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Ask HN: How would you make public transit profitable / create more value?
36 points by JayNeely 2824 days ago | hide | past | web | 104 comments | favorite
Reading the discussion on http://news.ycombinator.com/item?id=1069703 got me thinking about the fiscal crisis I keep seeing transportation authorities having. Both the MBTA (Massachusetts Bay) and MTA (NY Metro) systems, in my area of the world, have staggering debt and frequent problems, and I've heard about similar problems elsewhere.

From what I can tell, their main sources of revenue are vehicle / station advertising, fares, and in-station rents for business venues.

How would you improve or add to these revenues?

Update: There's a lot of (possibly justified) cynicism in some of the responses received so far. Maybe a better way of looking at this is:

How would you have public transit create more value?




Separate the functions of providing mass transit service and providing mobility for those who can't afford it on their own. There is no need to subsidize mass transit beyond the value of the congestion, pollution, and any other externalities it reduces. Cincinnati does this to an extent through Everybody Rides Metro[1]. A similar concept is facing a lot more resistance in Austin[2].

Another necessary policy shift is ceasing to discourage transit-supportive density. Most American cities have wide swathes of land zoned for single-family housing. If everyone is forced to spread out by their government, it will be harder to provide high quality mass transit. This is even worse when you have neighborhoods full of culs-de-sac, which I think should be outlawed, or at the very least they shouldn't be maintained with public funds as they are effectively private driveways that make the street network function more poorly.

Cities also often tax density by requiring large developments to provide a certain amount of funds for affordable housing. Dense developments make housing more affordable in the areas where people want to live by supplying more of it without a commensurate effect on demand. Single-family housing rarely has the same requirements. We shouldn't be taxing the things that make our transit systems work better and provide more affordable housing than the alternatives. Most zoning should be abolished.

[1] http://www.everybodyridesmetro.org/

[2] http://www.austinchronicle.com/gyrobase/Issue/story?oid=oid:...


Public transportation is a choice for some. Whether economic-driven or lifestyle. My point is its optional - you can't force people to take public transit.

Public transportation is necessary because not everyone can afford a private car or wants to drive a car (not everyone can bike - and biking in inclement weather is not a good experience).

Public transportation works poorly outside of urban centers because of grid density problems (in the suburbs, you can't cut through someone's yard to get to a bus stop - whereas in the city, regular blocks make it more direct to get to bus stops).

However, public transportation has to support the suburbs because a lot of lower-paid workers rely on it to get to their jobs in the suburbs. On many suburban bus routes, you will probably find it a maddening experience - as it is designed to go in loop-around fashion through office parks.

In other forums, its been argued that private auto industry gets a huge indirect subsidy from the government by the government supporting almost the majority of infrastructure road costs, wars to keep oil producers in check. The private auto industry has huge lobbying powers (see how much highway construction dollars came out of the last stimulus bill). It's also been argued that the true purpose of public transit is to give jobs to people.


Public transport can create value by running all night. That way, more young people move to the city and bring money with them and create wealth while they are there.


As a relatively young person living in a city, I'd appreciate public transportation being available all night. I don't think the ridership would be high enough for it to be profitable, though. You'd also have to deal with the problem of it becoming a de facto homeless shelter.


Instead of selling tickets and passes directly, sell bonds that pay interest in tickets / passes: you pay $1000, you get ten rides per month. These bonds would be transferable. That way, it's restricted to people who can put together, say, $1000 in cash. It wouldn't be hard to borrow that much, if you didn't have it on hand, unless you were a total failure.

Tourists would just put up the money as a deposit, and get it back at the end of their trip.


I can think of several times here in SF where I took a taxi instead of a bus because I didn't have cash on me. Now with the new RFID translink cards, it's much less hassle and I ride the bus a lot more.


Much of mass transit (airplanes, tour buses, Greyhound, ocean cruise lines, etc.) are profitable.

There are things that people are not willing to pay for, and government types have labelled these things "market failures", which, BTW, is a misuse of the term.

Government has then stepped in and run programs that people are not willing to pay for.

So the question really boils down to "how would you make something that noone has ever figured out how to make profitable...profitable?"

It's a bit like recycling: there have been metal recyclers for centuries. People do not recycle glass and paper because it is a value DESTROYING activity.... and thus government got involved, and requires people to separate their trash streams...before recombining about 75% of the "recycled" materials and putting them in landfills.

The only good answer to this question is "mu".


Way wrong. Airlines are, by and large, not profitable at all, even counting in the various forms of subsidies they receive. By some estimates airlines as a whole have lost money since their inception. Even by the most optimistic estimates the industry has done poorly. I'd rather give my retirement funds to M.C. Hammer to manage than put it in airline stock.

Greyhound's last two decades have been very rocky, and they've been forced to stop service to many places in the last decade. Cruise lines hardly count as mass transit. They're just slowly-moving casinos. Nobody ever thinks "I need to get from Point A to Point B. Should I take a plane, or a Carnival cruise?"

Privately-owned transportation companies might actually be doing much worse than government-owned ones, at least in the USA, in the last decade. I'd love to see the actual numbers there.


Airplanes are profitable thanks to government subsidies/services (TSA/FAA, rural airports, etc). Same for tour buses (they didn't pay for the road!).


Have you heard the term "externality"?


Yes.

Mass transit is subsidized, in most cases, FAR beyond whatever the externalities cost.

In Boston, 75% of the cost of each fair is payed for by other taxpayers. I dated a woman getting her PhD at MIT in transportation studies for a few years and asked her "are there any studies showing that the negative externalities that are dealt with here cost anything like the MBTA subsidy?"

The answer is no - even if you count externalities, most public transit is a huge exercise in value destruction.


Does anyone know the approximate percentage spent on actual operations vs. management and build-out of the system?

I lived in Boston for a summer in 2006, and I got to witness the transition from decades-old transit tokens to paper cards.

It was a giant cluster: Horrid machine usability, non-reusable transit cards, and untrained station personnel. It made me wonder what sort of premium the MBTA paid for that "upgrade" and how much rider confidence was lost.


The MBTA's a case study in incompetence, due to years of turf battles between the lege and governor's office. It's run by a bunch of overlapping boards with an org chart that looks like a spider web.

So anyways, they're about 30 billion in the hole over the next 10 years for what it will cost to do routine maintenance on the system going forward, mostly because it was all neglected for 20 years during the big dig fiasco.

I continually wonder why we can't build these things in this country anymore.. in the 20th century, a whole bunch of cities went from 0 to a complete transit infrastructure. These days, adding a single line or extension is a multi-decade fiasco (green line extension in Somerville, or the second east side line in manhattan).


> The MBTA's a case study in incompetence, due to years of turf battles between the lege and governor's office. It's run by a bunch of overlapping boards with an org chart that looks like a spider web.

Why is it that the MBTA, BART, the Phoenix light rail, etc. always have these problems (unrealistic projections, turf battles, overlapping spheres of control, etc.), and yet Greyhound, Southwest Airlines, etc., don't?

I'd suggest that this sort of problem is endemic to government run transit organizations, and doesn't crop up in the private sector because there's competition, and private firms can only get as many dollars of budget as the paying public is willing to give them.

Horrific incompetence results in extinction ... in the private sector.


You know, when I'm talking to engineers, if they say "relational databases are always good" or "relational databases are always bad", I conclude that they're either inexperienced or stupid.

The same oughta be true when evaluating different methods of solving other problems as well. Busses can be run by private companies as long as the government provides the roads, because you don't need government involvement to drive on a road.

Building a road, or a train track, requires some amount of government involvement, especially in dense areas with small lot sizes. Unless we're gonna knock down half the skyskrapers for 30 story parking garages in our major cities, we need to find a way to make mass transit work.

There's 2 approaches towards that -- try to help the right people get into government, or throw your hands up, bury your head in the sand and declare that "databases are never the right solution".


The relevant question is not really whether mass transit is subsidized, it's whether it's more subsidized than competing transit options. Given that streets are a massive taxpayer funded subsidy to drivers (most of that cost is NOT paid by vehicle-specific taxes), it's not clear to me that the subsidies to mass transit are larger. Anyone have such numbers?


You're making a subjective judgment and stating it as a fact.

Most cities wouldn't be able to function if you hard to park a car for every workday commuter. Especially Boston, I used to live there, you telling me there's room between the South End and Beacon Hill for all the people that work there? Maybe if you paved the commons and turned it into a 5-level garage. Sounds lovely. And that's not even getting into what it costs to pay welfare and housing for all the people who would no longer be able to hold a job without a way to get there (not as big a deal in Boston since the subway barely goes to Dot and Roxbury as it is - they're on the bus anyways).


The Boston Commons already has 1300 parking spaces under it. I don't know how many levels. See http://www.mccahome.com/bcg.html.


Get rid of the unions and lower revenue/fares at the same time.


You know, I try to give unions the benefit of the doubt. I think they still serve a function and I am not ideologically opposed to them. But then we come across incidents like this:

http://www.thestar.com/news/gta/ttc/article/754297--is-he-sl...

Toronto's transit system is amongst a select few in North America where middle- and upper-middle class folks make up a significant chunk of the ridership. Other cities dream of trying to convince folks to give up their daily commute by car. We've achieved this for a good number of people. It also happens to receives the least government funding in all of North America. But the union is really holding our system back.

For crying out loud, it is 2010 and we still have manned booths whose sole purpose is to convert one kind of coin into another. We also have -- I kid you not -- workers that wait on the side of the road with crow bars to switch streetcar track paths during rush hour. Also, I'm embarrassed for anyone visiting our city to ever think of going to the washroom at a subway station. They're absolutely vile.


What can you say on how Toronto's succeeded in getting more people to give up on commuting by car?


The reasons I commute by transit in Toronto (despite the very accurate drawbacks mentioned above - bring in smart-cards already!) are because it is faster and less expensive. Arguably Montreal's system is better on both counts. The people on the transit system here are the same people you see everywhere in the city.

One note: Toronto never ripped out its streetcar lines. I have always wondered why Toronto's streetcars were spared while most other cities in North America lost theirs.


I lived in Toronto for a while, and was a subway commuter:

- Built really early. There are a lot of cities that are just getting into the mass transit game, Toronto has been in it for 50 years, and this has allowed time for the culture to adjust, and for large housing complexes and shopping centres to develop around subway stations.

- Expansive, a lot of American cities start with small mass transit systems that don't run very far away from downtown. Toronto's advantage is that the two extreme ends of the subway line are very, very far from the downtown core, so subway commuting is a realistic option for people looking to live in cheaper neighbourhoods.

- Not reserved for poor neighbourhoods. In fact, the poorest areas of Toronto are entirely unserved by the subway system - the subway covers large swathes of lower middle class, middle, and upper-middle, and even upper-class neighbourhoods. This forced demographic has made the system in general much more welcoming as an option for people who would otherwise have the freedom to buy cars.

- Extreme density downtown. Once you leave downtown the distance between stations grows very dramatically, but in downtown there really is a station every 2-3 blocks, and you are never more than 5 minutes away from the subway. This type of convenience has encouraged an incredibly dense downtown (for Canada/USA anyhow) that is a destination.

- Discouragement of "multiple downtown" model. Here on the west coast we tend to develop smaller downtowns in multiple municipalities that are close together. Linking these by mass transit is difficult, and spreads your population thin. Toronto has a unique model in that the suburbs don't have as much of a "downtown", and all the hubbub and activity feeds into a very "mega-city" like downtown core by the lakeshore.


Our transit system is very user-friendly because we have: - small headways – during rush-hour, there's a train every 180 seconds - good street network – widespread bus and streetcar network that are good for point to point, and also for feeding the subway network - one fare, doesn't matter how far you go or how many modes you use (subway, streetcar, bus)


I pretty much concur with potatolicious' assessment. I'd just like to add that it took some visionary thinking to get to where we are today. The city anticipated during WWII, that cars would be the preferred mode of transportation for many more people when the war ended. Instead of building just freeways, the city transit commission went to work planning public transit around rail. At first streetcars were to be used and would just run underground, but eventually the idea morphed into a fully fledged subway system.

That's not the only example of forward-thinking. There is a huge urban valley in Toronto called the Don Valley. In 1918, Toronto decided to build a bridge connecting roads on both sides of the valley and the designer figured "hey, why not build a lower deck capable of holding two lanes of rail traffic....just in case?" About half a century later, when the subway was being extended, they just ran the line through this bridge. In today's fiscal and political climate, a similar decision would never be made. In fact, I'm positive that 50 years from now, future Torontonians will look back at us with frustration at our shortsightedness. Funny thing about that bridge... it can hold 5 lanes of car traffic with sidewalks for pedestrians to boot. The designer successfully designed a bridge to last more than 100 years. It's an incredible accomplishment.

I just want to elaborate on my first post. Toronto's transit system's problems aren't all due to the union of course. They bare the brunt of criticism these days, but the truth of the matter is financial and political backing of the system at provincial and federal levels pretty much stopped happening at the beginning of the 1990s. The federal Liberal government was voted into power in the early 1990s at a time when Canada was dealing with its own financial crisis, not too dissimilar to what the U.S. is facing now. We had all these social programs financed on deficit spending. The Liberals slashed spending on a lot of programs, and Toronto's transit system was one of them. A few years after the Liberals got into power, the Progressive Conservatives were voted in at a provincial level and they also slashed spending. They "downloaded" some social programs onto cities which affected municipal budgets drastically. So basically, the Toronto Transit Commission (TTC) has been cash strapped for the better part of 20 years now.

Things are so petty here that when our Prime Minister announced stimulus funding last year, he flat out rejected Toronto's request of money to build out the TTC infrastructure because it "didn't meet the criteria" (details here: http://www.blogto.com/city/2009/07/a_look_back_at_torontos_s...). Days after the rejection, our PM decided to fund a $790M mass transit system for a small university town an hour away from Toronto (one which he hopes to win votes in and probably will).

In any event, transit riders in Toronto are the ones getting screwed. It costs $3 for a one-way cash fare. The system is overcrowded. The infrastructure is getting old, although the TTC does a good job of keeping old workhorses running. You know those old GM "fishbowl" buses originally designed in 1959? We still have some of these clunkers operating on routes today (http://en.wikipedia.org/wiki/File:TTC_T6H_5307N_Bus_2284.jpg).

On my more cynical days, I'm of the opinion that Toronto eventually needs to threaten to secede from Ontario (http://en.wikipedia.org/wiki/Province_of_Toronto) in order to ensure we get our proper share of the tax money so that we can spend it on things that matter to us like mass transit. The provincial and federal governments love to take our money and then not give much of it back when we truly need it.


I'd agree with the first, but why the second?

As I mentioned in another thread, nothing I've seen suggests that fares are a barrier to use of the bus or subway. With the MBTA, subway rides are $2, bus rides are $1.50, and a week-long pass for unlimited use of both is $15. Even New York's $89/month for unlimited use of subway and local bus is many times more cost-effective than cab fare or car insurance.


4 week long passes cost $29 less than month long pass?


The former was Boston, the latter is NYC. NYC's 7-day card is $27


Ah, thanks


$89/month is in New York. $15/week is in Boston.


It's a complicated issue, so here's a little background (I have a Masters in Urban Planning so I've read a lot).

Streetcar lines (and subways in some places) were profitable businesses, just like railroad lines. But there were a few features that we don't have today.

First, it was a new mobility technology so it opened up land that was too far away to be developed. There is no such land now in metro areas because highways and have cars make all areas equally accessible.

Second, they were a real estate play as much as a transportation play. Because they opened up new land, the lines tended to go to greenfields where the streetcar companies and their allies owned or could buy land. Take a look at the Brown line in Chicago and watch how it winds - that was a land acquisition issue. This wouldn't work now because a rail line doesn't increase the value of land enough since so much is accessible by car.

Third, people rode trains a lot more then than people ride them even now. These trains were extensions off of a very dense, centralized city. Technology and social changes reduced the number of daily rides. For instance, refrigerators meant that women didn't have to ride into the market every day. Worker benefits (like the 6 or 5 day work week) meant that workers didn't ride as often. As shopping and employment decentralized, people didn't have to ride to the city as often. And when people got cars, they had an alternative to the train.

So what can we learn from history and contemporary transit to make transit more valuable today?

First, there must be attractions at both end so the fixed costs in tracks and cars can make money both ways. Early streetcar lines often has amusement parks at the terminus to promote two-way travel. The Las Vegas monorail is a decent modern version of this - there's something at every stop. Transit lines that end in the suburbs at a big parking lot will be underutilized by definition.

Second, land use matters. All of the streetcars and subways were built before zoning and so the market built what the market could bear by transit, and buildings could be razed and built bigger if demand grew. Housing in transit-rich cities and near light rail in cities with new transit systems if more expensive because zoning restricts how much can be built. In addition to maximum height, massing, and lot utilization, there are also minimum parking limits that mean every house/condo is much more expensive and not affordable to people that would use transit the most. Take a look at the area around the transit stops in Arlington, VA for an example of transit zoning done right - extremely dense development within 1/2 mile of transit stops. It has the lowest car ownership and usage in Northern VA and generates 50% of the county's property tax in 5% of its land area.

Third is that quality of service matters. Busses in the US suck and are slow because fare collection takes place one at a time while the bus is stopped. Curitiba, Brazil (look it up, it's the world leader in bus transit) has bus stops where you pay to enter and everyone boards at once. The city has one of the highest rates of car ownership in Brazil and the highest transit utilization in Brazil. On their main bus routes they have 1-3 minute headways so there's no such thing as looking at a schedule. Other things like priority lanes for buses at stoplights, tech to let the bus hold a green light to make it through, etc help. Bogota Columbia is the other leading bus tech center and both cities do something like 50x the miles of service per dollar as a subway would have cost to build and operate.

Fourth, if there's lots of free parking at the destination it's almost always easier to drive. Point to point means the trip is faster and free parking means it costs less. Places in the states that have the highest transit usage (Boston, New York, Chicago Loop, SF) are places where parking sucks or is expensive. Even LA traffic doesn't keep people from driving because a) the buses are stuck in it too, and b) it's free to park when you get there.

Basically, any city that's building a light rail or subway line and not dramatically increasing the zoning around it is throwing money away. For instance, the 2nd Ave subway in NYC probably won't change much for the $5 billion because there's no way to dramatically increase the number of people that live in the Upper East Side or Harlem. Without the proper land use, there's not enough population to drive demand, without demand there's not enough incentive to provide good levels of service, and without good levels of service people will find it faster to drive.


do you have any thoughts on how/why the japanese rail system is as successful as it is? it doesn't seem like any of that quite fits into the description of their system except quality of service.


I don't know many specifics about Japan but here goes. Japans interurban trains are both heavily subsidized and expensive - they're more comparable to air travel than any trains in America.

As for their subways, I'd guess it's because of density and parking. The special wards of Tokyo (http://en.wikipedia.org/wiki/Special_wards_of_Tokyo) are roughly equivalent to NYC - 8.8 million people, historic core, not including the suburbs or greater metro area. The only difference is it's in half the land area. So the whole special wards is twice as dense as NYC as a whole or about the same density as Brooklyn.

Looking at the largest cities in the USA (http://en.wikipedia.org/wiki/List_of_United_States_cities_by...) vs largest cities in Japan (http://en.wikipedia.org/wiki/Largest_cities_in_Japan) #1-4 are a perfect match and 1-10 are all pretty close in size, but I'm pretty sure Nagoya and Sapporo are much more dense than Houston and Phoenix. So Japan also has more cities where subways can work.


There are also a lot of new ways to make money now.

10$ a month for a high-speed WiFi access on all trains and busses would be a no brainer for many people.

While it would cost more (and annoy people who want free access) you could also do the same thing with power outlets.


Do you know how the total amount of subsidies to mass transit compares to the subsidies to drivers by supplying a completely tax-funded street network?


The amtrak yearly subsidy is in the neighborhood of 1.3B a year (http://www.heritage.org/Research/Budget/bg2072es.cfm) while congress generally passes highway bills which number in the 100s of billions every other year or so.

Incomplete story as it's totally ignoring state/local roads and city-level metros -- but that's one data point for you.


I've always wondered how that would shake out. My guess is that roads are subsidized more per trip but less per mile than transit, because road networks are huge and trips are long but drivers pay for the vehicle and labor. I have no doubt that car trips cost more because drivers pay for their own vehicles but the economic advantages of point to point travel are tremendous and generally worth it in a society that's wealthy enough to afford cars and doesn't have parking congestion problems.


Just pointing out that parking is often a hidden subsidy to drivers.


Fuel taxes are a huge moneymaker for the states; with far more being taken in taxes than is spent on roads. Whether that money makes its way to cities, or exactly how it is split up, is no doubt a very complex question.


Citation? My recollection is the opposite. Most state and federal highways here in Texas require local matching funds on top of any gas tax money.

"No road that we built in Texas paid for itself." - http://www.austincontrarian.com/austincontrarian/2009/11/aga...


Stop and think about the statement/article you quoted.

Figure a 10 mile stretch of road is built.

A suburban householder drives the length of it when commuting in a 30 mpg (most cars get less mpg) car, 200 times a year at a minimum (this doesn't even include trips to grocery store, spouse's car, etc.).

Yearly, 2000 miles traveled, about 70 gallons of fuel used by the 30mpg car, means $14.00 in fuel taxes (TX gets 20 cents/gallon in taxes), or, $1.40 per mile; each year. Definitely a far cry from the "2-3 cents" quoted in the article.

Is my math off?


Your units are off. You're calculating dollars per mile per year. The article talks about dollars per mile, which could be an imprecise way of talking about dollars per mile per year, but taking the words at face value gives about 1 cent per mile at 20 mpg, the Department of Transportation's average fuel economy as of 2005. If you include the federal 18.4 cent tax, you get 1.92 cents per mile.


I think both our units are off.

If the units represent 20-30 cents per car per mile traveled, then my question is, what manner of gold and silver is used in constructing Texas roads?


Let's work with an actual example, the expansion of Interstate 10 in Katy, TX.

http://www.chron.com/disp/story.mpl/metropolitan/5450155.htm...

Estimated cost: $2.8 billion

Traffic: 207,000 per day (http://www.katyfreeway.org/background.html)

Length: 22 miles

Cost per mile per daily trip: $614.84

If we're paying it off over 20 years, that's 8.4 cents per mile driven. This doesn't include any necessary maintenance over those 20 years. I doubt the 20-30 cents figure is wrong. The person who was quoted was an elected official who dealt with a lot of transportation issues.


That's also close to a best case example, the average road in the US is far less traveled.


2nd ave subway is a response to pop growth in the Bronx. If I remember my numbers correctly, the green line carries 1/3 of the daily subway users.

When I rode the red lines, I worried about getting a seat. When I rode the green lines from the express stop at 86 and lex, I worried about getting on the train.

Also, I think you forgot to mention the enormous subsidies to car ownership, from free parking to general tax money used for roads to wars to secure oil supplies. Thus the marginal cost of driving is far under the average cost. While public transit is subsidized, it isn't subsidized anywhere near as much.


In response to your updated question, I think the best way would be to change the experience of people who ride.

- Install TVs with captions and an FM channel so I can listen to the news on my 30 minute commute.

- Take out chairs from a few of the cars and make them standing room only so that during rush out you aren't crammed in like sardines.

- Make the first and last cars dark so that in early morning and your way back from work you can sleep if you'd like.

- Add WiFi so I can work my entire trip in, just came to mind.

These are things I'd love to see on the metro cause right now I feel like I lose 30 minutes a day just sitting there and reading.


I would LOVE SRO cars. The CTA in Chicago ran some trials last summer, but the populace was too lazy and bitched enough that they ended the trials early and no SRO cars exist any more.


I agree with all these things. I would even charge a small nominal fee for monthly usage of the wifi. Have advertising come on the FM Radio.


Make it really easy to get to the airport.

Pro: Airport parking is an expensive hassle, thus people are always taking cabs or asking for rides. Airports are far from city centers, and often inconvenient to get to.

However, it's probably not enough traffic to sustain an entire system, but I think it makes for a good first step in a new system.

The other thing is that we either need to:

1) Stop subsidizing air & road travel so much

2) Subsidize public transit in order to make it more competitive with road / air travel

#1 is politically infeasible ... but perhaps #2 is as well. Maybe public transit support could be billed as a way to get everyone else off the road?


> 1) Stop subsidizing air & road travel so much

Huh, I get that road travel is subsidized, but never heard about air. Do you know how that shakes out? Federal government or localities building airports, or providing some sort of free coordinating services, or some such? I had always just kinda assumed that airlines were renting or leasing airport space and covering most of the costs from it, but that was just me idly guessing.


I'm not super-educated here (learned from a friend of mine), but here are some links:

http://en.wikipedia.org/wiki/Essential_Air_Service (about $74/passenger subsidy for small airports in rural areas.

http://www.dot.gov/bib2009/htm/FAA.html -- the FAA 2009 budget, includes:

$9.7 billion for Air traffic organization $2.1 billion for Safety & Operations $2.8 billion for Airport grants


Michael O'Hare (Berkeley Prof) has an article about why public transit really wants to be subsidized:

http://www.samefacts.com/2007/05/energy-and-environment/more...

The short version is that the marginal cost for an additional rider is basically zero.


MTA could add value to NYC subway by:

* Adding a compass/direction indicator directly out of the subway exit. Frequently, I get out of the subway and my sense of direction is off and street signs aren't much help.

* Make them safer to ride late at night.

* Get rid of the bible pushers yelling at everyone in the path between Port Authority and Times Square subway


When I was travelling in Europe, I glanced at a small compass while exiting the subway so I could head in the right direction and look like I knew where I was going, even though I'd never been a certain place before.


Reduce the fares to nothing. Utility of a system rises dramatically as the frequency of bus/train arrivals drops below about eight minutes so people can just show up without checking the schedule.

Tax money goes to build roads and other car related infrastructure. Car travel is obviously subsidized since you generally do not pay to drive on a given road at the time you drive.

It would not be unreasonable to subsidize buses or other public transportation in a similar way.

Obviously, free internet should be provided on all buses and trains, as well as increased bicycle carrying capacity.

Also, if the ticket price was reduced to zero for buses, ridership would increase and costs per rider would be reduced. Greater bus ridership would reduce the money municipalities would need to spend for road expansion.


In Medellin, Colombia. The subway is connected to two systems of Sky carts (similar to ones used on ski resorts). That allows the "subway system" to reach hard terrain (mountains) and expensive terrain (need only to set large polls and stations).

For residential areas with high land prices, this might seem as an excellent and cheap to implement public transport. (These are the same areas where cars are usually sitting in traffic jams).

Does anyone have information if this model is working out for them ? Is it used somewhere else successfully ?


Maybe I can give a UK perspective on how this is possible. I'm not sure whether we can say that rail travel is profitable here, it still receives substantial government subsidy each year, but it is successful in that last year saw a record number of rail journeys taken.

I'm not sure what the parking situation is like in the US but here if you work in a major city car parking will cost you at least $100-150 per month, London is much more expensive. A lot of our suburban railway stations allow free or discount parking so even if you can't make your entire journey by train you can park and travel into the city by rail.

When it comes to longer journeys the tickets are sold on a reverse pricing basis, if you buy in advance the first 10-20% of tickets for a train are sold at the cheapest rate, sometimes a 200 mile journey costs as little as $20. If you buy a ticket on the day and during a peak period you'll pay a lot more. This structure however seems to result in more of the trains being full more of the time as pricing reflects the demand.

Also faster trains all fitted with wifi make longer journeys much more simple. I often travel into London and buy an advance ticket that costs around £25 ($35 ish)the train at 125mph takes half the journey time of the car and you avoid parking charges and the london congestion charge. I also get to work the entire journey for a similar cost to the fuel alone. It really is a complete no-brainer, you'd have to be stupid to want to drive.

That is I suppose a long reason for a simple answer. When it becomes more attractive to travel by rail people will leave their cars at home.


There is no general solution, of course. Every city is different, and cities in the USA are very different from the cities in Europe, and so on.

I'd like for the public transit to be seen more as a public service than just another private business. After all, transportation is a vital part of the city, and something that the local authorities simply have to manage somehow. It also affects every other aspect of the city life.

I believe that the actual question should be much more like "how would you like to your city look like?"

To offer some "solution". I'd try to abolish the fares. I'd try to reduce maximum velocities for the cars, make more one-way lanes, narrow some other lanes, and so on. I'd try to bring new development into the brownfields inside the city (every city has them). But, there is no general Solution for everything. After all, it's not a fight between public transit and individual cars, but aim should be to provide the best service for the lowest price (to bring that viewpoint here too).

And after all, things will simply change with the time :-) I expect, one day, that all those disgusting highways around and inside the cities will turn into parks or something similar, as the old city walls from the middle-ages did. :-)


The future of public transit once prominently featured a monorail, but that glamorous view of the future soon lost out to the utility of a car. Current public transportation simply cannot compete with that level of convenience. What should follow from that is a plan to make public transportation more convenient.

Follow the adage of giving people what they want - make the subway more convenient by automating the system. Follow that up with MUCH smaller subway cars. I'm imagining subway cars that are the size of a compact car. I go to the subway station, get in a subway car, and tell it my destination, and it takes me there in the most efficient way and not stopping at stops in between.

Of course, the cost just to renovate all subway stations to have 4 lines so that some cars can wait at the station while others zip past would be unimaginable, and I can't imagine citizens of any municipality voting to fund this.

That is, however, my view of how public transportation would create more value.


This brings back memories of a similar discussion in a finance class a few years ago.

Someone suggested increasing the cost of using private automobiles (via higher tolls on bridges and tunnels, etc.), and making the subways and buses free (both to encourage ridership and to reduce the overhead required for collecting fares).

The professor responded that the first idea was good, since it would motivate changes in behavior, but it would have to be a lot, i.e., triple or more the current tolls, to really have an effect.

He thought the second idea made less sense b/c mass transit is an inelastic service to the population that currently uses it (i.e., people who ride the subway have no choice but to keep using it), and also since the cost of collecting fares is small relative to the overall income.


Additional property taxes on land near the stations would be a good source of revenue. It's likely that the adjoing land commands higher rents due to proximity to transit, and it's rational that some of this extra revenue goes towards maintaining the transit that is its source.


This may be counterproductive - now you're penalizing people for using the transit system. A lot of municipal transit systems are unprofitable because of low usage (but high service level commitments) - penalizing people for riding transit wouldn't solve this at all.


No, that would only provide an incentive for people to live and work in places that are far from public transportation.


As a Boston resident, I would absolutely not live more than a 5-10 minute walk from the T. A levy might make sense!

On the flipside, I can tell you from experience that it is very much priced into home prices and rents already. So the property tax impact is already partially present.


Interesting. Here in Portland (Oregon), we actually have the reverse policy: property tax exemptions for housing units within some arbitrary distance of a light-rail line. [Link: http://www.pdc.us/housing_services/programs/financial/transi... ]

Of course, that policy is probably aimed at encouraging higher density, not at improving our transit agency's bottom line... but it does also create a natural customer base for the light rail system.


A better way to do this is tax increment financing. The taxes on nearby properties will go up regardless because the value of the properties will increase. They shouldn't be charged a higher rate, but a portion of the increase in tax revenue should be put back into supporting transit.

http://en.wikipedia.org/wiki/Tax_increment_financing


Deregulate parking.

Right now nearly all municipalities have laws that require a certain minimum amount of parking per square foot of building floor area, with the amount varying by use.

This has three perverse effects:

1. Buildings cost more (surface parking requires extra land, underground parking is insanely expensive), so fewer people can afford to live close to employment centers, amenities, and transit stations. 2. It encourages the ownership and use of cars. If you've already paid for parking in the cost of real estate and the price of crap from the mall, you might as well use it. 3. Unless the parking is underground, everything is more spread out, so fewer trips are practical on foot or by bike.


Why make them profitable?


So people have a reason to make them, which will lead to improvement on the current systems.


Public transit is a natural monopoly. We don't really need five different and independent subway lines per city, the same way that I don't need five sewer system connections to my house.

As such, the notion of making public transit anything other than a break-even government funded service is misguided. I'd consider break-even however to be key.


I believe that tokyo has 3 competing subway companies, so I guess there is room for competition.


I'm not saying there isn't room, I'm just saying that with limited space and a captive target audience, having three competing subway lines is incredibly inefficient, especially when you consider that there will be 1-2 lines that all three will service, while other areas won't have any service, given traffic patterns.

I'm not sure how this is in the interests of any city really.


Of course it is, it's quite common for many companies to compete with offers, and the local authorities choose the best one. But that kind of competition is not aimed at the end user, passenger.


NYC has tried that - the system started out as 3 competing companies, but in the long run, it makes sense to have one system with one set of management/employees


I'm pretty sure every tax payer has a reason to improve them and lower costs.


Don't bother.

Instead, allow for car-based mass transit, by allowing far cheaper taxi cab medallions and issuing as many as people will pay for.

WHY is the cost of a taxi cab medallion in NYC $750K?

Instead sell them for say $1200/year renewable yearly. Allow pricing to fall or rise based on the market, provided they are within a range (e.g. no less than 50 cents and no more than $3 per unit of distance traveled).


There's no way it would be more cost-efficient for people to take even a $0.50 / mile cab trip in their daily transportation than it would a $15/week bus & subway pass.

The congestion would be unbelievable, both on the highway and particularly at well-used pickup and drop-off points.

See: http://farm4.static.flickr.com/3402/3342003343_0fa801cec5.jp...


Clever photo; however the whole idea of a cab is to serve multiple people over the course of a day; so it doesn't really apply.

What would make more sense would be to show say 3 taxis, each of which had 20 fares during a shift. Which would take up less space than the parked bikes and a little more than 1 bus.


If people keep all other aspects of their commute constant while switching from private cars to taxis, traffic will remain almost exactly the same. The same number of cars will be on the road at the same time. Parking lots will free up, but roads will stay packed.


A single bus would have hundreds of fares over the course of a day.


This has already been tried in many cities outside the US. It doesn't work, and instead leads to absolutely horrendous traffic jams because road space is a limited resource. Some examples: Cairo, Lagos, Mexico City.


Stop subsidizing low gas prices for automobiles.


[citation needed]

Did you mean increase gas taxes? When I look at the gas price breakdown where I am (Michigan, USA), I only see taxes, no subsidies. http://www.michigangasprices.com/tax_info.aspx

Europe has much larger taxes on gas, diesel, and automobiles than in the US, which discourages car use and ownership.


I consider the taxes I pay to fund the US military to be a gas subsidy. Without it we wouldn't have access to such cheap and plentiful oil.


I believe most countries that are the target of the US military see an immediate drop in petroleum production and our single largest source of oil imports is Canada.


You're probably right, but that's not what I was referring to. I was referring to the US Navy that patrols international waters to ensure smooth flows of oil tanks, and I was referring to the money that goes to protect the Saudi government and their oil fields, etc.

It doesn't really matter where we import our oil from. The world market is interconnected. If supplies drop in Venezuela, Norway, Saudi Arabia, Iraq and Iran, then the demand for oil from Canada will go up worldwide. So it's in our interest to keep the oil flowing from countries other than Canada.


I'm not sure why you were downvoted (comment currently at 0). If you look at countries where gas is the most expensive you see smaller, more fuel efficient cars, and more use of public transport.

Granted, this is also because many of the cities in those countries are old and weren't designed for vehicles, leading to congestion problems. These areas usually have high densities of people as well.


>"I'm not sure why you were downvoted (comment currently at 0). "

Probably because the US does not actually subsidize gasoline. So, the first comment is factually wrong.


I'm not so sure it is factually wrong. here is a reference.

http://www.progress.org/2003/energy22.htm


I take light rail from Mountain View to San Jose almost every day. My trip of about 18 miles takes 50 minutes. Fix that please.


On your last question

> How would you have public transit create more value?

I'd answer by subsidising it more. That way more people can afford to use it. Of course that will increase debts further which is the contrary to your original question. Revenue and value are not synonymous.


Nothing I've seen suggests that fares are a barrier to use of the bus or subway. With the MBTA, subway rides are $2, bus rides are $1.50, and a week-long pass for unlimited use of both is $15. Even New York's $89/month for unlimited use of subway and local bus is many times more cost-effective than cab fare or car insurance.

Subsidizing further to reduce fares doesn't seem like a net gain to me.


I only said it because I'd ride the bus twice a day (and use it for leisure, the kids love going on the bus) if it were cheaper.

n=1, yeah, yeah.


More Ads for one. I know in DC Metro (where I am) the ads are insanely small and you could definitely increase ad space on the subway and buses. Cram Ads down people in order to pay for the transit system.


I know in DC Metro (where I am) the ads are insanely small

Have we been riding the same metro? The DC metro has some pretty big ads in the stations.


That improves the advertising, not the transportation. Google just posted 2 billion dollars in profits, and I don't remember noticing increased ads or ad space in any of their properties.


Selling more ads would probably increase revenue for the metro systems. Making them bigger and selling them for more would help as well. Google doesn't apply here because they can't use this technique for fear of backlash.

I can't imagine anyone complaining about more/bigger ads on buses, especially if it helps reduce subsidies and spending.


Increase population density. Admitedly, this is not a quick fix.


It's a quicker fix than you'd think in the central areas of most American cities. In Austin, the neighborhood next to the University of Texas (enrollment: ~50,000) was drastically underzoned for decades. Within five years of its rezoning, the neighborhood changed drastically. I'd estimate that the neighborhood has about doubled in density in half a decade, and there's still plenty of land that will be redeveloped in the next decade.

Most suburbs will never be easy to serve with high quality transit, but most central cities could do it fairly quickly with the stroke of a pen.

http://www.austinchronicle.com/gyrobase/Issue/column?oid=oid...


Consolidate the routes and reduce the number of stops on routes. Attempt to compensate for this by increasing capacity where possible on reduced routes.


In cities where subways or other types of rail transit do not operate 24/7, use the cars (or different cars) to move packages in the off hours.


Privatize the road system. Completely private public transits will emerge to compete. It's really that simple.

People don't use public transit because they're already paying for the roads with their taxes. If they had to pay tolls reflecting the true cost of maintaining the roads they would choose public transit, and public transit accessible housing and workplaces.

Pre-50s toll roads were much more common and private street car lines were very common.


Totally agree. Privatizing public transportation would be the fastest way to both make it profitable and deliver more value to consumers.

There is a good research to back this up, but intuitively it makes sense also for the simple reason that you always spend your own money more carefully than you spend someone else's.

A government employee is just trying not to be noticed or fired. A private company is fiercely competing to save their own money and make more of it (the only way to do the latter is to deliver a product customers want). The selfish profit incentive is the greatest method we've ever found to motivate people and drive progress for everyone.




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