the funding sources for this subsidy, effective July 1.

The Ministry of Transport has indicated that Regev will discuss the fare rise with Smotrich, but there seem to be no budgetary sources available to subsidize the increase further.

In Israel, public transport is 85% subsidized, significantly higher than in other OECD countries, where public transport is more expensive but often of better quality, with more developed infrastructure and direct subsidies for certain population groups.

Studies by the Ministry of Transport and global research indicate that price changes, especially minor ones, do not significantly influence people’s decisions to switch from private cars to public transport. Factors such as reliability and speed are more crucial. To encourage people to switch to buses, for instance, services need to be more frequent and have dedicated lanes to ensure consistent travel times, while making car use less convenient through parking policies and taxation. However, the reliability of public transport in Israel is declining, and funding for additional bus services is frozen due to the stalled congestion charge law, which Regev opposes.

The fare increase comes just three months after the announcement of the “Transport Justice” reform by the Ministry of Transport. This reform, costing NIS 300 million annually, increased discounts for various groups, including residents of outlying areas, young people aged 18-26, and demobilized soldiers, who can now travel for free. This reform followed the “Equal Way” reform by the previous government, which Regev had opposed. Unlike the previous reform, the current one deepens government subsidies but does not prevent fare increases.

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