Thursday, September 28, 2023

After $1 Ferry Rate Hike in June, Another May Be Coming

Coronado Ferry Landing

After a $1 hike to fares at the beginning of the summer, another rate increase may be in store for the San Diego-Coronado Ferry.

The California Public Utilities Commission (CPUC) in June approved a one-way rate increase from $7 to $8, which took effect June 26. Now, ferry operator Flagship Cruises & Events is requesting a zone of rate freedom (ZORF) which would allow it, at its own discretion, to raise or lower rates by 15 percent.

If approved, that means a rate increase to up to $9.20 for a one-way ticket could be coming. The CPUC held a hearing Aug. 4 to consider the request, and will vote on the matter at a voting hearing whose date has not yet been set.

Flagship says the increases are necessary to maintain its 10 percent profit margin, which has deteriorated due to increased wages and gas prices.

Prior to June’s rate increase, the CPUC in 2021 approved a rate increase from $5 to $7 for one-way fare, with the new $8 fee marking a 60 percent increase over two years. A hypothetical $9.20 rate would yield an 84 percent increase over the same period.

In its application to the CPUC, Flagship says it is quickly approaching a break-even point for operating costs, yielding no profit. In the past, the utilities commission has authorized rates that granted Flagship’s target 10 percent margin.

The cost of crude oil spiked during the pandemic, and although it began to drop again in July 2022, the cost per barrel remains higher than it was pre-pandemic. San Diego also raised its minimum wage from $15 to $16.30 per hour on Jan. 1 this year.

But some question whether rate hikes help or exacerbate the operator’s falling profits.

“I have to think the operating costs are roughly the same whether 10 or 50 passengers are on board,” said Mark Stephens, a San Diego resident, in electronically submitted public comment. “What is happening is that costs for fuel, etc., may be growing, but fewer people are riding because of the cost increases, so revenues will never catch up.”

A bus ride from the San Diego side of the bay to Coronado costs $5 per person, and riders under 18 are free, but takes about 40 minutes, including a short walk. The ferry, by contrast, takes 15 minutes, and requires no transfers. Children under four are free. Driving takes around 15 minutes without traffic.

Presumably, passengers weigh cost against experience in choosing their route.

After a brief hearing last week, the CPUC opted to move forward with a scoping document, which will be released with a date for a public voting hearing.

Megan Kitt
Megan Kitt
Megan's work as a journalist has taken her around the world, from across the United States to Tokyo and Kampala, but her passion lies in community reporting. She believes a quality news publication strengthens a community by informing and connecting its members. She holds BA degrees in journalism, English literature and creative writing; an MA degree in creative writing; and her photography has been published internationally. While on a reporting assignment in Uganda, she founded Tuli, a fair trade fashion brand that earned her industry acclaim, most notably by earning her the title Designer to Watch at New York Fashion Week in 2022. Megan's diverse experience in travel and career taught her to approach reporting eager to understand the many experiences and perspectives that make life so interesting. When she's not working, you can find Megan wrangling her two toddlers, hiking with her husband, and binging podcasts.Have a story for The Coronado Times to cover? Send news tips or story ideas to: [email protected]