Earlier this summer when the Utah Department of Transportation (UTDOT) officially recommended a gondola to fix the traffic in Little Cottonwood Canyon they left out one vital piece of information: what it would cost to ride the gondola.
The answer to this question is up for speculation and involves a lot of moving parts. However, applying some known facts and economic concepts can help get an estimate.
What we know
Along with the gondola, UDOT has proposed to install tolls on cars in Little Cottonwood Canyon. These are estimated to be $25-$30 per car. This is the first clue as to what it could cost to ride the gondola.
Another important piece of information is the cost of the project. The estimated cost of the gondola is $550 million plus another $7 million a year in operating and maintenance costs. It is important to note that these estimates were made before the significant price increases that have happened in the past year.
Additionally, a treasurer for the town of Alta has been using UDOT’s figures to calculate the cost per rider. Based on expected ridership, the expected cost per rider will be about $90 on the low end. However, if ridership is lower and the construction and operating costs are higher than expected, then it could cost up to $200 per rider. This would be what it would cost to essentially break even or have fares cover all the costs.
Public transit is highly subsidized
The reality is nearly all public transit costs more to operate than is collected in fares. In 2019, the Utah Transit Authority (UTA) collected 16% of its costs from fares. The rest is paid by taxpayers.
Applying that same math, assuming the actual cost per rider is on the lower end of projections at $100, then the fare might be around $16. This would intuitively make sense and would fall in line with the cost of the car tolls of $25-$30 because two or more people could share that cost.
Another factor that could drive consumer behavior is road conditions. All else being equal, if the roads are good with little traffic, then taking your car is faster. If the roads are bad or closed due to avalanche danger, it would push more people to the gondola. This could bring up the topic of dynamically pricing the cost to ride the gondola, where the cost would increase on busy weekends and powder days.
The price to ride the gondola will have to be attractive enough to lure users to it when considering all other options. This includes driving themselves or taking a bus. Based on what we know already, my best guess is that the cost to ride the gondola will be around $15-$20 per person. This of course could change considerably as new information becomes available.
Whatever the price ends up being, it is sure to be just as controversial as the gondola itself. Nobody likes to pay more than they have to and Utah skiers have mostly enjoyed getting to the mountains with just the cost of gas. Now it looks like no matter what method of transportation they choose there will be an additional cost.