Well -- if they have to raise their rates due to gas prices a 30% increase in cost of gas shouldn't translate to a 30% increase in rates due to other expenses such as maintenence, web-hosting, XM radio service and other administrative stuff most-likely staying the same. If gas is 10% of their total costs a 30% increase in gas prices would require a mere 3% increase in rates to compensate -- assuming the number of people using this service stays the same.
More people using the service could actually push the 'increase in rates to compensate' level negative (hence they could conceivably lower their rates) because things like web hosting, administrative costs, and probably XM radio service are already in place and wouldn't cost much more even with a moderate increase in ridership.
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Date: 2005-07-12 12:13 am (UTC)More people using the service could actually push the 'increase in rates to compensate' level negative (hence they could conceivably lower their rates) because things like web hosting, administrative costs, and probably XM radio service are already in place and wouldn't cost much more even with a moderate increase in ridership.