Muni accused of price gouging over fares

This week, the San Francisco Municipal Transportation Agency (SFMTA) voted to raise fares on Muni buses and trains starting in July despite the ongoing public health crisis, a move so unpopular that at least one SF lawmaker alleges it was criminal.

Supervisor Dean Preston said after the vote that he has asked the SF city attorney to investigate whether SFMTA is guilty of price gouging by voting to raise fares too high during a state of emergency, citing a law typically used to penalize private businesses that take advantage of disasters to charge more for necessary goods.

“If a private transportation company did what the SFMTA just did, we would be calling for criminal prosecution,” said Preston in an emailed statement, vowing that he will push to change the law if necessary to make sure it applies equally to public services like Muni.

Whether or not SF City Hall can prosecute Muni for the fare increase—and what that action would look like—remains to be seen. Under California law, it’s illegal to raise the price of goods and services more than 10 percent during an emergency.

One of the SFMTA fare hikes amount to a 12 percent increase, and the city has indeed been in a state of emergency since February.

According to California Attorney General Xavier Becerra, the anti-gouging measure applies to “individuals, businesses, and other entities,” including “government agencies.” [Correction: The statute qualifies government agencies as parties protected from gouging. Whether a public body like SFMTA qualifies as “other entities” for the purposes of prosecution is ambiguous.]

The gouging rules are also specific to “major necessities” like housing, food, and medical supplies. The guidelines do include transportation as one of the protected necessities.

There are a couple of variables that potentially make the SFMTA’s case special, the first being that the fare increase is an annual budget metric that the transit agency has implemented every year for over a decade now, therefore it could be argued that the decision to raise fares did not happen now but rather years past and that the SFMTA board is merely abiding by that decision.

The full fare hike also doesn’t kick in until later this year, by which time the state of emergency could well be over.

Additionally, SFMTA head Jeffrey Tumlin pleads necessity for the fare hike, saying that it’s necessary to keep up with inflation and the price of payroll for Muni drivers and other workers. Becerra claims that the law allows for larger prices increases if they are “directly attributable to increases in the cost of labor.”

Note that none of this conclusively illustrates SFMTA’s hypothetical guilt or innocence. Preston’s allegations of wrongdoing do not amount to an indictment or conviction, and nobody at the transit agency has been convicted of a crime.