Israel’s Intercity Public Transport Fares Might Get Cheaper

Part of the plan is a fare reduction for intercity bus travel and service taxis

A sherut, or service taxi, in Tel Aviv
Aviad Herman

Transportation and Road Safety Minister Yisrael Katz is expected to announce Wednesday a new spending plan aimed at improving public transportation, sources told TheMarker.

These measures include subsidizing shuttle vans and moniot sherut (Hebrew for service taxis), and enabling them to accept the same payment cards used by Israel’s buses, trains and light rail.

Also expected to be part of the program is the implementation of a fare reduction for intercity bus travel that has been postponed by two years and counting.

The use of service taxis in Israel is shrinking, with only 700 out of 2,300 license holders actually operating the shuttles.

In exchange for the subsidies, the private companies operating the country’s shuttles agreed to open the industry to public tender. The licenses had originally been handed out by the government for free, and were then traded between operators for tens of thousands of dollars apiece.

The licenses were supposed to expire and return to the state in 2011, but the government has been repeatedly extending them. The latest extension is due to expire in a month.

Despite the plan to hold a tender process, sources in the Transportation Ministry said an additional extension of three to four years is under consideration.

It is also expected to take at least a year to install readers for the Rav Kav payment cards in shuttles, in part because the issue of whether the government can subsidize an industry that works on Shabbat must be addressed first.

The Knesset Finance Committee is due to discuss the service taxi reform in a week. The details of the reform have not been finalized.

The cost of the shuttle taxi subsidies have been estimated at around 200 million shekels ($56.4 million) a year, for the routes currently in operation. But if, as hoped, the subsidy will encourage operators to return to the market, the cost would rise.

Until recently, Transportation Ministry officials were against subsidizing the industry.

The government subsidizes public bus transportation.

Cheaper intercity buses

In 2015, a plan was announced to cut fares for intercity bus travel, but it was never carried out.

It was part of an agreement between the Transportation Ministry and the Finance Ministry that also included the reduction of intracity fares, and which was implemented.

This plan is intended to significantly reduce the price paid by commuters who travel regularly between cities, at an estimated cost of 400 million shekels a year.