Fares rise despite “Transport Justice” program

At the end of April, the taxi tariff for public transport in Israel changed. The fare rose for one trip from 6 to 8 NIS, and the monthly passes rose according to that. Along with the height of the fare, the Ministry of Transport launched the second phase of the reform of the “Justice Transport” that the Minister of Transport, Miri Regev, started, in addition to free travel from 65 years, discounts were given to people who live in neighborhoods in social and economic groups 1-5 (out of ten) by defining the Central Bureau of Statistics. This was in addition to the discounts in the first stage of reform to settlements in groups 1-5, for people under the age of 26, and to worry the soldiers.

Through these discounts, the Ministry of Transport was able to deal with political demands by the Haredi Parties, which are embodied in the coalition agreements, to obtain discounts on public transportation for married youth students and Hardi settlements. Many Arab settlements also benefit from reform.

Amid general criticism of the increase in the price of service that is still below -level, the Ministry of Transport has constantly claimed that 80 % of Israeli citizens came within the scope of reform and could benefit from the relevant prices, which led to the fact that traveling in public transport will not become more expensive.

This claim can be tested by the consumer price index published by the Central Bureau of Statistics. The latest index reading, for the month of May, rarely noticed in the midst of war with Iran. However, it indicates that the rise in prices has definitely had an effect, as the public transport element increased by 9.8 % in that month.

This increase was exceptional, with a few elements increased by more than 3 % in May: fresh fruit by 3.9 %, sweets and chocolate also by 3.9 %. The public transport and communications category actually decreased by 2.4 %, but within that category, as we mentioned, the high public transport element was exceptionally high.

The service, not the price

However, although the price of public transportation is clearly rising, this is not enough to determine whether the price repair is a negative or positive step. On the one hand, the cost of living for anyone dependent on public transportation increased. On the other hand, government officials and transport experts claim that, unlike the basic economic logic, which may make a lower price lead to high demand, most of the public is not a sensitive price when it comes to public transport, but rather to service and reliability. In order to improve service and reliability, it is necessary to raise the price.

For years, the Ministry of Finance wanted to raise public transport prices, and it has now found an opportunity to do so. Public transport trips are widely supported by the state, and the amount increases from year to year. Four times in the past decade has jumped to about 14 billion NIS. At the same time, revenues have shrunk from the passengers over the years. In 2023, an average of 2.7 NIS per trip, which compared NIS 8 in 2004.

The somewhat increasing support compensates for erosion in revenue, but it has not led to additional investment in public transport in a way that attracts more people to use. Before raising the fare to NIS 8, government support reached about 90 % of the cost of the trip. The Ministry of Transport believed that if this percentage could be reduced, it would be possible to invest more in the service.

In other countries of the Organization for Economic Cooperation and Development, prices are much higher, and the state’s support is much lower than Israel. In these countries, not only the bus services are more frequent, but the infrastructure that gives priority to public transport, such as buses and railway paths, is designed.

For Israel, all these things are late in coming. The state does not spend more than 400 million New annually on public transportation corridors, while the five -billion -five budget plan in the budget is 6 billion.

In response, the Ministry of Transport said, “The reform must be distinguished from the consumer price index. Reform encourages the transition to the use of tickets for the period that gives wide discounts, instead of individual trips. Benefits are given to subscribers and not to public transport users in general. The benefits will be gradually feeling, and more passengers are relied on periodic socialist points.”

It was published by Globes, Israel Business News – En.globes.co.il – on July 2, 2025.

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