Thursday, July 08, 2010

Munich's U-Bahn and the related tax evasion literature

Munich has a clean, modern, far-ranging, very easy-to-use subway system, the U-Bahn, which I gather dates back to the 1972 Olympics. Even without speaking or reading much German, it makes it a breeze to go anywhere in the city or environs that you like. One great feature, also found in D.C., but in NYC almost nowhere, is its electronic signs telling how long till the next train arrives. I am noted among intimates for extreme impatience, at times, when waiting for a train. But it's really about the uncertainty, not the waiting time as such. If the sign says I need to wait 10 minutes, I'm fine with that. For some reason, not knowing when/if it will come is the part I can find difficult. Must be some suppressed early-childhood memory behind this; then again maybe not. (This isn't the script of an early-1950s Hitchcock movie, after all - or at least I hope not.)

The most interesting thing to me about the Munich U-Bahn is the ticketing design. You are legally required to have a valid farecard in order to use the system. And there are signs threatening the mandatory imposition of a 40-Euro fine if you are found without a valid farecard. But to enter the U-Bahn, you don't actually use the farecard in any way - you simply walk in, and should have it in your pocket in case you are asked. But I have yet to see any enforcement, and I suspect that the threat is statistically quite low.

People therefore have the option, at what would appear to be a very low risk, to ride and use the system without paying. Applying the risky investment framework that one finds, for example, in the tax evasion literature, it seems that one's expected fare (at least, counting monetary costs only) must be a lot lower if one cheats than if one buys the required farecard.

Allowing people this cheating option, without making them engage in forced entry (such as by vaulting a turnstile) would be unthinkable in many systems. Surely in New York or Washington one could never do it, and I would suspect that the same holds for London and Paris (which don't allow you just to walk in, unless I am misremembering Paris). Something tells me it wouldn't work in Italy, either, or in most other countries. But Belgium's commuter trains were similar, as I found in May, and the only time I was challenged was when (while jet-lagged) I mistakenly boarded a first-class car.

Evidently, people mostly comply, or else I assume they would have had to build entry barriers. For that matter, Muncheners also largely cross at the corner and wait for green lights (contrary to my practice as a New Yorker), although in a few spots without lights there evidently is an accepted convention of cross-as-you-can.

Returning to the U-Bahn fare system, the other thing I find interesting is that it requires (at least for a short-term person like me) considerable thinking about what is the best option. You can purchase a single ride, or all rides for the day for one person, or all rides for either one day or three days for up to five persons traveling together. I believe there's also a separate option that permits you to ride with a dog. And I gather that there are lots of more long-term options, extending for as long as a year.

With the vagaries of our travel schedule as a family here, I find myself needing to think it through each time, so I can figure out what is likely to be most cost-effective. (Yes, I am complying despite my international tax policy interest in multiple-play prisoner's dilemmas where cooperation fails to emerge.}

So they assume little or no cheating, but have a structure designed to reward good planning by law-abiders.

1 comment:

Unknown said...

Yes the people in Munich and Frankfurt are probably honest with respect to paying their U-Bahn fares.

I doubt however that this extends to payment of income tax. Note the high profile tax cheats among Germany's elite.